Elecon Engineering hits new high on strong Q1; stock doubles in 4 months

With strong order book in hand across segments, the management is optimistic of sustaining growth momentum going forward

Shares of Elecon Engineering Company rallied 18 per cent to hit a new high of Rs 748 per share in Tuesday’s intra-day trade, as the company’s strong growth momentum continued in first quarter (April-June) of fiscal year 2023-24 (Q1FY24).

In the past four months, the market price of the company nearly doubled or zoomed 97 per cent. It skyrocketed 5,340 per cent from its March 2020 low of Rs 13.75 on the BSE.

Elecon Engineering reported a 72.5 per cent year-on-year (YoY) jump in its consolidated profit after tax (PAT) at Rs 73 crore in June quarter (Q1FY24). The company is one of the largest solution providers of Industrial Gears in Asia along with Material Handling Equipments (MHE).
 

Consolidated revenue, meanwhile, grew 26.4 per cent YoY to Rs 414 crore from Rs 328 crore in previous year quarter. Adjusted reported earnings before interest, taxes, depreciation, and amortization (ebitda) margin improved 117 bps to 23 per cent.

The company said that they continued to focus on business of supplying products and aftermarket business for its MHE segment, which has led to sharp turnaround in the profitability for this segment.

The company, further, said it was witnessing increased enquiries across product categories & industries and with strong executable order book in hand, the company is optimistic of the growth momentum to sustain going forward.

The order inflow during Q1FY24 stood at Rs 497 crore, up 22 per cent YoY and orders in hand as on June 30, 2023 stands at Rs 793 crore.

"The capex cycle is on a growth trajectory driven by favorable government policies and schemes aimed at supporting infrastructure development. The company specialises in providing industry-agnostic gear solutions, which positions it well to capitalise on this upward trend," the management said.

With strong order book in hand across segments, continued focus to penetrate the exports markets, and maintaining leadership position in the domestic geography, the management is optimistic of sustaining growth momentum going forward.

Elecon Engineering has been able to establish its position as one of Asia’s largest and India’s Largest Industrial Gear Manufacturing Company, having manufacturing facility spread over 3.3 lakh Square Meter.

The product solutions include designing, manufacturing, supply, erection and commissioning of the products, which are majorly used in Cement, Sugar, Defense, Steel, Mining and Power sector along with other sectors.