ELECON - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.1

📈 Positive

• 📊 Strong return metrics — ROCE at 29.1% and ROE at 22.6% reflect excellent capital efficiency.
• 💰 Low debt-to-equity ratio of 0.12 ensures financial stability and prudent leverage.
• 📈 PEG ratio of 0.62 suggests attractive valuation relative to growth.
• 📈 EPS of ₹23.8 supports solid earnings visibility.
• 📈 DII holding increased by 0.33%, indicating rising domestic institutional confidence.
• 📈 Volume above 1-week average suggests active investor interest.

⚠️ Limitation

• 📉 P/E of 31.4 is below industry average (51.3), but still elevated for capital goods sector.
• 📉 Dividend yield of 0.35% offers limited passive income.
• 📉 Quarterly PAT declined from ₹107 Cr. to ₹78.9 Cr., indicating margin compression.
• 📉 MACD at -6.02 and RSI at 50.4 reflect neutral technical momentum.
• 📉 Trading below DMA50 and DMA200 (₹574 and ₹577), suggesting short-term weakness.

📰 Company Negative News

• 📉 FII holding declined by 1.30%, indicating reduced foreign investor interest.
• 📉 Quarterly profit variation of 17.6% shows earnings volatility.

🌟 Company Positive News

• 📈 Trading near 52-week low (₹348), offering potential value entry point.
• 📈 Strong historical price performance with 58.5% gain over the year.

⚙️ Industry

• ⚙️ ELECON operates in the industrial gear and transmission equipment segment, serving infrastructure, mining, and energy sectors.
• 📊 Industry P/E of 51.3 reflects high growth expectations and cyclical exposure to capital goods demand.

🧭 Conclusion

• 📌 Suggested entry zone: ₹545–₹560, near support and below DMA levels for better margin of safety.
• 🕰️ Long-term holding favorable due to strong fundamentals, low debt, and industrial demand tailwinds.
• ⚖️ Monitor margin trends and foreign investor sentiment before aggressive accumulation.