Elecon Engineering Co. Ltd. (ELECON) AI Stock Analysis

• Market Cap: ₹91.07B
• Dividend Yield: 0.41%
• Average Volume (3M): 47.36K
• Price to Earnings (P/E): 18.9
• Beta (1Y): 1.96
• Revenue Growth: 20.94%
• EPS Growth: 45.63%
• Country: IN
• Employees: 1,974
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 3.20
• Shares Outstanding: 224,399,930
• 10 Day Avg. Volume: 66,917
• 30 Day Avg. Volume: 47,361
• PEG Ratio: 1.44
• Price to Book (P/B): 5.01
• Price to Sales (P/S): 4.49
• P/FCF Ratio: 27.32
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 18.33
• Revenue Forecast (FY): ₹25.49B

• Rating: 73 Outperform
• Price Target: ₹453.00 ▼(-12.48% Downside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score is primarily driven by strong financial performance (growth, margins, low leverage, and solid cash generation). Offsetting this is a weaker technical picture with the stock trading below key medium/long-term moving averages and a negative MACD. Valuation is supportive but not a major upside catalyst given the modest dividend yield.

Positive Factors

Robust Profitability

Elecon's very strong gross, EBIT and net margins indicate durable pricing power and operational efficiency across engineered products. High margins provide buffer against input cost swings, fund reinvestment into manufacturing and R&D, and support sustainable earnings even during modest top-line variability.

Conservative Balance Sheet

A low leverage profile and high equity backing materially reduce refinancing and solvency risk, giving the company flexibility to finance large project bonds or capex from internal resources. Strong ROE shows effective capital use, supporting long-term resilience and capacity to pursue growth opportunities.

Healthy Cash Generation

Consistent operating cash conversion and positive free cash flow growth underpin sustainable funding for aftermarket services, spare parts inventory and project working capital. Reliable cash generation strengthens the firm's ability to self-fund capex and service-led recurring revenue expansion.

Negative Factors

Cyclicality of End Markets

Elecon's revenue mix is concentrated in heavy industrial sectors that follow multi-year capex cycles. This structural exposure makes order inflows and equipment demand highly sensitive to macro and commodity cycles, increasing medium-term revenue and utilization volatility.

Project Execution & Working Capital Risk

A large share of sales comes from engineered, milestone-driven projects. Such contracts carry execution complexity, timing risk and elevated working capital needs; delays or cost overruns can compress margins and defer cash realization, affecting sustainable earnings visibility.

Modest Shareholder Yield

The company's modest dividend payout offers limited immediate cash returns to investors. While retention can support reinvestment, low shareholder yield reduces appeal to income-focused holders and provides less cushion for shareholder returns if cash generation weakens.

Elecon Engineering Co. Ltd. Business Overview & Revenue Model

Company Description

Elecon Engineering Company Limited manufactures and sells power transmission and material handling equipment in India and internationally. The company operates in two segments, Material Handling Equipment and Transmission Equipment. It provides helical and bevel helical, planetary, worm, high speed, wind turbine, marine, and custom built gear boxes; customized gear boxes; loose gears; vertical roller mill drives; elign geared, elflex flexible, fluid, scoop controlled variable speed controlled fluid, and torsion shaft couplings; and elevator traction machines. 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. Elecon Engineering Company Limited serves cement, sugar, defense, steel, mining, power, plastic, material handling, chemical, palm oil, crane, paper, rubber, marine, and fertilizer industries, as well as windmills and ports. The company was founded in 1951 and is based in Vallabh Vidyanagar, India.

How the Company Makes Money

ELECON generates revenue primarily through the sale of its industrial products, including gearboxes and bulk material handling systems. The company also earns income from providing engineering services, project management, and after-sales support to its clients. Key revenue streams include direct sales to industrial customers, long-term contracts for large-scale projects, and maintenance services. Additionally, ELECON has established partnerships with various firms to enhance its product offerings and expand its market reach, which contributes to its overall earnings. The company's diverse clientele across multiple sectors further stabilizes its revenue sources.

Elecon Engineering Co. Ltd. Financial Statement Overview

Summary

Strong fundamentals supported by high Income Statement (90) and Balance Sheet (88) scores, reflecting solid revenue growth (16.8%), robust margins (net margin 18.6%, EBIT margin 37.3%), low leverage (debt-to-equity 0.09), and healthy returns (ROE 20.8%). Cash flow quality is also strong (85) with good cash conversion (operating cash flow to net income 1.04).

Income Statement

Elecon Engineering Co. Ltd. has demonstrated remarkable revenue growth over the years, with the latest annual growth rate being 16.8%. The company maintains strong profitability with a gross profit margin of 46.7% and a net profit margin of 18.6% for the last reported year. Moreover, the EBIT margin stands at 37.3%, showcasing efficient operational management. The consistent revenue growth and robust margins indicate a strong competitive position in the industry.

Balance Sheet

The balance sheet of Elecon Engineering reflects a solid financial structure with a low debt-to-equity ratio of 0.09, indicating conservative leverage. The company exhibits a healthy equity ratio of 73.2%, suggesting strong asset backing. The return on equity is robust at 20.8%, signifying effective utilization of shareholders' funds. The company's strong equity position and prudent leverage management contribute to its financial stability.

Cash Flow

Elecon Engineering's cash flow statement shows a healthy Free Cash Flow growth of 9.9% year-over-year. The operating cash flow to net income ratio is 1.04, indicating efficient cash generation relative to profits. Additionally, the free cash flow to net income ratio stands at 0.88, reflecting effective conversion of profits into cash. The positive cash flow metrics highlight strong cash management and operational efficiency.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	23.95B	22.27B	19.37B	15.30B	12.12B	10.44B
Gross Profit	10.71B	9.89B	8.83B	6.66B	5.31B	4.66B
EBITDA	5.72B	5.28B	4.72B	3.33B	2.49B	1.81B
Net Income	5.17B	4.15B	3.56B	2.38B	1.40B	576.31M
Balance Sheet
Total Assets	29.96B	27.29B	21.24B	17.32B	17.18B	19.93B
Cash, Cash Equivalents and Short-Term Investments	8.19B	7.25B	4.78B	2.29B	871.86M	1.41B
Total Debt	2.58B	1.81B	704.60M	515.76M	1.51B	3.35B
Total Liabilities	7.52B	7.31B	5.20B	4.53B	6.68B	10.73B
Stockholders Equity	22.44B	19.99B	16.04B	12.79B	10.50B	9.19B
Cash Flow
Free Cash Flow	0.00	3.66B	3.33B	2.63B	2.01B	2.44B
Operating Cash Flow	0.00	4.32B	3.65B	3.10B	2.50B	2.48B
Investing Cash Flow	0.00	-3.16B	-2.79B	-1.67B	-118.46M	-186.78M
Financing Cash Flow	0.00	-673.70M	-585.10M	-1.45B	-2.50B	-2.10B

Elecon Engineering Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 517.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 517.6 is above the 20-day moving average (MA) of 437.16, above the 50-day MA of 438.50, and below the 200-day MA of 548.26, indicating a bearish trend. The MACD of -5.37 indicates Positive momentum. The RSI at 39.69 is Neutral, neither overbought nor oversold. The STOCH value of 18.72 is Positive, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELECON	73 Outperform	₹91.07B	18.91	―	0.41%	20.94%	45.63%
ELGIEQUIP	66 Neutral	₹164.67B	40.62	―	0.47%	9.46%	18.97%
INGERRAND	66 Neutral	₹123.77B	47.81	―	2.34%	5.68%	9.74%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KSB	62 Neutral	₹129.02B	47.70	―	0.51%	9.50%	14.52%
CRAFTSMAN	59 Neutral	₹183.04B	54.75	―	0.07%	54.58%	-12.30%
ISGEC	58 Neutral	₹63.84B	26.93	―	0.59%	-4.14%	-35.66%

Elecon Engineering Co. Ltd. Corporate Events

Elecon Engineering Releases Q3 & 9M FY26 Investor Presentation Ahead of Earnings Call

Elecon Engineering Company Limited has released its investor presentation for the third quarter and nine-month period of the 2025-26 financial year, ahead of its scheduled earnings conference call on 9 January 2026. The presentation, now available to stock exchanges and on the company’s website, is intended to brief investors and analysts on the company’s latest financial and operational performance, underscoring Elecon’s ongoing compliance with disclosure regulations and its emphasis on maintaining clear, timely engagement with capital-market stakeholders.

Elecon Engineering Wins Favourable Order in CGST Transport Dispute

Elecon Engineering Company Limited has received a favourable order from the Office of the Deputy Commissioner of State Tax (Appeal), Vadodara, which approved the company’s appeal against an earlier order by the State Tax Officer related to the detention of a transport vehicle over missing documents under Section 129 of the CGST Act. The company had previously paid a disputed penalty of ₹14,01,764 to secure release of the vehicle, and while the refund of this amount is still pending, management has clarified that the latest ruling carries no adverse financial or operational implications, signalling a positive resolution of the tax litigation and removing a potential compliance overhang for stakeholders.

Elecon Engineering Schedules Earnings Call to Discuss Q3 FY26 Performance

Elecon Engineering Company Limited has announced that Elara Securities (India) Private Limited will host an earnings conference call on 9 January 2026 to discuss the company’s financial performance for the quarter and nine months ended 31 December 2025. Senior management, including the heads of the Gear and Material Handling Equipment divisions and the chief financial officer, will participate, signaling the importance of the update for analysts and investors tracking the company’s operational progress and segment-wise performance.

Elecon Engineering Shuts Trading Window Ahead of Q3 FY26 Results Board Meet

Elecon Engineering Company Limited has announced the closure of its trading window for designated persons and their immediate relatives from 1 January 2026 until 48 hours after the conclusion of an upcoming board meeting, in line with SEBI’s Prohibition of Insider Trading Regulations and the company’s internal code of conduct. The board will meet on 8 January 2026 at Vallabh Vidyanagar to consider and approve the unaudited standalone and consolidated financial results, including segment-wise performance, for the quarter and nine months ended 31 December 2025, signalling the next key financial disclosure milestone for investors and other stakeholders.