Elecon Engineering Company
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Elecon Engineering Company is navigating a pivotal phase characterized by aggressive global expansion and a strategic shift towards higher-margin, innovation-led revenue streams. Management's positive outlook is supported by a record order book and strong demand across domestic and international markets, particularly in the Material Handling Equipment (MHE) division, which has shown significant revenue growth. However, the company faces execution risks, particularly in its Gear Division, where recent performance has been impacted by delayed order inflows and geopolitical uncertainties. Vista's financial outlook reflects stable revenue growth aligned with historical performance, although margins are expected to remain under pressure due to competitive pricing and input cost volatility. The macro environment in India remains supportive, with improving manufacturing activity and favorable liquidity conditions. Over the next 12-24 months, key opportunities include the successful execution of international projects and the expansion of the MHE division, while watchpoints include potential industrial capex slowdowns and ongoing geopolitical risks that could affect international performance
Why We Like This Stock
- Strong order book and robust demand in the Material Handling Equipment division provide revenue visibility
- Strategic global expansion, including a new subsidiary in Mexico, enhances market presence and mitigates tariff impacts
- Management's focus on innovation and R&D investments supports long-term growth potential
Things To Watch Out For
- Execution risks in the Gear Division due to delayed order inflows and geopolitical uncertainties could impact performance
- Margin pressures from competitive pricing and input cost volatility may hinder profitability
- Potential slowdowns in industrial capex could affect overall demand and growth prospects
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 1,937 | 2,227 | 2,366 | 2,486 | 2,855 |
| Profit Before Tax (Cr.) | 461 | 535 | 475 | 405 | 507 |
| PBT Margin | 23.8% | 24.0% | 2007.6% | 16.3% | 17.8% |
| Net Profit (Cr.) | 353 | 412 | 357 | 304 | 380 |
| Earnings Per Share | 15.8 | 18.4 | 15.9 | 13.6 | 17.0 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Axis Securities | ▲ Buy | 600 | 15-Jul-2026 |
| Emkay Global | ▲ Buy | 600 | 11-Jun-2026 |
Company Overview
Show Company Profile
Elecon Engineering Company Limited manufactures and sells industrial gears and material handling equipment in India and internationally. The company operates in two segments, Material Handling Equipment and Transmission Equipment. It offers helical and bevel helical, planetary, worm, wind turbine, marine, and custom-built gear boxes; and customized gear boxes, loose gears, and couplings. The company also provides material handling equipment, such as raw material handling systems, stackers, scrapers/reclaimers, bagging and weighing machines, wagon and truck loaders, crushers, wagon tipplers and associated equipment, feeders, idlers and pulleys, magnates/weighers/detectors, port equipment, and cable reeling drums; and alternate energy products. In addition, it engages in the ferrous and non-ferrous foundry business. Further, the company offers gearbox repair and refurbish services; and material handling equipment support services. It serves cement, sugar, defense, steel, mineral, metal, mining, power, plastic, material handling, chemical, crane, paper, rubber, marine, and fertilizer industries, as well as windmills. Elecon Engineering Company Limited was founded in 1951 and is based in Vallabh Vidya Nagar, India.