- The Sales level the company has grown at about 4.5%, the compressor business has grown at 6+% across the world
- At the consolidated level, grown at about 4.5%. while EBITDA is Rs 323 Cr.
- The company has lost about 60-odd million in contribution margin at material cost level primarily because of mix variation compared to the first quarter of last year.
- The company did a minor voluntary retirement scheme wherein about 22 people were retied primarily at the blue-collar level.
- April was a bit of disastrous month for the company but the company had recovered fairly well in May and more so in June
- In the Second week of June, the company was hit with the effects of GST due to delayed payments resulting from confusion of postponement of payments.
International Market Scenario
- US had done well in terms of Medical business, in spite of the confusion of the Obamacare prevailing with the Trump administration.
- Brazil continues to be a part of a challenge but not due to the operations but owing to the Brazilian Economy.
- Africa has been marginally better than the last year, but Middle East continues to be a challenge
- Far East has performed well in terms of the company revenue contribution.
- Australia has done well and China has continued to sustain at the levels that has been earlier planned.
- Company is continuing to support and service our customers and parallel are working on a plan to come up with a new strategy for China but that is not going to be immediate.
- General economic revival in all the key markets in US. US has been doing well for the last almost two to three years.
- Europe after prolonged thing from 2008 are seem to be coming back
- Australia after a long pause is beginning to invest, so part of our growth in these markets has been contributed by the revival of the economies and therefore investment in capital goods.
Impact on Compressor Segment
- Dealer-based business has taken the biggest impact but there have been saviors like Railways.
- Compressors are 28% but there is some clause, which says partsin railways, is 5%
- In the month of April, we were significantly strung by our ERP issue and the recovery that compressor business made in May and June.
- ATS, the automotive equipment business could not do primarily because the concern of many of the customers in terms of GST
- Post GST what will be the savings that they could potentially have so that kind of dampened things a little bit and many of the passenger vehicle companies that were looking at expansion of the dealership did not go through with it. But June was good, July continues to be good for the company and the lost revenue is forecasted to be recovered.
Impact of GST
- On an average it is pretty neutral that could be a marginal point, 3.4% increase in ournet cost to the customer.
- Company has started extending the credit to our dealers and customers due to which the cost has come down.
- Now distributors are carrying inventory of the old parts where the MRP is higher where as now the MRP is lower. The net difference is about around 1%.
- In terms of input credit basically the only thing is that the company is receiving a net set off and had a 2% CST, which was our input cost earlier.
- Spare parts is at 18%.
Dealer Ecosystem and Online Connectivity
- The online system is still not in fully in place, but the system between the vendors and company is pretty stable.
- But many of the distributors especially the smaller ones have to go through this new thing of 18 credit and keeping accounts of, so it is also for the company to take credit of miscellaneous expenses.
Dividend from ELGi ATS in Q1
- First Q1 about Rs.5 Crores is the dividend received in Standalone.
- Growth in sales of ELGi branded compressors outside India
- ELGi branded compressor growth in our key markets has been high double digit
- The dealers cover all industrial segments, hence company does not keep track at this stage of the entry into various markets.
Broad BCG plan
- Designed and implemented the program, which is basically the go to market program, structured processes, evaluation, and review systems
- Running this program for a little less than a year and we have covered probably 60%, 70% of the market
- Small companies, small to medium size or even large companies that are looking at incremental investment
Domestic Indian Economy Plans
- Share in India is relatively large compared to markets outside. Unless there is a trigger in the economy in India company cannot predict the growth, whereas is in markets where the market share is almost nothing and company is beginning to have a strong presence