Elecon Engineering Company (505700) Q4 25/26 earnings summary

Executive summary

• Celebrated 75 years of operations, maintaining leadership in industrial gears and material handling equipment (MHE).

• MHE division remains a key growth driver, with specialized capabilities and strong sectoral demand.

• Gear division faced a 21% YoY revenue decline in Q4 due to delayed orders and customer deferments, but fundamentals remain strong.

• MHE division posted 37% YoY revenue growth in Q4, driven by robust demand in power, cement, mining, and ports.

• Consolidated FY 2026 revenue grew 6% YoY, supported by a healthy order book and execution pipeline.

Financial highlights

• Q4 FY 2026 consolidated revenue: INR 746 crore, down from INR 798 crore YoY.

• Q4 order inflows: INR 657 crore, up 1.9% YoY.

• Q4 EBITDA: INR 158 crore (21.2% margin); PAT: INR 108 crore (14.5% margin), excluding INR 108 crore goodwill impairment.

• FY 2026 adjusted revenue: INR 2,341 crore vs INR 2,227 crore in FY 2025, excluding INR 25 crore arbitration award.

• FY 2026 adjusted EBITDA: INR 498 crore (21.3% margin); reported PAT: INR 341 crore, including exceptional items.

Outlook and guidance

• Expect gradual normalization in order flows and execution as macro conditions stabilize.

• Guidance for FY 2027 is on hold due to ongoing macroeconomic uncertainty; will revisit outlook when clarity improves.

• Not expecting degrowth in FY 2027; anticipate growth, but magnitude is uncertain.