Q3FY23 concall
Europe and North America constitute 35-40% of the company’s top-line revenue, yet they have not significantly contributed to EBITDA-level profitability. Mr. Jairam is optimistic about these geographies showing improvement soon. In contrast, India has been experiencing double-digit growth, and despite a high volume of inquiries, the conversion rate from inquiries to sales remains modest. Given the widespread use of compressors across various industries, a surge in private capital expenditure could catalyze growth for the company.
Regarding R&D, the company realistically allocates 7-8% of its budget to this area, considering the scale of its global manpower and resources, although officially, the expenditure is recorded as 4-5%. All technologies are developed in-house, showcasing the company’s commitment to innovation and self-reliance.
In the Indian market, Elgi is facing increased competition in the lower segment of screw compressors, primarily due to Chinese imports. These imports have expanded their market share from 7-8% two years ago to 25-26% today. Elgi plans to address this challenge imminently with a strategic response that goes beyond just pricing. The company intends to enhance its distribution and marketing efforts to regain its competitive edge in this segment.
Disc: tracking
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