Elecon Engineering company - latest results highlights-
One of Asia’s largest Industrial gear manufacturing company. Capable of making complex gear boxes for Defence applications (Indian Navy)
Has widest range of gear applications across Industrial sectors - industry agnostic
Mfg and assembly plants in India, UK, Sweden, US and Netherlands
Has in house foundry and fabrication facility
Has robust Mkt Share in highly fragmented and unorganised Mkt
Industries served - Power, Cement, Sugar, Steel, Defence, Rubber, Mining etc
Export revenues @ 30 pc
Also has a material handling Division. Has now turned profitable
Q1, FY 24 highlights -
Sales - 414 vs 328 cr, up 26 pc
EBITDA - 96 vs 72 cr ( @ 23.1 vs 21.9 pc )
PAT - 73 vs 42 ( @ 17.6 vs 13 pc )
87 pc revenues from Industrial Gears, 13 pc from Material Handling business
Segment wise performance -
Gears - Sales - 485 vs 361 cr, up 26 pc. EBIT - 89 vs 55 cr, up 60 pc
Material Handling - Sales - 54 vs 43 cr, up 25 pc, EBIT - 12 vs 5 cr, up 160 pc
Past 5 yr CAGRs -
Sales- 12 pc
EBITDA- 34 pc
PAT- 38 pc
Current consolidated order book @ 790 cr
Aim to hit FY 24 sales @ 2000 cr with 22 pc EBITDA margins (with a scope of margin improvement)
Company witnessing increasing demand from Africa. To set up a fully owned subsidiary to cater to that demand
Company has a net Cash surplus position of aprox 250 cr at the end of Q1
Have entered newer Mkts- Australia, South America. Seeing good response here
Have got 5 new OEM orders in Q1. Can generate an annual revenue of around 40 cr from these OEMs
May lead to bigger business going fwd, as the relationship matures-company is bullish about the situation
Expecting good orders coming in from Defence sector from next FY onwards. FY 26,27 also look promising iro defence orders
Replacement sales in Q1 as a proportion of total sales was at 33 pc
Company sees a ROSY demand picture in FY 25 and beyond as well
Likely to start supplying gear boxes to Railways and Metros in near future
Current capacity utilisation @ 76 pc. Nominal capex required for next 2-3 Yrs as the company can also resort to sub-contracting
At present, 70 pc of company’s customers are repeat customers
Disc : planning to take up a tracking position
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