Elecon Engineering Company Ltd (ELECON): Strong Q4 FY25 Performance with Technical Consolidation

Elecon Engineering Company Ltd, established in 1951 and headquartered in Anand, Gujarat, is a leading Indian manufacturer of industrial gears and material handling equipment. It serves key sectors like power, steel, cement, mining, and has global operations via subsidiaries in the UK, USA, Middle East, and Scandinavia.

📊 Q4 FY25 and FY25 Financial Highlights

  • Q4 FY25 Revenue: ₹798 cr, up ~41% YoY. EBITDA: ₹195 cr (+44% YoY), margin ~24.5%. PAT: ₹146 cr (+41% YoY).
  • FY25 Revenue: ₹2,227 cr (+15% YoY); EBITDA: ₹543 cr; PAT: ₹415 cr (+17%).
  • Q4 growth driven by industrial gears (+28.9%) and a surge in MHE division (+98.2%).

📈 Share Price & Technical Trends

  • ELECON stock closed at ₹646.10 on July 10, 2025, down ~4% over past year and ~3.8% intraday on July 11.
  • Analyst target is ₹682—implying ~6–9% upside.
  • Momentum is stable—operating above its 200-day moving average with high durability scores—but short-term MACD is mixed.

⚖️ Strengths & Risks

StrengthsRisks
Virtually debt-free, free cash flow, strong CAGR over last 5 years (~35–37%)Valuation is rich (~30× earnings), premium versus peers
High ROCE (~25%), diversified product divisions, international exposure (~23%)Global economic slowdown risk may impact exports and project demand
Robust performance in gear and material handling equipment segmentsTechnical chart shows strong resistance near ~₹662
Healthy dividend payouts—₹1.50 final dividend recently approvedAny capex delay could pressure future order inflows

🧭 Outlook & Catalysts to Monitor

  • Q1 FY26 guidance (Jul 15, 2025): Key for sustaining growth and margin trajectory.
  • Order backlog: Strong pipeline in industrial gears and MHE could drive sustained revenue.
  • Margin expansion: Continued leveraging of material handling business and operational efficiencies.
  • Technical trend: A break above ₹662–680 range could trigger near-term momentum.

✅ Conclusion

Elecon Engineering demonstrated impressive growth and profitability in Q4 FY25, continuing its trajectory as a high-quality, debt-free industrial leader. While valuation is elevated, strong free cash flow, robust margins, and solid technicals support a bullish case. Long-term investors can consider adding on any meaningful dip, while momentum traders may look for a breakout above ₹662.

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