Elecon Engg.Co

Elecon Engineering reported a consolidated revenue of INR 529 crores for Q3 FY25, marking an 11.7% year-on-year growth. EBITDA grew by 18.4% to INR 143 crores, with margins expanding by 150 basis points to 27%. Profit after tax (PAT) increased to INR 108 crores, achieving a 20.3% margin. For the nine months ended December 2024, consolidated revenue was INR 1,429 crores (up 4.1% YoY) and PAT was INR 269 crores (up 6.6% YoY), with a stable EBITDA margin of 24.3%.

The MHE division was a key growth driver, with Q3 FY25 revenue surging 71.9% YoY to INR 112 crores and its EBIT margin expanding significantly by 1,300 basis points to 31.6%, primarily due to a favorable product mix and higher aftermarket contribution. In contrast, the Gear division, which contributes 79% of total revenue, saw modest 2.1% YoY growth in Q3 FY25 to INR 417 crores. Its EBIT margin improved slightly to 27.9%, but the division faced slowdowns in the domestic steel and sugar sectors and external macroeconomic challenges.

The company's consolidated order book stood at INR 684 crores as of December 31, 2024, a healthy increase from INR 572 crores a year prior. The MHE division's open order book was INR 421 crores, reflecting strong demand. While the FY25 revenue guidance was revised down by approximately 3% due to market uncertainties and project delays, management expressed confidence in maintaining a 24% EBITDA margin for the full year and a strong Q4 performance.

Elecon has incurred INR 75 crores in capex for the first nine months of FY25, with a full-year target of more than INR 150 crores, funded entirely through internal accruals. This capex is primarily for replacing old machines to enhance productivity and quality, and for special assignments for export customers. The company's OEM export business is performing well, with expected revenue from these orders revised upwards to INR 50-60 crores for FY25, from an initial estimate of INR 25-30 crores, confirming their sustainable and long-term nature.

Management noted a slowdown in new project initiations, particularly brownfield projects, with large Greenfield projects in advanced stages continuing. While steel and sugar sectors are experiencing delays for gear orders, the power and marine sectors are showing promising growth for FY26. The MHE business continues to see strong demand from power, steel, and cement sectors, even as the steel sector delays gear capex due to external pressures^🌐.

Elecon Engineering received approval for near-term science-based targets, committing to reduce its absolute Scope 1 and 2 greenhouse gas emissions by 54.6% by FY33, compared to its FY23 baseline. This commitment underscores the company's dedication to responsible business practices and environmental stewardship.