ELECON - Investment Analysis: Buy Signal or Bull Trap?
Last Updated Time : 20 Dec 25, 07:05 am
Back to Investment ListInvestment Rating: 4.0
| Stock Code | ELECON | Market Cap | 10,839 Cr. | Current Price | 483 ₹ | High / Low | 717 ₹ |
| Stock P/E | 26.9 | Book Value | 85.8 ₹ | Dividend Yield | 0.42 % | ROCE | 29.1 % |
| ROE | 22.6 % | Face Value | 1.00 ₹ | DMA 50 | 518 ₹ | DMA 200 | 556 ₹ |
| Chg in FII Hold | -1.30 % | Chg in DII Hold | 0.33 % | PAT Qtr | 78.9 Cr. | PAT Prev Qtr | 107 Cr. |
| RSI | 32.6 | MACD | -15.0 | Volume | 1,24,239 | Avg Vol 1Wk | 1,50,105 |
| Low price | 348 ₹ | High price | 717 ₹ | PEG Ratio | 0.53 | Debt to equity | 0.12 |
| 52w Index | 36.6 % | Qtr Profit Var | 17.6 % | EPS | 23.8 ₹ | Industry PE | 43.9 |
📊 Analysis: ELECON demonstrates strong fundamentals with ROE at 22.6% and ROCE at 29.1%, both well above compounding thresholds. Debt-to-equity at 0.12 reflects a healthy balance sheet. EPS at 23.8 ₹ is solid, and PEG ratio at 0.53 suggests attractive growth-adjusted valuation. Valuation is reasonable with P/E at 26.9 compared to industry average of 43.9, offering margin of safety. Dividend yield at 0.42% provides modest shareholder returns. Technicals show RSI at 32.6 (oversold), MACD negative (-15.0), and price below both 50 DMA (518 ₹) and 200 DMA (556 ₹), indicating bearish sentiment and potential correction. Quarterly PAT declined from 107 Cr. to 78.9 Cr., raising short-term concerns but long-term fundamentals remain intact.
💡 Entry Zone: Ideal entry would be in the 440–470 ₹ range, closer to valuation comfort and support levels. Current price (483 ₹) is near fair entry zone, making it attractive for accumulation.
📈 Exit Strategy: If already holding, maintain positions for long-term (3–5 years) given strong ROE/ROCE and attractive valuation. Consider partial profit booking near 600–650 ₹ resistance if valuations stretch further. Long-term holding is favorable due to consistent profitability, strong fundamentals, and sector resilience.
Positive
- 📌 Strong ROE (22.6%) and ROCE (29.1%) support compounding potential
- 📌 Debt-to-equity at 0.12 indicates robust balance sheet
- 📌 PEG ratio at 0.53 highlights attractive growth-adjusted valuation
- 📌 EPS at 23.8 ₹ reflects solid profitability
Limitation
- ⚠️ Quarterly PAT decline from 107 Cr. to 78.9 Cr.
- ⚠️ RSI at 32.6 indicates oversold momentum but bearish trend persists
- ⚠️ Price trading below DMA levels signals weak sentiment
- ⚠️ Dividend yield at 0.42% is modest
Company Negative News
- ❌ FII holding decreased (-1.30%)
- ❌ Short-term earnings decline raises sustainability concerns
Company Positive News
- ✅ DII holding increased (+0.33%)
- ✅ Strong fundamentals with high ROE/ROCE
Industry
- 🏦 Industry PE at 43.9, sector richly valued compared to ELECON
- 🏦 Capital goods sector benefiting from infrastructure and industrial growth
Conclusion
🔎 ELECON is a strong candidate for long-term investment with excellent ROE/ROCE, low debt, and attractive PEG valuation. Entry near 440–470 ₹ offers margin of safety. Existing holders should maintain positions for 3–5 years, targeting exits near 600–650 ₹ if valuations stretch further. Long-term compounding potential remains favorable given sector growth and company fundamentals.
Would you like me to extend this into a peer benchmarking overlay comparing ELECON against capital goods peers like ABB India, Siemens, and KSB to highlight relative valuation comfort zones?
Back to Investment ListNIFTY 50 - Today Top Investment Picks Stock Picks
NEXT 50 - Today Top Investment Picks Stock Picks
MIDCAP - Today Top Investment Picks Stock Picks
SMALLCAP - Today Top Investment Picks Stock Picks