Elecon Engineering Company (505700) Q3 24/25 earnings summary

Executive summary

• Consolidated Q3 FY2025 revenue grew 12% year-on-year to INR 529 cr, with 9MFY25 revenue up 4.1% to INR 1,429 cr; domestic markets contributed 76% and exports 24%.

• Gear division, accounting for 79% of Q3 revenue, saw 2.1% year-on-year growth, while MHE division revenue surged 71.9% year-on-year.

• Overseas revenue share reached 27% for 9MFY25, with a strategic goal of 50% by FY30.

• Order book as of December 31, 2024, stood at INR 684 cr, up from INR 572 cr a year ago, indicating strong future revenue visibility.

• Management revised FY2025 revenue guidance downward by 3% due to sectoral and macroeconomic headwinds but remains confident in maintaining EBITDA margins.

Financial highlights

• Q3 FY2025 consolidated EBITDA rose 18.4% year-on-year to INR 143 cr, with margin improving to 27% from 23.4%.

• Profit after tax for Q3 FY2025 was INR 108 cr (20.3% margin), up from INR 90 cr (19.1%) in Q3 FY2024.

• Nine-month FY2025 revenue grew 4.1% year-on-year to INR 1,429 cr; PAT for the period was INR 269 cr, up 6.6%.

• Order intake for 9MFY25 rose 20.7% YoY to INR 1,735 cr; open order book at INR 1,105 cr as of Dec 31, 2024.

• Strong cash position with net free cash surplus exceeding INR 500 cr as of December 31, 2024.

Outlook and guidance

• FY2025 revenue expected to miss earlier guidance by 3% due to delays in steel and sugar sector orders and global uncertainties.

• EBITDA margin guidance for FY2025 maintained at 24%.

• Management expects continued strong performance from the MHE division and healthy Q4 results.

• Focus remains on expanding overseas business and winning new OEM contracts.

• FY2026 guidance to be provided in the April Q4 earnings call.