Elecon Engineering Company (505700) Q1 25/26 earnings summary

Executive summary

• Consolidated Q1 FY26 revenue grew 25% YoY to INR 491 crore, driven by strong domestic demand and robust order inflows in both Gear and MHE divisions.

• EBITDA reached INR 130 crore with a margin of 26.6%, and PAT was INR 175 crore, including one-time arbitration settlements and an exceptional gain from investment reclassification.

• Order book as of June 30, 2025, stood at INR 1,110 crore, providing strong revenue visibility.

• Strategic focus on international markets, aiming for 50% revenue from overseas by FY30.

• Board approved reconstitution of committees and noted the upcoming cessation of an Independent Woman Director's term.

Financial highlights

• Revenue: INR 491 crore (+25% YoY); EBITDA: INR 130 crore (+41% YoY); PAT: INR 175 crore (+139% YoY), with EBITDA margin at 26.6%.

• One-time arbitration claim settlements contributed INR 25 crore to revenue and INR 10 crore to other income; INR 80 crore recognized as exceptional gain.

• Gear Division EBIT margin declined to 18.4% due to higher costs and accelerated depreciation; MHE Division EBIT margin rose to 46% (adjusted 27%).

• Standalone revenue from operations was INR 41,008 lakhs, with net profit after tax at INR 23,892 lakhs.

• Earnings per share (consolidated) for the quarter stood at INR 7.82 (basic and diluted), compared to INR 3.27 in Q1FY25.

Outlook and guidance

• On track to achieve FY26 revenue guidance of INR 2,650 crore, supported by robust order inflow and strong demand in core sectors.

• Expect EBITDA margin to normalize at 24% on a steady-state basis as new capacity ramps up.

• MHE Division targets INR 650 crore revenue for FY26 with a sustainable margin of 23%.

• Defense sector expected to contribute INR 200 crore in orders this year, with potential for larger orders in future.

• Strategic focus on growing international revenue share to 50% by FY30, with ongoing investments in R&D and global partnerships.