Elgi Equipments (ELGIEQUIP) Investor Day 25/26 summary

Strategic direction and growth targets

• Set a five-year target to reach $750 million in revenue by FY 2031, with an 18% EBITDA margin and 35% ROCE, building on an 11% CAGR and surpassing previous goals at constant exchange rates.

• Two-thirds of future growth is expected from international markets, with India/ROW split at 53/47 and ROW CAGR at 10%.

• Growth will be driven by market share gains, new product launches, expansion into new segments and geographies, and a rising share of aftermarket revenue, especially as the installed base grows globally.

• Aftermarket revenue is projected to increase from 20% to potentially 25% of total revenue, with higher margins compared to equipment sales.

• Inorganic growth is expected to be minimal, with a focus on organic expansion and selective product or customer access acquisitions.

Financial performance and operational efficiency

• Achieved FY25 revenue of INR 35,104 Mn with an estimated 11% growth to INR 38,800 Mn in FY26, driven by strong performance in North America and ISAAME regions.

• EBITDA margin maintained at 15% in FY25, targeting 16% for FY26, with margin expansion expected after another year or two.

• Working capital and cash conversion remain strong, with EBITDA to cash conversion above 90% and no significant increase in working capital despite top-line growth.

• Capex cycle underway, with INR 500-600 crore planned for a new campus over the next 4-5 years to improve operational efficiency and reduce costs.

• Net debt reduced significantly, with cash profit and disciplined capital allocation supporting financial health.

Product innovation and technology

• Launched Demand Match, a patented technology for fixed-speed compressors that improves energy efficiency and price realization, now standard in India and being rolled out globally by April 2026.

• Introduced super premium compressor series (75–250 kW) with best-in-class efficiency, and expanded product portfolio with high-efficiency two-stage compressors, PMSM range, dryers, and piping solutions.

• Focused R&D on disruptive technologies to differentiate from global competitors, with ongoing investments in product and technology development.

• Manufacturing self-sufficiency improved, with 88% of motors produced in-house, reduced lead times, improved quality, and further integration considered for strategic or safety-critical components.

• Accessories, lubricated screw compressors, and vacuum solutions are expected to be key growth drivers, with a new global service center for parts support to be completed by April 2026.