Elecon Engineering Q2FY26 Results: Profit at ₹8,772 Lakh; Stock Falls 8.7% After Margin Pressure

Vallabh Vidyanagar, October 10, 2025 – Elecon Engineering Company Limited (NSE: ELECON, BSE: 505700), a leading industrial gear and material handling manufacturer, has announced the financial results for the second quarter (Q2FY26) and half-year ended September 30, 2025. Despite posting consistent results (with an increase in Revenue from Operations and EBITDA), the stock plummeted by more than 8.60% and was trading at ₹551.35 (around 02:00 PM). The investors did not react well to the low profit growth and margin contraction despite steady revenue gains.

The company also declared an interim dividend of ₹0.50 per share. Still, it also did not change the mood on Dalal Street, as the share continued to move sideways after nosediving in the afternoon.

Stock Price Movement

The company’s stock fell sharply by 8.69% to ₹551.35 as of 2:00 PM IST on October 10, 2025, amid profit-booking after a sustained rally. The stock traded between ₹543.20 and ₹608.85 during the session, with a volume of 20.29 lakh shares and a VWAP of ₹569.31. Despite strong revenue growth, flat profit, and contracting margins, investor caution triggered a nearly 9% intraday decline. The counter remains well above its 52-week low of ₹376.95.

Financial Performance Overview

The company reported a strong operational performance in Q2FY26, with revenue rising 13.8% YoY to ₹57,813 lakh and EBITDA improving 11.9% to ₹12,600 lakh. However, profit after tax remained flat at ₹8,772 lakh due to margin pressure. EBITDA margin contracted by 37 bps to 21.7%, while PAT margin declined by 209 bps to 15.2%. For H1FY26, revenue grew 18.7% and PAT surged 63.4%, supported by higher operating leverage and improved profitability compared to the previous year.

Segment Performance

The Gear Division posted a 9% YoY rise in revenue to ₹44,100 lakh, supported by strong demand from the steel, power, and cement sectors. EBIT stood at ₹8,500 lakh with a margin of 19.2%, indicating stable profitability despite marginal pressure. The Material Handling Equipment (MHE) Division delivered robust growth with revenue up 33% YoY to ₹13,700 lakh and EBIT surging 34.9% to ₹3,500 lakh. A higher margin of 25.7% reflected efficiency gains and strong traction from new projects and aftermarket services.

Dividend Announcement

The company announced an interim dividend of ₹0.50 per share on a face value of ₹1 per share. The record date is October 16, and the payment will be on or after November 3, 2025.

Management Commentary

The company’s Chairman and MD, Mr. Prayasvin B. Patel, suggested that the company’s revenue and profitability have grown steadily, with order inflows increasing by around 28%. There is full-year guidance and confidence due to a huge order book and the company’s critical exposure in international markets, driven by product innovation, R&D investments, and global partnerships.

Founded in 1951, Elecon Engineering Company Limited is among Asia’s largest manufacturers of industrial gears and material handling equipment. With a manufacturing facility spread over 3.35 lakh sq. meters, the company serves over 95 countries in sectors such as cement, steel, sugar, defense, mining, and power. It is listed on NSE (ELECON) and BSE (505700) and forms part of the Nifty Smallcap 250 index.

REF: https://nsearchives.nseindia.com/corporate/ELECON2_10102025125853_OutcomeBM10102025.pdf

Disclaimer: At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations