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Elgi Equipments


Elgi Equipments is in the business of manufacturing compressors (approx. 85% of revenues) and other auto equipments.

It supplies primarily to the infrastructure and construction segments.  It owns subsidiaries in China and France.  It plans to expand by increasing exports (currently 10% of revenues), introduction of new products and opening of new manufacturing facilities.

The company has reported consistent growth in revenues and operating profits over the last five years – reporting 130cr of operating profits on about 770cr of revenues in the last financial year.  It operated with a large net cash position.

It is primarily exposed to the interest rate cycle, which impacts infrastructure investments and auto purchases.  Further, it is vulnerable to government policies on infrastructure (or lack of it), which directly impacts demand for its products.  It is also subject to risks impacting the auto demand such as high fuel costs etc.

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