Elecon Engineering Company (505700) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 consolidated revenue reached INR 578 crore, up 13.8% YoY, driven by strong domestic demand in Gear and MHE divisions; H1 FY26 revenue was INR 1,069 crore, up 18.7% YoY.

• EBITDA for Q2 FY26 was INR 126 crore (margin 21.7%), and PAT was INR 88 crore (margin 15.2%).

• Q2 FY26 order intake was INR 688 crore, up 28% YoY, with a strong order book and healthy pipeline supporting future growth.

• Domestic market contributed 77–79% of revenue, while overseas business faced geopolitical delays but maintained robust enquiry levels.

• Strategic focus on increasing export share to 50% of total revenue by FY 2030, supported by R&D and global OEM partnerships.

Financial highlights

• H1 FY26 consolidated revenue: INR 1,069 crore (up 18.7% YoY); Q2 FY26 revenue: INR 578 crore (up 13.8% YoY); EBITDA: INR 126 crore (margin 21.7%); PAT: INR 88 crore (margin 15.2%).

• Adjusted EBITDA for H1 FY26 was INR 231 crore (up 12.7% YoY); adjusted PAT was INR 156 crore (up 11.9% YoY), excluding one-time items.

• One-time incomes: INR 25 crore arbitration income in MHE division, INR 10 crore other income, INR 80 crore exceptional income from investment reclassification.

• EPS for H1 FY26 was INR 11.73.

• Gross margin for Q2 FY26 was 43.1%, down 200 bps YoY.

Outlook and guidance

• Management reaffirms confidence in achieving FY 2026 guidance: consolidated revenue of INR 2,650 crore and EBITDA margin of 24%.

• Expect margin normalization in H2 FY 2026 as volumes and operating leverage improve.

• Capex budget of INR 400 crore for FY 2026–2028, funded mainly by internal accruals.

• Interim dividend of INR 0.50 per share declared.

• Focus on expanding MHE division and strengthening global OEM relationships.