Broker’s call: Elecon Engineering (Buy)

Target: ₹751

CMP: ₹542.95

Elecon Engineering Company Ltd. (EECL) saw revenue growth of about 14 per cent on a y-o-y basis in Q2-FY26. During the quarter, domestic market revenue increased by about 18 per cent on a y-o-y basis due to strong demand from the power, steel, and cement sectors, accounting for about 79 per cent of total revenue.

However, the international business, which accounts for about 21 per cent of total revenue, was flat on a YoY basis.

The gear division, which accounted for about 76 per cent of total revenue, grew by about 9 per cent on a y-o-y basis. The growth was on the softer side due to delayed executions amid geopolitical challenges. However, the MHE business, which accounts for around 24 per cent of total revenue, grew by 33 per cent on a y-o-y basis. The EBITDA margin was 22 per cent in Q2FY26 compared to 23 per cent in Q2 FY25.

The decline in margin is attributed to an increase in employee costs and a change in product mix. PAT remained flat on a y-o-y basis. During the quarter, the order book and order intake grew by around 27 per cent and about 28 per cent on a y-o-y basis. The domestic business continued to see strong growth, while the current geopolitical situation in the Middle East market has impacted the international business.

Published on October 16, 2025