An investment of Rs 1 lakh in Elecon Engineering in April 2020, when the stock traded at around Rs 14, would be worth approximately Rs 33.6 lakh at a share price of Rs 470. That represents a gain of nearly 3,257% in about six and a half years, as the industrial engineering company expanded its business, improved operating margins and strengthened its presence in overseas markets.
Elecon Engineering manufactures industrial gear solutions and material handling equipment used in sectors such as power, steel, cement, mining and infrastructure. Its growth has been supported by demand from these industries, a stronger gearbox business and expansion into international markets. However, the company's recent performance also shows why investors need to look beyond a stock's past returns.
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How The Business Has Grown
The company's consolidated revenue more than doubled between FY20 and FY26, rising from around Rs 1,088 crore to Rs 2,366 crore. Consolidated Ebitda also increased substantially, reflecting the expansion of the business over the six-year period.
Consolidated financials | FY20 | FY26 |
Revenue | Rs 1,088 crore | Rs 2,366 crore |
Ebitda, before other income | Rs 140.4 crore | Rs 523 crore |
Net profit | Rs 89.7 crore | Rs 341 crore |
So, the multibagger run of Elecon is well supported by the 2.2 times increase in its revenue and around a 3.7 times rise in its Ebitda. The company also improved its operating margin over the period, with the FY26 consolidated Ebitda margin at 22.1%.
Growth, however, has not been uniform. In FY26, consolidated revenue increased 6.2% to Rs 2,366 crore, but reported net profit declined to Rs 341 crore from Rs 415 crore in FY25. The gear division faced delays in order inflows and customer-led postponements, while the material handling equipment division reported revenue growth of 43.6%.
Gear Business And Order Book Support Growth
Elecon's industrial gear division remains a key part of its business. Its products serve industrial customers that require specialised power transmission equipment, including companies in the power, steel, and cement sectors.
In the June quarter of fiscal 2027, the gear division reported revenue of Rs 416 crore, up 16.3% year-on-year. The division's open order book stood at Rs 1,043 crore as of June 30, 2026, up 46.9% from a year earlier.
In the September quarter, overseas revenue increased 30.6% year-on-year to Rs 159 crore. Elecon has secured overseas orders for its material handling equipment division as well, extending its reach beyond its established gear business.
The material handling equipment division reported revenue growth in the September quarter, although profitability was affected by an unfavourable product mix, higher input costs, and slower project execution.
Elecon Engineering Q2 FY27 results
Elecon reported a 10.5% year-on-year increase in consolidated revenue to Rs 639 crore in the September quarter. EBITDA rose 17.7% to Rs 148 crore, while net profit increased 9.8% to Rs 96 crore. The EBITDA margin expanded to 23.1% from 21.7% a year earlier.
The gear division's revenue rose 10.6% to Rs 488 crore, while EBIT increased 27.2% to Rs 108 crore. Its open order book stood at Rs 1,056 crore at the end of September.
The material handling equipment division reported revenue of Rs 151 crore, up 10.4%. Order intake rose 32.5% to Rs 253 crore, and its open order book grew 27.3% to Rs 579 crore. However, profitability remained under pressure from an unfavourable product mix, higher input costs and slower project execution.
Consolidated order intake increased 8.4% to Rs 746 crore in the September quarter. The total open order book reached Rs 1,635 crore as of September 30, 2026, up around 33% year-on-year. Elecon has also outlined capital expenditure of around Rs 400 crore over FY26-28 to upgrade manufacturing facilities and expand capacity.
What Investors Should Watch
Elecon's future performance will depend on its ability to convert its order book into revenue, execute projects on schedule, and sustain margins. Investors will also track whether the material handling equipment division can improve execution and profitability while overseas business continues to expand.
The stock's substantial rise makes valuation and future earnings growth important considerations. Its past returns demonstrate the scale of the rally, but they do not guarantee similar returns going forward.
Also read: 20% Jump In Six Months: Elecon Engineering Share Price Jumps 12% In Trade
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