⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
ELECON - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | ELECON | Market Cap | 8,858 Cr. | Current Price | 395 ₹ | High / Low | 717 ₹ |
| Stock P/E | 23.8 | Book Value | 85.8 ₹ | Dividend Yield | 0.51 % | ROCE | 29.1 % |
| ROE | 22.6 % | Face Value | 1.00 ₹ | DMA 50 | 454 ₹ | DMA 200 | 526 ₹ |
| Chg in FII Hold | -0.22 % | Chg in DII Hold | 0.35 % | PAT Qtr | 61.9 Cr. | PAT Prev Qtr | 78.9 Cr. |
| RSI | 39.7 | MACD | -23.9 | Volume | 3,92,788 | Avg Vol 1Wk | 4,80,588 |
| Low price | 348 ₹ | High price | 717 ₹ | PEG Ratio | 0.47 | Debt to equity | 0.12 |
| 52w Index | 12.6 % | Qtr Profit Var | -32.7 % | EPS | 22.5 ₹ | Industry PE | 35.4 |
📊 Core Financials
- Revenue growth: Moderately stable but quarterly PAT declined (61.9 Cr vs 78.9 Cr).
- Profit margins: Healthy with EPS at 22.5 ₹, though recent profit contraction is a concern.
- Debt ratios: Strong, debt-to-equity at 0.12 indicates low leverage.
- Cash flows: Supported by consistent profitability and manageable debt.
- Return metrics: ROCE 29.1 %, ROE 22.6 % — strong efficiency and shareholder returns.
💹 Valuation Indicators
- P/E ratio: 23.8, below industry average (35.4), suggesting undervaluation.
- P/B ratio: Current Price / Book Value ≈ 4.6, moderately expensive relative to assets.
- PEG ratio: 0.47, attractive, indicates undervaluation relative to growth.
- Intrinsic value: Appears undervalued given strong returns and growth potential.
🏢 Business Model & Competitive Advantage
- Operates in industrial gear manufacturing and transmission solutions.
- Strong presence in engineering and capital goods sector with diversified applications.
- Competitive advantage through specialized products and established market reputation.
📈 Entry Zone & Long-Term Guidance
- Entry zone: Attractive near 348–370 ₹ levels, close to 52-week low.
- Long-term holding: Favorable due to strong ROE/ROCE and low debt; suitable for investors seeking industrial growth exposure.
Positive
- Strong ROCE (29.1 %) and ROE (22.6 %).
- Low debt-to-equity ratio (0.12).
- P/E ratio below industry average, indicating undervaluation.
- PEG ratio at 0.47 highlights growth potential.
- DII holdings increased (+0.35 %).
Limitation
- Quarterly PAT declined (-32.7 % variation).
- Stock trading below DMA 50 and DMA 200, showing weak momentum.
- Dividend yield at 0.51 % is modest.
Company Negative News
- Recent quarterly profit contraction from 78.9 Cr to 61.9 Cr.
- FII holdings decreased (-0.22 %).
- Technical indicators weak: RSI at 39.7, MACD negative.
Company Positive News
- Strong fundamentals with high ROE and ROCE.
- Low debt ensures financial stability.
- Industry demand for capital goods supports long-term growth.
Industry
- Capital goods and engineering sector benefiting from infrastructure and industrial expansion.
- Industry PE at 35.4, higher than ELECON’s P/E, suggesting relative undervaluation.
Conclusion
- ELECON shows strong fundamentals with high efficiency and low debt.
- Valuation appears attractive compared to industry peers.
- Entry advisable near lower support levels; long-term holding recommended for investors seeking exposure to industrial growth.
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