💰 Financial Performance

Revenue Growth by Segment

Revenue from contracts with customers grew by 10.5% YoY. The Equipment business (Welding and Cutting) increased its revenue share to 32% from 26% in previous periods. Key growth drivers include Electrodes, Cored Wires, Gas Equipment, and Automation businesses.

Geographic Revenue Split

ESAB India is a leading player in the domestic market with a distribution network of ~200 distributors. The company reported an increase in the export of products, though specific regional percentage splits are not disclosed.

Profitability Margins

Profit After Tax (PAT) for H1 FY26 was INR 120.14 Cr, representing a 37.1% increase from INR 87.61 Cr in H1 FY25. Tangible net worth increased 10.2% to INR 375.5 Cr from INR 340.7 Cr in the prior fiscal year.

EBITDA Margin

Historical PBILDT margins are maintained between 11% and 13.5%. The company manages volatility by passing on raw material price increases to customers, ensuring core profitability remains stable.

Capital Expenditure

Capital expenditure for FY25 was INR 31.10 Cr, a 10.3% increase from INR 28.18 Cr in FY24. Spending was primarily focused on buildings for Global R&D and refurbishments of existing production lines.

Credit Rating & Borrowing

The company maintains a strong credit profile with nil debt and a Debt-Equity ratio of 0.011 as of March 2025, down from 0.015 YoY. Liquidity is supported by cash and investments of approximately INR 60 Cr.

⚙️ Operational Drivers

Raw Materials

Mild Steel and MS Wire Rods constitute 50% of the total raw material cost. Other specific materials include Non-Ferrous Metals, Minerals, Chemicals, and Piece Parts.

Import Sources

Sourcing is managed through global engagement with parent company teams, though specific countries of origin are not disclosed.

Capacity Expansion

Planned expansion includes refurbishments on existing lines and the development of Global R&D facilities; specific MTPA capacity figures are not disclosed.

Raw Material Costs

Raw material and component consumption costs were INR 306.76 Cr for H1 FY26, representing 41.8% of total revenue (INR 733.57 Cr).

Manufacturing Efficiency

Manufacturing efficiency is driven by continuous engagement with global teams and leveraging global business tools; specific utilization percentages are not disclosed.

Logistics & Distribution

Distribution is handled through a network of ~200 distributors spread across India.

📈 Strategic Growth

Expected Growth Rate

10.50%

Growth Strategy

Growth will be achieved through new product launches in key markets, expanding the export footprint for both goods and services, and capitalizing on the revival of the capital goods cycle. The company is also leveraging its Global R&D center to drive innovation.

Products & Services

Welding and cutting products, Electrodes, Cored Wires, Gas Equipment, and Automation systems.

Brand Portfolio

ESAB

New Products/Services

New products continued to grow in key markets during the year, contributing to the 10.5% overall revenue growth.

Market Expansion

Targeting increased export opportunities and leveraging the global footprint of the parent company, ESAB Corporation.

Market Share & Ranking

Leading player in the domestic welding and cutting products market; part of the Top 1000 companies by market capitalization in India.

Strategic Alliances

The company is a 73.72% subsidiary of ESAB Corporation, USA, and has no other joint ventures or associates.

🌍 External Factors

Industry Trends

The industry is seeing a revival in the capital goods cycle and a shift toward service-based revenue streams where India has a cost-competitive talent pool.

Competitive Landscape

Major player in the organized welding sector, competing on technology and distribution reach.

Competitive Moat

Moat is sustained by a dominant domestic market position, an extensive 200-distributor network, and access to the global technology and R&D of ESAB Corporation.

Macro Economic Sensitivity

Sensitive to commodity price cycles (steel) and the broader capital goods investment cycle in India.

Consumer Behavior

Increasing demand for new technology products and automated welding solutions.

Geopolitical Risks

Economic and geo-political headwinds are noted as factors causing softness in certain markets and pressure on pricing.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with SEBI LODR and Companies Act 2013; mandatory Risk Management Committee meetings are held twice annually.

Environmental Compliance

The company maintains a CSR policy aligned with Schedule VII of the Companies Act 2013; specific ESG spending amounts are not disclosed.

Taxation Policy Impact

Tax expense for H1 FY26 was INR 35.99 Cr. The company also wrote off INR 2.15 Cr in doubtful income tax receivables.

Legal Contingencies

Reported a write-off of INR 2.15 Cr for doubtful income tax receivables. No instances of fraud were reported during the period.

⚠️ Risk Analysis

Key Uncertainties

Volatility in raw material prices (Steel/Wire Rods), cyber security threats, and technology-driven business risks.

Geographic Concentration Risk

High domestic concentration with a pan-India distribution network of 200+ partners.

Third Party Dependencies

Significant dependency on steel suppliers, as steel products account for 50% of raw material consumption.

Technology Obsolescence Risk

The company identifies technology-driven risks as a key concern and is mitigating this through Global R&D investments.

Credit & Counterparty Risk

Allowance for expected credit loss was INR 1.35 Cr for H1 FY26, indicating relatively stable receivables quality.