Target: ₹635
CMP: ₹410.25
Despite a robust order book, the company reported revenues of ₹522 crore during the quarter, reflecting a modest y-o-y growth of 4 per cent. The subdued performance was largely attributable to order delays and execution deferrals arising from customer-driven factors. Flattish revenue growth, higher employee costs and an unfavourable product mix also weighed on margins during the quarter.
Management has revised its FY26 revenue guidance downward by up to about 5 per cent from the earlier guidance of ₹2,650 crore.
Elecon continues to hold a leadership position in India across both the Industrial Gear Solutions and Material Handling Equipment segments, effectively leveraging growth opportunities in the domestic market. Simultaneously, the company remains focused on expanding its international footprint across multiple geographies. Its competitive strengths include advanced manufacturing capabilities supported by recently upgraded state-of-the-art machinery, a diversified portfolio of high-quality products, and the ability to deliver customised, engineered solutions with optimised lead times.
Domestically, sustained investment activity in sectors such as steel, power, and cement is expected to drive demand, while overseas operations are showing signs of recovery, with consistent traction and improving enquiry levels across regions. We continue to value the stock at 24x Sep’27E EPS, maintaining an unchanged target price of ₹635/share.