Buy Elecon Engineering; target of Rs 750: Emkay Global Financial

Emkay Global Financial' research report on Elecon Engineering

EBITDA margin was lower by 37bps YoY, on account of unfavorable mix in the gear business. The flat PAT growth was owing to increase in depreciation on new capacity commissioning and higher tax rate. On a positive note, order inflow jumped up 28% YoY to Rs6.9bn, taking the order backlog to Rs12.3bn, up 27% YoY. The management indicated a strong enquiry pipeline across the business and exuded confidence in achieving Rs26.5bn revenue for FY26 as against 1HFY26 reported revenue of Rs11bn. Besides the strong domestic demand, we expect exports to see a meaningful recovery on the back of increased focus on key geographies, such as Europe, Middle East, Americas, Nordic countries, and Russia. We estimate revenue and PAT CAGR at 21% and 24%, respectively, over FY25-28.

Outlook

We maintain BUY on Elecon Engineering Company (EECL), with TP of Rs 750. EECL reported a mixed set of results for Q2FY26, with consolidated revenue/EBITDA/PAT growing 14%/12%/flat YoY.

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Elecon Engineering - 14102025 - emkay