Elgi Equipments revenue up 31%

The company will make corrections in prices to recover fully the high raw material and freight costs, it said

Manufacturer of air compressors, Elgi Equipments, said it will take steps to keep costs under control as inflation, war, and political unrest in some geographies threaten to affect demand and margins.

The company said in a press release that its consolidated Profit After Tax for financial year 2021-2022 was ₹178.4 crore compared to ₹102.5 crore in 2020-2021 and consolidated sales were ₹2,525 crore as against ₹1,924 crore the previous year. Standalone PAT for the year was ₹189.4 crore compared to ₹105.1 crore in 2020-2021.

Jairam Varadaraj, Managing Director of Elgi, said the topline growth of 2021-2022 may not be sustainable in the current year as big countries have stopped stimulus spending and there is no definite picture on the high commodity prices.

“We need to wait and see. We should be optimistic but cautious. We are reviewing our processes and initiating action to avoid margin erosion,” he said.

The company will make corrections in prices to recover fully the high raw material and freight costs and a decision on this will be taken by the end of next month, it said.

The compressor business’ performance in the domestic market exceeded expectations as demand was strong. Barring West Asian countries, Africa, Australia and South-East Asian Countries that were affected by COVID lockdowns, other geographies too saw high demand last year.