ELECON - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | ELECON | Market Cap | 11,369 Cr. | Current Price | 507 ₹ | High / Low | 717 ₹ |
| Stock P/E | 32.0 | Book Value | 91.3 ₹ | Dividend Yield | 0.39 % | ROCE | 22.4 % |
| ROE | 19.2 % | Face Value | 1.00 ₹ | DMA 50 | 435 ₹ | DMA 200 | 481 ₹ |
| Chg in FII Hold | -0.96 % | Chg in DII Hold | 1.19 % | PAT Qtr | 97.0 Cr. | PAT Prev Qtr | 61.9 Cr. |
| RSI | 68.3 | MACD | 26.8 | Volume | 8,42,846 | Avg Vol 1Wk | 8,24,127 |
| Low price | 352 ₹ | High price | 717 ₹ | PEG Ratio | 1.37 | Debt to equity | 0.12 |
| 52w Index | 42.4 % | Qtr Profit Var | -22.7 % | EPS | 21.2 ₹ | Industry PE | 37.9 |
Financials & Valuation:
ELECON shows strong fundamentals with ROCE (22.4%) and ROE (19.2%) indicating efficient capital utilization. EPS of 21.2 ₹ supports profitability, though quarterly PAT (97 Cr.) declined from 61.9 Cr. previously, reflecting some volatility. Debt-to-equity is low at 0.12, ensuring financial stability.
Valuation Indicators:
P/E ratio of 32.0 is slightly below the industry average (37.9), suggesting fair valuation. Book Value of 91.3 ₹ compared to current price of 507 ₹ shows premium pricing, but justified by strong returns. PEG ratio of 1.37 indicates moderate valuation relative to growth. Dividend yield of 0.39% provides limited income support.
Business Model & Health:
ELECON, a leader in industrial gear and transmission solutions, benefits from infrastructure and manufacturing demand. Strong profitability metrics, low leverage, and rising DII holdings (+1.19%) reinforce overall health, though FII holdings declined (-0.96%).
Entry Zone & Holding Guidance:
Technically, support lies around 460–475 ₹, with resistance near 530–550 ₹. Entry near support levels offers favorable risk-reward. Long-term holding is recommended given strong fundamentals and industry demand, though short-term volatility should be managed.
Positive
- Strong ROCE (22.4%) and ROE (19.2%).
- EPS of 21.2 ₹ supports profitability.
- Low debt-to-equity (0.12).
- DII holdings increased (+1.19%), showing domestic confidence.
Limitation
- Quarterly profit variation (-22.7%) indicates volatility.
- FII holdings declined (-0.96%).
- Dividend yield remains modest at 0.39%.
- RSI (68.3) suggests near overbought levels.
Company Negative News
- Decline in FII holdings.
- Profit variation shows inconsistency in earnings.
Company Positive News
- Quarterly PAT improved to 97 Cr. from 61.9 Cr. earlier.
- DII holdings increased, reflecting domestic institutional support.
- Strong demand outlook in industrial gear sector.
Industry
- Industrial equipment sector benefits from infrastructure expansion and manufacturing growth.
- Industry PE (37.9) supports fair valuation benchmarks.
- Long-term demand driven by capital goods and heavy engineering investments.
Conclusion
ELECON is fundamentally strong with efficient capital use, low debt, and fair valuation. Entry near 460–475 ₹ offers a favorable setup. Long-term investors can hold confidently, supported by industry growth and consistent profitability, while monitoring short-term volatility.
Would you like me to also prepare a peer benchmarking overlay comparing ELECON against other capital goods players like Siemens, ABB India, and Thermax for relative strength analysis?