ELGi’s perspective on the changing economy and buying behavior of people induced by pandemic
When the pandemic challenged organisations worldwide to serve their customers, communities and employees better, ElGi Equipments Ltd, learned, stayed resilient and expanded its business. ELGi has an ambitious aspiration to become the top three in the global air compressor business. To achieve this, ELGi recognized the need to adopt a management philosophy that builds vertical excellence in each operating function and customer-centric horizontal excellence across the business, operations, and support functions.
With solid systems and processes built into every touch point across the organisation, ELGi, with a net worth of 540 CR, posted 57cr standalone profit in Q2 for FY 2021-22 and a surge in their business performances. Sales of the company’s automotive business bounced back to pre-COVID stage and increased by 45%. Strategic investments in the Global market helped the company in FY-21-22 as the bulk of its growth came from North America, Europe, and Australia. ELGi provides products and services that are safe and contribute to sustainability throughout their life cycle, supporting its customer’s sustainability goals.
“Over the last almost two years, the world experienced chaotic economic manifestations. At the start of the pandemic, the world thought there would be a pause in economic activities resulting in massive disruptions to profits, earnings, and wealth. Contrary to this, after a very short disruption, the whole world surged ahead. The additional income in the hands of people from not spending on restaurants, hotels, and travel resulted in higher consumption of all forms of physical goods, with the work from home propelling the need for such goods. Besides, the relief and subsidies provided by governments worldwide spurred this spending even further. So much so that the world ended up with shortages, resulting in an unprecedented increase in the prices of almost all products and services.
With the world coming back to normalcy, people are beginning to spend on the services they had previously stopped. Besides, people have exhausted the additional consumption of physical goods. Both of these and the impact of inflation of personal income will cause the manufacturing economy to correct itself. With this, there would be a trickle-down effect of capacity build-up also slowing down. It would be wise to brace for this leveling of activity and focus inward on productivity and cost optimization”, said Dr. Jairam Varadaraj, Managing Director, ELGi Equipments Limited.