ELECON - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.4

⚙️ Core Financials Insight

Earnings & Growth

EPS: ₹23.0 ➜ solid earnings for industrial capital goods segment

PAT Qtr: ₹108 Cr vs ₹146 Cr ➜ decline, but up 46.6% YoY ➜ long-term growth intact

Returns & Ratios

ROE: 23.0% | ROCE: 28.5% ➜ very strong ➜ well-managed capital efficiency

Balance Sheet & Dividend

Debt-to-equity: 0.09 ➜ almost debt-free ➜ robust balance sheet

Dividend Yield: 0.35% ➜ modest ➜ reflects reinvestment strategy

📌 Takeaway: Lean financial structure with high profitability and operational agility.

📊 Valuation Snapshot

Metric Value Interpretation

P/E Ratio 28.9 undervalued vs industry average (57.2) ➜ attractive entry point

P/B Ratio ~6.49 (₹578 / ₹89.1) ➜ premium ➜ justified by earnings growth

PEG Ratio 0.69 low PEG ➜ signals undervaluation relative to growth

📉 Verdict: Favorable valuation ➜ PEG and P/E indicate growth is not yet priced in.

🏗️ Business Model & Strategic Moat

Manufacturer of gear and material handling equipment

Serves sectors like power, steel, cement, and defense

Moats

Technical leadership in industrial gearboxes

Long-standing client relationships & export exposure

Efficient capex utilization and automation

📌 Risks

Cyclical exposure to infra and capex budgets

Lumpy order inflows can impact quarterly performance

FX sensitivity from export revenues

📈 Technical Analysis

RSI: 35.2 ➜ near oversold ➜ potential for bounce

MACD: -18.3 ➜ bearish ➜ short-term weakness visible

Price slightly below DMA 50 & 200 ➜ consolidation ➜ wait for trend reversal

✅ Suggested Entry Zone: ₹545–₹565 📦 Accumulate gradually on dips — technical indicators favor re-entry once momentum stabilizes.

🧭 Long-Term Holding View

🔧 Ideal for investors seeking

Exposure to India’s industrial and infra-led capex cycle

Quality mid-cap with strong earnings and low debt

Domestic + export demand drivers

📊 Watch for

Order book expansion and execution visibility

Growth in export mix and new product lines

Automation-led margin improvement and scalability

Want to see how Elecon compares against peers like Triveni or Greaves Cotton on order momentum and margins? I can put together a head-to-head matrix for sharper insights.

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