Elecon Engineering Released Q1 FY2025 Results: PAT Margin Rose 110bps

Elecon Engineering Company Limited, one of the largest manufacturers of Industrial Gears, released its results for the quarter that ended June 30, 2024

For Q1FY25, Elecon reported consolidated revenues from operations of ₹392 crore, achieving an EBITDA margin of 23.5%. The company’s unwavering focus on profitability has been instrumental in its progress. Elecon delivered a PAT margin of 18.7% in Q1FY25, reflecting a Y-o-Y growth of ~ 110 bps and a Q-o-Q increase of around 30 bps.

Segmental Performance

Industrial Gear Division:

• Revenue for Q1FY25 stood at ₹334 Crore, compared to ₹361 Crore in Q1FY24. Revenue from the Gear division was impacted by weakness in order inflow due to general elections in Q1FY25.
• The company anticipates a demand uptick in the remaining 9M of FY25 to recoup the revenue loss in Q1 FY25.

MHE Division

• Revenue for the quarter stood at ₹58 Crore as compared to ₹54 Crore in the corresponding quarter last year, growing 9% Y-o-Y
• EBIT for Q1 FY25 stood at ₹15 Crore, registering a growth of 24% YoY. The EBIT margins stood at 26.0% as against 22.8% in Q1 FY24, an improvement of ~320 bps Y-o-Y primarily on account of a better product mix & higher contribution from the aftermarket segment.

Commenting on the results, Shri Prayasvin B. Patel, Chairman and Managing Director of Elecon Engineering Co. Ltd., said, “We continue to remain optimistic about new order wins across sectors and across both our divisions – Gear & MHE. We continue to lead the domestic market in the Gear Segment, attributed to our state of-the-art technology and our ability to provide customised solutions with the shortest lead times. This strategic advantage sets us apart from our competitors.”

He further added, “For the quarter ending June 2024, our revenue from operations in the Gear Division was ₹334 crores, compared to ₹ 361 crores in Q1FY24. This decrease is primarily due to slower order inflows during the last quarter, influenced by the general elections, which impacted both private and public capital expenditure. However, we anticipate that post-election stability and government support for infrastructure development will have a positive impact, and we remain committed to our annual guidance.”

The Chairman and Managing Director also stated, “Internationally, we are on track to achieve our goal of deriving 50% of our revenue from overseas markets by FY30. In Q1FY25, our international business contributed approximately 34% to our overall consolidated revenues. With strong endorsements from existing OEMs and our ongoing brand-building and marketing efforts, we are confident in reaching this ambitious target.”

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