Elecon Engineering shares tank over 16% after weak Q1 FY25 earnings; check details

The company recorded a 5.3% drop in revenue to ₹392 crore in Q1FY25 compared to ₹414 crore in Q1FY24. Profit after tax (PAT) remained flat at ₹73 crore on a yearly basis, but it fell 30% sequentially during the June quarter.

Operating profit, or earnings before interest, tax, depreciation and amortisation (EBITDA), fell 7.6% to ₹92 crore during the June quarter compared with ₹100 crore a year ago.

The company’s EBITDA margins also fell 60 basis points to 23.5% in Q1FY25 compared to 24.1% in Q1FY24.

In terms of specific segments, Elecon Engineering’s main gear division recorded revenue of ₹334 crore as compared to ₹361 crore in the year-ago quarter. The company said in a stock exchange filing that revenue was impacted on account of weakness in order inflow due to general elections.

“We anticipate demand uptick in balance nine months of FY25 to recoup the revenue loss in Q1 FY25,” it added.

The material handling equipment (MHE) segment posted revenue of ₹58 crore in the June quarter as compared to ₹54 crore a year ago, growing 9%.

The company said that it continues to focus on the business of supplying products and aftermarket business for its MHE segment, which has led to sharp turnaround in the profitability for this segment.

Internationally, Elecon Engineering said that it was on track to achieve its goal of deriving 50% of its revenue from overseas markets by 2029-30.

“In Q1FY25, our international business contributed approximately 34% to our overall consolidated revenues. With strong endorsements from existing OEMs (original equipment manufacturers) and our ongoing brand-building and marketing efforts, we are confident in reaching this ambitious target,” said Prayasvin B Patel, chairman and managing director of Elecon Engineering.

The smallcap stock backed by ace investor Vijay Kedia will undergo a 1:2 split with the record date for the same fixed as July 19. This means, every share of Elecon Engineering will split into two of face value of ₹1 each . The shares held by the existing shareholders will double following the stock split.

The company had announced the stock split in April and the record date was declared earlier this month.

After the results, the Elecon Engineering stock dropped as much as 16.3% on Thursday to hit an intraday low of ₹1,092 apiece on the NSE. However, the stock recouped most of its losses to trade just 1.1% lower at ₹1,291 apiece by 1:45 pm.