Welding equipment major ESAB India Ltd says macro-economic factors including global headwinds are likely to pose growth challenges to its business in the current fiscal. However, the company sees a brighter spot in growing its services business. 

“Financing costs, volatilities in energy costs and input costs, inflation, geopolitical developments remain key factors with strong potential impact on the performance metrics of the company,” Kevin Johnson, Chairman, ESAB India said in the company’s annual report for 2022-23. 

ESAB India is an ultimate subsidiary of ESAB Corporation, USA. The company operates in fabrication technology which includes manufacture and sale of welding, cutting equipment, and consumables. It also provides engineering, support and consulting services in domestic and international markets. 

In FY23, ESAB India’s total revenues from contracts (including products and services) with customers grew 22 per cent year-on-year to ₹1,091 crore as against ₹896 crore in FY22. Of the same, revenues from sale of products accounted for 94 percent at ₹1,026 crore while services income contributed just over 5 per cent of the total revenue. Services income includes engineering, support and consulting services and management services to related parties. 

ESAB India’s product portfolio includes a range of welding and cutting automation products such as carbon arc gouging, engine driven welders, cutting machines, brazing and soldering equipment to name a few. The company said it continues looking for opportunities to grow the addressable markets through new products and rationalisation of products in the current portfolio.

Service income

“Service revenue streams continue to grow and we see opportunities to grow revenues from recharges on global services provided out of India,” Johnson said in the company’s management commentary. 

The company exports its products and services to Australia, Bangladesh, Brazil, Czech Republic, China, Saudi Arabia, Italy, and Germany to name a few. However, currently, 91 per cent of its total revenue comes from the Indian market while export revenues account for the remaining. 

Meanwhile, shares of ESAB India touched a 52-week high of ₹4,860 on NSE on Monday before closing at ₹4,829.