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Elecon Engineering Co. Ltd.
(ELECON)
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Rating:71Outperform
Price Target:
₹475.00
▲(12.24% Upside)
Action:Reiterated
Date:10/15/26
The score is driven primarily by strong underlying profitability and a conservative balance sheet, reinforced by positive guidance and improving overseas/order-book indicators from the earnings call. These positives are tempered by FY2026 cash-conversion deterioration and revenue/earnings softness, while the high P/E and low dividend yield reduce valuation support despite an overall constructive technical trend.
Positive Factors
Debt-light balance sheet
Elecon’s debt-light position and substantial net cash provide financial flexibility to fund capital expenditure, support customer projects, and withstand operating volatility. Low leverage also reduces financing pressure, allowing management to pursue international expansion and other growth initiatives with greater resilience.
Negative Factors
Weaker cash conversion
The decline in free-cash-flow conversion means reported earnings are translating less efficiently into usable cash. If this persists, higher working-capital needs or other cash absorption could constrain internal funding, reduce flexibility, and weaken the quality of near-term earnings.
Read all positive and negative factors
Positive Factors
Negative Factors
Debt-light balance sheet
Elecon’s debt-light position and substantial net cash provide financial flexibility to fund capital expenditure, support customer projects, and withstand operating volatility. Low leverage also reduces financing pressure, allowing management to pursue international expansion and other growth initiatives with greater resilience.
Read all positive factors
Elecon Engineering Co. Ltd. (ELECON) vs. iShares MSCI India ETF (INDA)
Market Cap
₹96.41B
Dividend Yield0.47%
Average Volume (3M)185.83K
Price to Earnings (P/E)39.4
Beta (1Y)1.84
Revenue Growth4.79%
EPS Growth-52.69%
CountryIN
Employees2,452
SectorGeneral
Sector StrengthN/A
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)10.91
Shares Outstanding224,399,930
10 Day Avg. Volume293,513
30 Day Avg. Volume185,827
Financial Highlights & Ratios
PEG Ratio-1.41
Price to Book (P/B)3.71
Price to Sales (P/S)3.62
P/FCF Ratio43.96
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)17.05
Revenue Forecast (FY)₹26.28B
Elecon Engineering Co. Ltd. Business Overview & Revenue Model
Company Description
Elecon Engineering Company Limited specializes in the production and global distribution of power transmission and material handling machinery. Its business activities are categorized into two primary divisions: Material Handling Equipment and Tra...
Elecon Engineering Co. Ltd. Earnings Call Summary
Earnings Call Date:Oct 14, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Jan 27, 2027
Earnings Call Sentiment Positive
The call was predominantly positive. Q2 and H1 revenue and EBITDA grew, Gear division margins improved, MHE and overseas order intake increased, the balance sheet remained debt-light with approximately INR 700 crore of net cash, credit-rating outlook improved, and management reiterated medium double-digit H2 revenue growth and long-term international expansion targets. These positives were tempered by domestic execution softness, raw-material and inflationary pressures, lower MHE margins, capacity constraints, and deferred defense ordering.Positive Updates
Consolidated Q2 Revenue and Profitability Growth
Q2 FY 2027 revenue from operations increased 10.5% year-on-year to INR 639 crore from INR 578 crore, and increased 22.7% sequentially from INR 521 crore in Q1 FY 2027. EBITDA rose 17.7% to INR 148 crore, with EBITDA margin expanding by 140 basis points to 23.1%. Profit after tax grew 9.8% to INR 96 crore, with PAT margin at 15.1%.
Negative Updates
Near-Term Domestic Market Softness
Management reported near-term softness in domestic activity. It attributed slower project execution to the monsoon not progressing as expected, with some projects moving slowly, although it said the orders were firm and fixed and some manufactured goods were awaiting delivery.
Read all updates
Q2-2027 Updates
Positive
Negative
Consolidated Q2 Revenue and Profitability Growth
Q2 FY 2027 revenue from operations increased 10.5% year-on-year to INR 639 crore from INR 578 crore, and increased 22.7% sequentially from INR 521 crore in Q1 FY 2027. EBITDA rose 17.7% to INR 148 crore, with EBITDA margin expanding by 140 basis points to 23.1%. Profit after tax grew 9.8% to INR 96 crore, with PAT margin at 15.1%.
Read all positive updates
Company Guidance
Management guided to medium double digit consolidated revenue growth for remaining part of the year, later clarified as mid double digit revenue growth for H2, somewhere around 15% in that range, while maintaining minimum EBITDA margin at last year's level; MHE EBIT margin guidance remains in range of 22%-24% for the year, and gear EBIT margin guidance remains 20%-22%. By FY 2030, management is confident of reaching 50% of turnover from overseas markets and achieving an INR 5,000 crore top line.Elecon Engineering Co. Ltd. Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
82
Very Positive
Cash Flow
64
Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 24.77B | 23.66B | 22.27B | 19.37B | 15.30B | 12.12B |
| Gross Profit | 9.30B | 10.63B | 9.89B | 8.83B | 6.66B | 5.31B |
| EBITDA | 4.77B | 5.84B | 5.52B | 4.81B | 3.43B | 2.58B |
| Net Income | 2.45B | 3.41B | 4.15B | 3.56B | 2.38B | 1.40B |
Balance Sheet | ||||||
| Total Assets | 35.62B | 32.34B | 27.29B | 21.24B | 17.32B | 17.18B |
| Cash, Cash Equivalents and Short-Term Investments | 9.85B | 8.53B | 7.25B | 4.78B | 2.29B | 871.86M |
| Total Debt | 3.61B | 2.73B | 1.81B | 704.60M | 515.76M | 1.51B |
| Total Liabilities | 10.53B | 9.28B | 7.31B | 5.20B | 4.53B | 6.68B |
| Stockholders Equity | 25.09B | 23.06B | 19.99B | 16.04B | 12.79B | 10.50B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 1.95B | 3.66B | 3.33B | 2.63B | 2.01B |
| Operating Cash Flow | 0.00 | 3.14B | 4.32B | 3.65B | 3.10B | 2.50B |
| Investing Cash Flow | 0.00 | -2.20B | -3.16B | -2.79B | -1.67B | -118.46M |
| Financing Cash Flow | 0.00 | -1.22B | -673.70M | -585.10M | -1.45B | -2.50B |
Elecon Engineering Co. Ltd. Technical Analysis
Negative
423.20
Price Trends
435.49
Negative
460.95
Negative
451.49
Negative
Market Momentum
-2.34
Positive
46.69
Neutral
23.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:ELECON, the sentiment is Negative. The current price of 423.2 is below the 20-day moving average (MA) of 443.56, below the 50-day MA of 435.49, and below the 200-day MA of 451.49, indicating a bearish trend. The MACD of -2.34 indicates Positive momentum. The RSI at 46.69 is Neutral, neither overbought nor oversold. The STOCH value of 23.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:ELECON.
Elecon Engineering Co. Ltd. Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | ₹96.41B | 39.36 | ― | 0.47% | 4.79% | -52.69% | |
69 Neutral | ₹37.58B | 64.86 | ― | 0.81% | -14.22% | -37.57% | |
62 Neutral | ₹144.84B | 43.02 | ― | 0.93% | 17.70% | -1.58% | |
60 Neutral | ₹278.05B | 50.87 | ― | 0.47% | 22.66% | 15.61% | |
59 Neutral | ₹163.73B | 91.68 | ― | 0.87% | 12.78% | -40.29% | |
56 Neutral | ₹41.03B | 18.88 | ― | 0.74% | -14.32% | -2.83% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
IN:ELECON
Elecon Engineering Co. Ltd.
429.65
-129.09
-23.10%
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Elecon Engineering Co. Ltd. Corporate Events
Elecon Engineering Posts Q2 FY27 Earnings Call Transcript for Investors
Oct 22, 2026
Elecon Engineering Company Limited has released the official transcript of its Q2 FY27 earnings conference call, held on October 15, 2026, and filed the document with both BSE and the National Stock Exchange of India. The edited transcript, coveri...
Elecon Engineering Declares Interim Dividend and Approves Half-Year Results
Oct 14, 2026
Elecon Engineering Company Limited’s board, meeting on 14 October 2026, approved the unaudited standalone and consolidated financial results for the quarter and half year ended 30 September 2026, underscoring its ongoing financial reporting ...
Elecon Engineering Approves Q2 Results and Announces Interim Dividend
Oct 14, 2026
Elecon Engineering’s board has approved the unaudited standalone and consolidated financial results for the quarter and half year ended 30 September 2026, signaling completion of a key financial reporting milestone under SEBI disclosure norm...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.