Ellenbarrie trims growth target after project unit runs out of spare capacity
Management guides for a 20% revenue CAGR, not 20-25%, as the project engineering division stops taking external work. A new power deal should cut costs by 55-60%.
— 2 earlier stories on Ellenbarrie Industrial Gases Ltd. →What's new
- Ellenbarrie cut its long-term revenue growth guidance from a 20-25% CAGR to 20%.
- The project engineering division won't bill external clients due to internal capacity constraints.
- A 25-year PPA for wind-solar hybrid power should cut costs by 55-60% at one plant.
Why this matters
The guidance cut is a hard cap on the growth story, but it comes with a margin offset. The PPA-driven power cost reduction and argon price recovery support a 40% EBITDA margin target. The trade-off is slower top-line growth for better profitability.
What we're watching
- The timeline for the merchant capacity expansion to 1,350 tpd by FY28.
- Whether the project engineering division can resume external work or is permanently sidelined.
- Margin performance as argon prices and power costs evolve over the next two quarters.
The full read
Ellenbarrie Industrial Gases cut its long-term revenue growth guidance to 20% CAGR, down from 20-25%, because its project engineering division is so busy internally it can't take outside work. That's a hard ceiling on top-line growth, and management was blunt about it on the May 25 call. The margin story is moving in the other direction. A new 25-year wind-solar hybrid PPA is expected to slash power costs by 55-60% at one Southern plant, supporting the medium-term target of a 40% EBITDA margin. The March quarter already showed that margin at 40%, a recovery from weak argon pricing earlier in the year. The expansion plan is to grow merchant capacity from 900 tpd to 1,350 tpd by FY28. The open question is whether slower growth but fatter margins is the right trade for a small-cap industrial gases player.
Questions answered
- Why did Ellenbarrie lower its long-term growth guidance?
- Management said its project engineering division is at full internal capacity and cannot take on new external projects that would generate revenue. The long-term CAGR target has been trimmed by five percentage points to 20%.
- What is the company doing to improve margins?
- It signed a 25-year wind-solar hybrid PPA that should cut power costs by 55-60% at one Southern facility. This, along with recovering argon prices, supported a 40% adjusted EBITDA margin for the core gases segment in the March quarter.
- How big is the planned capacity expansion?
- Ellenbarrie plans to increase merchant gases capacity from 900 tons per day to roughly 1,350 tpd by fiscal year 2028.
- What was the March quarter margin?
- The core gases segment delivered an adjusted EBITDA margin of 40% in the March quarter, recovering from softer argon prices earlier in the year.
Ellenbarrie Industrial Gases Ltd.
Latest quarter · Mar 2026
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Story so far
All notes on ELLEN →- 25 May 2026 · 5:38 PM IST Ellenbarrie trims growth target after project unit runs out of spare capacity
- 60d ago Ellenbarrie posts 9% gas-segment growth, flags argon price recovery
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