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 performance 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 INR 80 crore exceptional income from investment reclassification.

• Gear Division contributed 73% of revenue with 6% YoY growth; MHE Division revenue surged 139% YoY, aided by arbitration settlement.

• Domestic market accounted for 75% of revenue, up 41.4% YoY, while overseas revenue declined 7% YoY due to Middle East delivery holds.

• Maintained leadership in industrial gear solutions and material handling equipment, with strong domestic and international demand.

Financial highlights

• Revenue grew 25% YoY to INR 491 crore; EBITDA up 41% YoY to INR 130 crore; PAT up 139% YoY to INR 175 crore.

• EBITDA margin was 26.6% (23.5% last year); adjusted margin at 22.6% due to higher costs and product mix.

• Recognized INR 25 crore in revenue and INR 10 crore in other income from arbitration settlements; INR 80 crore as exceptional income from investment reclassification.

• Order book as of June 30, 2025, stands at INR 1,110 crore, up 17.2% YoY.

• 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, representing 19% growth over FY25.

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

• Strategic focus on expanding international revenue share to 50% by FY30, supported by alliances, R&D, and product innovation.

• 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.