Elecon Engineering Company Limited

Elecon Engineering reported a 14% year-on-year growth in consolidated revenue from operations, reaching INR 578 crores in Q2 FY26. For the first half of FY26, adjusted consolidated revenue stood at INR 1,043 crores, up 15.76% from H1 FY25. Consolidated EBITDA for Q2 FY26 was INR 126 crores, a 12% YoY increase, with a margin of 21.7%. H1 adjusted EBITDA was INR 231 crores, with a margin of 22.1%. Profit after tax for Q2 FY26 was INR 88 crores, representing a 15.2% margin.

The company demonstrated strong order intake in Q2 FY26, totaling INR 688 crores, a 28% growth year-on-year. Domestic order intake grew 32% to INR 516 crores, while overseas order intake increased 18% to INR 172 crores. The open order book as of September 30, 2025, stood at INR 771 crores for the Gear division and INR 455 crores for the MHE division, providing strong revenue visibility for upcoming quarters.

The Gear division, contributing 76% of consolidated revenue, delivered INR 441 crores in Q2 FY26, growing 9% YoY. Its EBIT margin, however, declined to 19.2% from 21.5% in Q2 FY25 due to product mix and higher employee costs. The Material Handling Equipment (MHE) division continued its strong growth trajectory, with revenue up 33% YoY to INR 137 crores and EBIT margin improving to 25.7% from 25.4% in Q2 FY25. MHE order intake surged 83.6% YoY to INR 191 crores.

Overseas business remained flat in Q2 FY26, impacted by timing-related^📎 delays in order receipt and execution due to geopolitical volatility^🌐 in select international markets. Management acknowledged these delays but expressed confidence that the underlying demand remains healthy and execution will pick up pace in H2 FY26. The strategic vision includes increasing the share of exports to 50% of total revenue by FY30, with efforts to penetrate new territories like South America and parts of Europe and the Middle East.

Elecon reiterated its annual guidance for FY26, targeting consolidated revenue of INR 2,650 crores and an EBITDA margin of 24%. The company plans a capex budget of INR 400 crores for FY26 to FY28, aimed at capacity enhancement, quality improvement, and addressing wear and tear. This capex will be partly funded by internal accruals, with the balance potentially through operating leases. Management expects Gear division margins to normalize to around 25% by year-end as volumes scale up in H2.

The company provided updates on significant defense projects, anticipating tenders for P-17 Bravo ships in Q3 FY26 and order finalization by Q3/Q4 FY27. The INR 200 crores Aircraft Carrier order is expected to materialize in Q4 FY26 or Q1/Q2 FY27. While onboarding 18 new OEMs, management noted some delays in ramp-up due to geopolitical situations but expects orders of at least INR 30-40 crores from these clients. The company is also manufacturing units for new generation petroleum vessels (NG-OPVs).