Elgi Equipments
- Elgi Equipments Limited is in the business of manufacturing and supplying Air Compressors
- & Automotive Equipments.
- 92% Revenue from Compressors rest from Auto Components
- Revenue Distribution across Geography :
India: 47%, US: 26%, Europe: 11%, Australia: 8%, Others: 8%
- Second largest player in the Indian air compressor market (22% market share) and is among the top 8 players globally.
- The company is one of the largest and low cost advantage. approximately priced 10-15% lower than competition.
- Increasing their footprint in the US through JV arrangements
- The market size of air compressor industry is 15 billion USD. The global market is expected to grow at 3% CAGR and the Indian Market is expected to grow at 7% CAGR in the next 5 years. This along with possibility of gaining market share overseas and entering new markets makes Elgi a very interesting player.
- The nature of air-compressor industry is that it is diversified revenue source without a dependence on any specific industry vertical. Two, the geographical opportunity reduces the risk of dependence on any one economy and its business cycle for Elgi.
- Aftermarket/ Recurring revenue – The biggest positive for the industry is the aftermarket revenue it generates. For every dollar of equipment sold, aftermarket generates 1.2 USD across the next 10 years in aftermarket sales. In addition to the same, the aftermarket parts gross margins are almost 2-3x of the original equipment. Recurring revenue is anywhere from 30-50 percent of total revenue.
