Elecon has built a strong global presence through subsidiaries in Europe and the U.S., strengthened further by the Benzlers–Radicon acquisition. With a longstanding reputation for engineering excellence and innovation, Elecon delivers comprehensive, end-to-end industrial solutions, positioning it as a key player in the capital goods and heavy engineering space.
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Axis Securities Report
We initiate coverage on Elecon Engineering Ltd. with a Buy recommendation. For FY26, the company has maintained a revenue guidance of Rs 2,650 crore and Ebitda margins above 24%. This implies an impressive revenue growth of 20% YoY in H2 FY26 over H2 FY25.
Moreover, in H2 FY26, the company is expected to deliver a notable 48% revenue growth over H1 FY26.
Over the medium term, the company is expected to sustain this momentum. This will be driven by-
Order book growth of 19% (CAGR) over FY25-28E, supported by robust demand from key end markets,
Timely capacity expansions coupled with stronger research and development capability and export focus,
Improved profitability with Ebitda margins reaching above 25%, and
Enhanced free cash flows (~2x in FY28E vs FY25).
Accordingly, we expect revenue/Ebitda/PAT to grow at 19%/21%/17% CAGR over the FY25-FY28E period.
The stock currently trades at a Sep’27E PE of 19 times, and we value the stock at 24x of Sep’27E EPS, translating into a target price of Rs 635/share. This implies an upside of 27% from the current market price.
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