Ingersoll Rand Sees Broad Demand Recovery, Long-Cycle Orders Accelerate

Demand is recovering broadly: Ingersoll Rand’s organic revenue growth improved from a 1% decline in the first quarter to approximately 4% growth in the second quarter. July orders in its Industrial Technologies and Services business rose in the mid-teens, with long-cycle projects across compressors, blowers, vacuum and pumps accelerating.

Growth investments and pipelines are expanding: The company has increased sales capacity, localized manufacturing in Brazil and India, and sees opportunities tied to nearshoring, semiconductors, infrastructure and potential Middle East rebuilding. North America is showing the strongest momentum, while India remains a bright spot within a mixed broader EMEA region.

Management expects margin and strategic improvement: Ingersoll Rand anticipates better price-cost trends in the second half and maintains long-term EBITDA margin targets of roughly 30% for ITS and mid-30% for PST. It is pursuing disciplined bolt-on acquisitions, with about 200 companies in its funnel, while China remains challenging due to overcapacity and pricing pressure.

Ingersoll Rand NYSE: IR executives said improving demand in short-, medium- and long-cycle businesses, combined with investments in commercial capabilities and engineered solutions, supported a more optimistic outlook for organic growth. Speaking at a Morgan Stanley conference, Chairman, President and Chief Executive Officer Vicente Reynal said the company moved from a 1% organic revenue decline in the first quarter to approximately 4% organic revenue growth in the second quarter. He said the improvement was broad-based across end markets and regions rather than driven by a single project or easy comparison.

Reynal said Ingersoll Rand has invested during the past 12 to 18 months in additional sales resources, new facilities and localized manufacturing. The company opened a facility in Brazil intended to localize technologies in Latin America and expanded compressor capacity in India following double-digit growth in that market.

Orders Improve Across Cycle Lengths Chief Financial Officer Vik Kini said Ingersoll Rand provided an unusual intra-quarter update because of encouraging order activity in July. Orders in the company’s Industrial Technologies and Services, or ITS, business were up in the mid-teens during the month, he said.

Kini said short- and medium-cycle momentum was comparable with the second quarter, while larger long-cycle projects accounted for the stronger growth rate. He said long-cycle orders included projects across compressors, blowers, vacuum and pumps and were geographically broad rather than concentrated in a single region. According to Kini, certain projects had remained active in the company’s sales funnel but experienced longer customer decision-making cycles. In July, several of those projects advanced to purchase-order stages. He said the company did not view the activity as a one-time “flush” of its funnel, citing healthy quoting activity and continued replenishment of potential projects.

Reynal said the long-cycle pipeline continues to expand, supported by areas including nearshoring, semiconductor-related investment and potential rebuilding activity in the Middle East. End markets for those projects include infrastructure, power generation, air separation, water and wastewater, food and beverage, and pharmaceuticals, Kini said.

Regional Trends and Engineered Solutions North America has shown the strongest r...