AI-generated · cited to primary sources · not investment advice · How we research
Elecon Engg.Co
Our verdict on Elecon Engg.Co isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The MHE division showed strong growth with revenue up 16.3% YoY in Q3 and 39.1% in 9M FY26 (excluding arbitration income). (1 exceeded, 2 met across 3 tracked commitments)
“MHE is expected to generate a revenue of INR 650 crores for this year. That is year ended March 31, 2026.”
The commissioning of 7 MW (4 MW solar and 3 MW wind) remains under progress as of Q3 FY26. (1 in progress across 1 tracked commitment)
“Additional 7 MW is under commissioning (4 MW of solar and 3 MW of wind)”
See the full cited Management analysis of Elecon Engg.Co
How durable is the business?
The Gear Division revenue grew 6% YoY to Rs. 357 crores, but margins contracted significantly due to accelerated depreciation from a new facility and higher employee costs. Despite the margin dip, the segment is expanding its order book and entering high-growth areas like defense. (5 expanding across 1 engine)
“MHE: 274 (37%) ... +36.8% ... MHE Division: The division continued its strong growth trajectory during the quarter and year, driven by a strategic focus on product supply and capitalizing on expanding opportunities in after-sales services.”
The company's scale advantage is being reinforced by a record open order book of Rs. 1,226 crores, providing high revenue visibility. (1 expanding)
“Open Order as at 30th September 2025 stands at Rs. 1,226 crores (vs. Rs. 966 crores as at 30th September 2024)”
See the full cited Business Model analysis of Elecon Engg.Co
Where does growth come from?
The new Gear division facility was capitalized in Q4 FY25 and is currently in the ramp-up phase. While it caused a short-term margin dip due to depreciation, it is expected to generate Rs. 500 crores in additional revenue. (2 new trend across 2 signals)
“Only Company in India having capability to manufacture Complex Gear box for Defence: Indian Navy”
New order inflows for the Gear division are accelerating, growing 21% YoY, which offsets the slight slowdown in immediate revenue delivery. (4 accelerating, 1 steady across 5 signals)
“Open Order as at 31st March 2026 stands at Rs. 1,292 crores, 36% increased on YoY basis.”
See the full cited Future Growth analysis of Elecon Engg.Co
What could break the thesis?
The risk is STABLE. While RoNW dipped slightly to 21% in FY25, the company recognized a massive Rs. 80 Crore exceptional gain in Q1FY26 which will bolster the equity base and future returns. (2 stable, 1 emerging, 1 intensifying, 1 high-severity)
“Profit after Tax (PAT) was ₹ 108 crores (excluding Impairment loss of Goodwill ₹ 102 Crores recognized as an exceptional item below PBT)”
The risk is INTENSIFYING as Gear Division revenue dropped 21% YoY in Q4FY26 and EBIT margins fell from 24.6% to 19.3%. Management attributes this to extended dispatch schedules and customer deferments. (1 intensifying, 1 emerging, 3 easing, 1 high-severity)
“Revenue from the Gear Division impacted in Q4 FY26, primarily attributable to delays in order inflows, extended dispatch schedules, and the deferment of deliveries by customers amid ongoing global macroeconomic challenges.”
See the full cited Risk analysis of Elecon Engg.Co
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