ELGi Eyes Global Top Three Position, Bets ₹500 Crore On Expansion

Anvar Jay Varadaraj, Director and Chief Operating Officer at ELGi Equipments, discusses the company’s ambition to become one of the world’s top three compressor brands by 2035. In talks with The Free Press Journal, he outlines ELGi’s Rs 500-crore manufacturing expansion, overseas growth, energy-efficient technologies, sectoral opportunities and strategy to strengthen its position across India and key rapidly evolving global markets.

What is ELGi’s market position in Maharashtra?

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India lacks an industry body that publishes consistent compressor sales and market-share data. However, we believe ELGi holds a little over 20 percent share of Maharashtra’s electric-powered screw compressor market. The position varies across Mumbai and Pune, leaving room for expansion.

What is the company’s larger ambition?

ELGi is the world’s sixth-largest compressor brand and a close second in India, behind Atlas Copco. Our goal is to rank among the world’s top three by 2035. That would require us to become India’s undisputed leader, with a sustained share exceeding 30 percent. Industrial investment and capacity expansion make this an attractive growth period.

Which industries generate the strongest demand?

Compressed air is like electricity because factories need it. Power, cement, textiles and pharmaceuticals are important sectors. Textiles have regional clusters across Maharashtra, Gujarat and southern India. Pharmaceutical plants require completely oil-free air, an area where ELGi is among the few companies manufacturing its own compressors. General engineering—including CNC machining and automotive components—is typically our largest customer category.

How did ELGi build its compressor business?

The group began as a bus company before Independence. Following nationalisation, my great-grandfather moved into automotive service equipment, including grease pumps, lifts and compressors. When India liberalised in the early 1990s, my father, Jairam Varadaraj, chose to exit several unrelated businesses and specialise in compressed air and automotive equipment.

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Compressors offered technological differentiation, global scalability, a diversified customer base and significant aftermarket income. We began with reciprocating compressors and later expanded into screw compressors, now the dominant factory technology.

How global is the business today?

Over the past decade, ELGi has expanded across Europe, North America, the Middle East, Australia, Southeast Asia and Africa. More than 50 percent of revenue comes from overseas, and North America is our largest international market. Our international business was built organically, and ELGi competes on performance rather than price. To reach our ambition, we must grow about 15 percent annually, supported by acquisitions and differentiated strategies.

What investments are supporting that growth?

We have committed nearly Rs 500 crore to a new campus spanning more than 100 acres outside Coimbatore. It is already operating and will become our principal production hub. We expect to complete the transition over the next three to four years while remaining disciplined about capital expenditure. FY26 revenue was approximately Rs 3,800 crore, with EBITDA margin near 15 percent.

Are electric vehicles and new-economy sectors meaningful opportunities?

Electric vehicles and battery-related manufacturing contributed significantly to volume growth last year, while semiconductors are also important. Data-centre capacity creation has not yet gathered equivalent momentum. Measuring the precise battery opportunity is difficult because India still imports many base cells, while ELGi often supplies component manufacturers serving both traditional and battery industries.

How long does a compressor normally last?

We generally plan around a 10-year life, although well-maintained machines can operate for 15 or 20 years. Harsh conditions in cement and textiles can increase wear, while round-the-clock factories may replace equipment earlier to secure energy savings. Maintenance quality, operating load, dust, heat and capacity changes all influence replacement decisions.

What savings does ELGi’s Demand Match technology deliver?

Demand Match adjusts compressor pressure according to the application’s requirement without relying on an expensive variable-frequency drive. Customers have achieved average energy savings of 7 percent to 16 percent, which is particularly valuable in energy-intensive textile operations. ELGi also helps plants remove pipeline leaks, avoid unnecessary pressure, select correctly sized machines and improve compressed-air usage.

What distinguishes ELGi’s research and product development?

Our research and development budget is around 30 percent to 40 percent above the industry standard. One example is the AB series water-injected compressor, designed for smaller food and pharmaceutical manufacturers needing oil-free air but unable to afford conventional systems costing four or five times more than lubricated machines.

It uses water for cooling, sealing and lubrication, producing its own water from atmospheric moisture after an initial distilled-water fill. It costs roughly 30 percent more than an equivalent oil-lubricated machine and is designed around a 10-year cycle.

How else does vertical integration improve efficiency?

ELGi manufactures its own air ends, supported by captive casting and machining capabilities, giving us close control over tolerances. We also make motors specifically matched to compressor applications, rather than adapting standard units. That can deliver another 5 percent to 7 percent efficiency improvement. With compressor engineering approaching physical limits, future gains will increasingly come from better system design, intelligent usage and precise manufacturing.

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