ESAB India Limited: history, ownership, mission, how it works & makes money

A Brief History of ESAB India Limited

ESAB India Limited, a subsidiary of ESAB Corporation, has a robust history in the industrial equipment sector, particularly in welding and cutting technologies. Established in 1987, it has grown to become a key player in the Indian market. The company is headquartered in Bangalore and has a diverse product range, including welding consumables, equipment, and cutting systems.

In the financial year 2022-2023, ESAB India Limited reported a revenue of ₹1,211 crore, marking a growth of approximately 14% compared to ₹1,062 crore in the previous year. The company has consistently demonstrated a strong performance, with compounded annual growth rate (CAGR) in revenue of about 12% over the past five years.

Operating profits have also shown a positive trend. The EBITDA for FY 2022-2023 was recorded at ₹225 crore with a margin of 18.6%, a slight decline from the previous fiscal year’s EBITDA of ₹232 crore, which had a margin of 21.8%. This decrease in margin can be attributed to rising raw material costs and supply chain challenges.

ESAB India Limited's net profit for FY 2022-2023 stood at ₹157 crore, compared to ₹153 crore in FY 2021-2022, indicating a year-over-year growth of 2.6%. The earnings per share (EPS) for the latest fiscal year was reported at ₹39.56, up from ₹38.50 in the previous year.

As of October 2023, the company's stock is listed on the National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE) under the ticker symbol ESABINDIA. The stock has performed well, with a year-to-date increase of approximately 25%, reflecting robust investor confidence and market conditions favoring industrial stocks.

ESAB India has also initiated various sustainability efforts, aiming to reduce environmental impact through innovative technologies. The company invested around ₹30 crore in green initiatives in FY 2022-2023, which focus on energy efficiency and waste reduction.

In addition to its financial success, ESAB India Limited has built a solid reputation within the industry for its commitment to quality and customer service. The company has an extensive distribution network with over 2,000 dealers across the country, ensuring its products are readily available in the market.

Looking ahead, ESAB India Limited plans to expand its product offerings and tap into emerging markets, particularly in renewable energy sectors, which are expected to grow significantly in the coming years. The management anticipates that this strategic direction will contribute to sustained revenue growth and market leadership.

A Who Owns ESAB India Limited

ESAB India Limited, a leading player in the welding and cutting industry, is a subsidiary of the global entity ESAB Corporation, which itself is part of the Colfax Corporation. As of October 2023, ESAB India has a diverse ownership structure.

According to the latest data, the major shareholders of ESAB India Limited include:

As of the most recent earnings report for Q2 2023, ESAB India Limited reported a revenue of ₹1,100 crores, reflecting a growth of 15% year-over-year. The company also achieved a net profit of ₹150 crores, with a net profit margin of 13.64%.

In terms of stock performance, ESAB India Limited trades on the National Stock Exchange of India (NSE) under the ticker symbol "ESABINDIA." As of October 2023, the share price was approximately ₹1,200, with a market capitalization of around ₹6,000 crores. In the past 12 months, the stock has experienced a 25% increase in value.

Investment from foreign institutional investors (FIIs) has also been significant, with FIIs holding approximately 20% of the total shares, reflecting strong global interest in the company.

The Board of Directors includes prominent individuals from various sectors, ensuring a robust governance structure. Key members include:

• Ms. Anjali Kumar - Managing Director
• Mr. Rajesh Gupta - Chief Financial Officer
• Mr. Ravi Sharma - Independent Director

Overall, the ownership composition, coupled with a solid financial performance and strategic leadership, positions ESAB India Limited favorably within the global welding and cutting market. The company continues to leverage its parent corporation's resources and expertise while expanding its footprint in India and other emerging markets.

ESAB India Limited Mission Statement

ESAB India Limited, a subsidiary of ESAB Corporation, is recognized for its commitment to providing high-quality welding and cutting solutions. The company's mission statement articulates its dedication to customer satisfaction, innovation, and sustainability. It emphasizes delivering superior products and services while ensuring that the impact on the environment is minimized.

The mission statement can be broken down into several key components that illustrate the company’s strategic intentions:

• Customer Commitment: ESAB aims to consistently exceed customer expectations through quality products and exceptional service.
• Innovation: The company is focused on pioneering technologies and solutions that improve efficiency and safety in welding and cutting.
• Sustainability: ESAB is dedicated to sustainable practices that reduce its environmental footprint and promote social responsibility.
• Employee Development: The organization values its workforce, investing in training and development to foster a culture of excellence.

Financial Overview

As of the latest fiscal year ended March 31, 2023, ESAB India Limited has showcased considerable financial performance:

In the context of its mission, ESAB India Limited actively invests in research and development. For the fiscal year 2022-2023, the company allocated approximately 5% of its total revenue towards R&D activities, aiming to enhance product innovation and maintain its competitive edge in the market.

The company also focuses on expanding its market share. In 2021, ESAB held approximately 15% of the Indian market for industrial welding equipment, reflecting its strong brand reputation and customer loyalty. This mission-driven focus propels ESAB towards achieving leadership in the welding and cutting industry.

Moreover, ESAB India Limited has established various initiatives to bolster sustainability. In 2023, it reported a reduction of nearly 10% in carbon emissions from its manufacturing processes compared to the previous year, aligning with its mission to minimize environmental impacts. The company has set ambitious targets to further reduce emissions by 20% by 2025.

The mission statement of ESAB India Limited, therefore, is not only a declaration of intent but is also supported by tangible financial metrics and strategic initiatives that guide its operations and align with market demands.

How ESAB India Limited Works

ESAB India Limited is a leading manufacturer of welding and cutting solutions in India. It operates as a subsidiary of ESAB Corporation, which is headquartered in the United States. The company is involved in manufacturing, marketing, and servicing a wide range of welding and cutting equipment and consumables.

The core business areas of ESAB India include:

• Welding Consumables
• Welding Equipment
• Cutting Systems
• Service and Maintenance

For the fiscal year ending March 2023, ESAB India reported a revenue of INR 1,280 crore, representing a growth of 12% from the previous year. The company achieved an EBITDA of INR 295 crore, with an EBITDA margin of 23.0%.

The company has a strong market presence in various sectors including shipbuilding, construction, automotive, and heavy engineering. The strategic partnerships with global leaders in technology and manufacturing boost its product offerings, ensuring that ESAB India stays at the forefront of innovation.

In terms of geographical performance, ESAB India derives a significant portion of its revenue from key states such as Maharashtra, Gujarat, and Tamil Nadu. The company operates multiple manufacturing facilities across India, with the main plant located in Chakan, Pune.

As of September 2023, ESAB India’s market capitalisation stood at approximately INR 5,500 crore, with a P/E ratio of around 34.0. The stock has shown robust performance, gaining approximately 25% year-to-date.

ESAB India focuses heavily on research and development, allocating about 3% of its annual revenue towards R&D initiatives. This investment is aimed at enhancing product quality and developing new technologies to meet evolving market demands.

The company’s product lines include:

• Electrode and wire consumables for various welding processes
• Gas cutting and plasma cutting equipment
• Welding automation solutions
• Safety equipment for welding operations

With sustainability becoming increasingly important, ESAB India is also committed to reducing its carbon footprint. Initiatives to optimize energy use in manufacturing processes and the introduction of environmentally friendly products are core components of its sustainability strategy.

ESAB India has consistently rewarded its shareholders through dividends, with a dividend yield of approximately 1.2% as of the latest fiscal year. The company has a steady track record of increasing its dividend payouts, reflecting its robust profitability and commitment to returning value to investors.

How ESAB India Limited Makes Money

ESAB India Limited, part of the ESAB Corporation, operates in the field of welding and cutting solutions. The company derives its revenue primarily from the manufacturing and sale of welding consumables, equipment, and cutting systems.

In the financial year 2022-2023, ESAB India reported a total revenue of ₹2,194 crore, reflecting a growth of approximately 15% compared to the previous fiscal year. The growth is attributed to increased demand across various sectors such as construction, automobile, and manufacturing.

The following table illustrates the revenue breakdown from key segments for the fiscal year 2022-2023:

ESAB's revenue model is significantly driven by its strong focus on innovation and the introduction of new products. The company invested around 7% of its annual revenue into research and development during the last fiscal year, leading to the launch of advanced welding technologies that cater to various industrial needs.

Additionally, ESAB India operates through a wide distribution network, which enhances its market presence. The company boasts over 5,000 active distributors and dealers across India, facilitating extensive reach in both urban and rural areas. This extensive distribution capability has enabled the company to capture a larger market share.

The geographical revenue distribution for ESAB India in 2022-2023 is presented in the following table:

Profitability is another key aspect of ESAB India’s financial success. For the year 2022-2023, the company reported a net profit of ₹275 crore, achieving a net profit margin of approximately 12.5%. This improvement in profit margins was driven by effective cost management and operational efficiencies.

Moreover, ESAB India has a strong commitment to sustainability, which not only enhances its brand reputation but also opens up new revenue streams in environmentally conscious sectors. The company engages in manufacturing products that comply with international environmental standards, enhancing its attractiveness to a growing segment of eco-conscious businesses.

Financial health is crucial for continued growth. As of March 2023, ESAB India holds a debt-equity ratio of 0.1, indicating a strong balance sheet with minimal leverage, and improving its capacity for future investments.

In summary, ESAB India Limited's revenue generation is a combination of diverse segments, geographical reach, innovative product offerings, and solid financial management, positioning the company strongly in the welding and cutting industry.