Results     21-Jul-24
Analysis
Elecon Engineering Company
Net up marginal 1% thanks to higher profit of share from associate & lower tax incidence
Consolidated net sales (including other operating income) of Elecon Engineering Company for the quarter ended Jun 2024 has declined 5.30% to Rs 392.36 crore.  

Operating profit margin has declined from 24.13% to 23.54%, leading to 7.59% decline in operating profit to Rs 92.38 crore.  Raw material cost as a % of total sales (net of stock adjustments) decreased from 45.48% to 42.20%.   Employee cost increased from 10.73% to 11.78%.   Other expenses rose from 20.43% to 22.88%.   Other direct service cost rose from 8.25% to 8.85%.   

Other income rose 69.76% to Rs 14.43 crore.  PBIDT fell 1.53% to Rs 106.81 crore.  Provision for interest fell 7.29% to Rs 2.29 crore.  

PBDT fell 1.40% to Rs 104.52 crore.  Provision for depreciation rose 3.30% to Rs 12.83 crore.  

Profit before tax down 2.02% to Rs 91.69 crore.  Share of profit/loss was 176.40% higher at Rs 2.46 crore.  Provision for tax was expense of Rs 20.79 crore, compared to Rs 21.51 crore.  Effective tax rate was 22.08% compared to 22.77%.

Minority interest was nil in both the periods.  Net profit attributable to owners of the company increased 0.55% to Rs 73.36 crore.  

Sales of Material Handling Equipment segment has gone up 8.68% to Rs 58.25 crore (accounting for 14.85% of total sales).  Sales of Transmission Equipment segment has gone down 7.38% to Rs 334.11 crore (accounting for 85.15% of total sales).  

Profit before interest, tax and other unallocable items (PBIT) has slumped 7.02% to Rs 93.73 crore.  PBIT of Material Handling Equipment segment rose 23.93% to Rs 15.12 crore (accounting for 16.13% of total PBIT).  PBIT of Transmission Equipment segment fell 11.29% to Rs 78.61 crore (accounting for 83.87% of total PBIT).  

PBIT margin of Material Handling Equipment segment rose from 22.76% to 25.96%.  PBIT margin of Transmission Equipment segment fell from 24.56% to 23.53%.  Overall PBIT margin fell from 24.33% to 23.89%.  





Full year results analysis.

Net sales (including other operating income) of Elecon Engineering Company has increased 26.66% to Rs 1937.42 crore.  Sales of Material Handling Equipment segment has gone up 35.49% to Rs 292.99 crore (accounting for 15.12% of total sales).  Sales of Transmission Equipment segment has gone up 25.20% to Rs 1,644.43 crore (accounting for 84.88% of total sales).  

Profit before interest, tax and other unallocable items (PBIT) has jumped 52.27% to Rs 488.80 crore.  PBIT of Material Handling Equipment segment rose 109.72% to Rs 68.37 crore (accounting for 13.99% of total PBIT).  PBIT of Transmission Equipment segment rose 45.78% to Rs 420.43 crore (accounting for 86.01% of total PBIT).  

PBIT margin of Material Handling Equipment segment rose from 15.08% to 23.34%.  PBIT margin of Transmission Equipment segment rose from 21.96% to 25.57%.  Overall PBIT margin rose from 20.99% to 25.23%.  

Operating profit margin has jumped from 22.15% to 24.49%, leading to 40.01% rise in operating profit to Rs 474.47 crore.  Raw material cost as a % of total sales (net of stock adjustments) decreased from 46.87% to 43.86%.   Employee cost increased from 9.76% to 9.84%.   Other expenses rose from 21.29% to 21.53%.   Other direct service cost rose from 7.91% to 8.15%.   

Other income rose 119.64% to Rs 44.06 crore.  PBIDT rose 44.46% to Rs 518.53 crore.  Provision for interest fell 35.09% to Rs 8.64 crore.  Loan funds rose to Rs 70.46 crore as of 31 March 2024 from Rs 51.58 crore as of 31 March 2023.  Inventories declined from Rs 278.80 crore as of 31 March 2023 to Rs 229.74 crore as of 31 March 2024.  Sundry debtors were higher at Rs 445.10 crore as of 31 March 2024 compared to Rs 345.77 crore as of 31 March 2023.  Cash and bank balance rose to Rs 263.31 crore as of 31 March 2024 from Rs 210.37 crore as of 31 March 2023.  Investments rose to Rs 286.41 crore as of 31 March 2024 from Rs 76.67 crore as of 31 March 2023 .  

PBDT rose 47.52% to Rs 509.89 crore.  Provision for depreciation rose 3.83% to Rs 50.92 crore.  Fixed assets declined from Rs 651.29 crore as of 31 March 2023 to Rs 647.74 crore as of 31 March 2024.  Intangible assets increased from Rs 102.82 crore to Rs 121.72 crore.  

Profit before tax grew 54.75% to Rs 458.97 crore.  Share of profit/loss was 97.23% higher at Rs 6.41 crore.  Provision for tax was expense of Rs 109.8 crore, compared to Rs 62.33 crore.  Effective tax rate was 23.59% compared to 20.79%.

Minority interest was nil in both the periods.  Net profit attributable to owners of the company increased 49.71% to Rs 355.58 crore.  

Equity capital stood at Rs 22.44 crore as of 31 March 2024 to Rs 22.44 crore as of 31 March 2023.  Per share face Value remained same at Rs 2.00.  

Order book

Order intake in Q1FY25  stood higher by 9.7%YoY to Rs 545 crore [Gears Rs 396 crore, MHE Rs 149 crore] compared to Rs 497 crore [Gears Rs 446 crore, MHE Rs 51 crore].

Open order book as end of Jun 31, 2024 stood at Rs 947 crore [Gears Rs 598 crore, MHE Rs 349 crore] compared to Rs 793 crore [Gears Rs 655 crore, MHE Rs 138 crore]

Others


Promoters’ stake was 59.27% as of 30 June 2024, compared to 59.27% as of 31 March 2024  and  compared to 59.29% as of 31 March 2023 .

Cash flow from operating activities increased to Rs 364.81 crore for year ended March 2024 from Rs 309.12 crore for year ended March 2023.  Cash flow used in acquiring fixed assets during the year ended March 2024 stood at Rs 31.49 crore, compared to Rs 47.06 crore during the year ended March 2023.  



Management Comments :
Commenting on the results, Shri Prayasvin B. Patel, Chairman & Managing Director of Elecon Engineering Co. Ltd. Said, For Q1FY25, Elecon reported consolidated revenues from operations of Rs 392 Crs, achieving an EBITDA margin of 23.5%. The company’s unwavering focus on profitability has been instrumental in its progress. Elecon delivered a PAT margin of 18.7% in Q1FY25, reflecting a Y-o-Y growth of ~ 110 bps and a Q-o-Q increase of around 30 bps. We continue to remain optimistic of new order wins across sectors and across both our division – Gear & MHE. We continue to lead the domestic market in the Gear Segment, attributed to our stateof-the-art technology and our ability to provide customized solutions with the shortest lead times. This strategic advantage sets us apart from our competitors. For the quarter ending June 2024, our revenue from operations in the Gear Division was Rs 334 crores, compared to Rs 361 crores in Q1FY24. This decrease is primarily due to slower order inflows during the last quarter, influenced by the general elections, which impacted both private and public capital expenditure. However, we anticipate that post-election stability and government support for infrastructure development will have a positive impact, and we remain committed to our annual guidance. Internationally, we are on track to achieve our goal of deriving 50% of our revenue from overseas markets by FY30. In Q1FY25, our international business contributed approximately 34% to our overall consolidated revenues. With strong endorsements from existing OEMs and our ongoing brand-building and marketing efforts, we are confident in reaching this ambitious target. The MHE segment continues to enhance its profitability. In Q1FY25, the EBIT margin increased by approximately 320 basis points, reaching 26.0%, driven by an improved product mix and leveraging opportunities in the aftermarket service segment. We remain optimistic about the segment’s continued growth, supported by ongoing government initiatives in infrastructure and manufacturing. With ongoing strategic alliances in the overseas market, continued investments in R&D and product development, and a strategic focus on the MHE segment, we are confident in outperforming the industry and achieving our organizational aspirations.

Elecon Engineering Company : Consolidated Results
 Quarter endedYear ended
Particulars202406202306Var.(%)202403202303Var.(%)
Net Sales (including other operating income)392.36414.34-5.301,937.421,529.6826.66
OPM (%)23.5424.13-58 bps24.4922.15234 bps
OP92.3899.97-7.59474.47338.8840.01
Other Inc.14.438.5069.7644.0620.06119.64
PBIDT106.81108.47-1.53518.53358.9444.46
Interest2.292.47-7.298.6413.31-35.09
PBDT104.52106.00-1.40509.89345.6347.52
Depreciation12.8312.423.3050.9249.043.83
PBT91.6993.58-2.02458.97296.5954.75
Share of Profit/(Loss) from Associates2.460.89176.406.413.2597.23
PBT before EO94.1594.47-0.34465.38299.8455.21
EO Income00-00-
PBT after EO94.1594.47-0.34465.38299.8455.21
Taxation20.7921.51-3.35109.862.3376.16
PAT73.3672.960.55355.58237.5149.71
Minority Interest (MI)00-00-
Net profit73.3672.960.55355.58237.5149.71
P/(L) from discontinued operations net of tax00-00-
Net profit after discontinued operations73.3672.960.55355.58237.5149.71
EPS (Rs)*3.273.250.5515.8510.5849.71
* EPS is on current equity of Rs 22.44 crore, Face value of Rs 1, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database


Elecon Engineering Company : Consolidated Segment Results
 Quarter endedYear ended
% of (Total)202406202306Var.(%)% of (Total)202403202303Var.(%)
Sales
Material Handling Equipment14.8558.2553.608.6815.12292.99216.2535.49
Transmission Equipment85.15334.11360.74-7.3884.881,644.431,313.4325.20
Others0.000.000.00-
Total Reported Sales100.00392.36414.34-5.30100.001,937.421,529.6826.66
Less: Inter segment revenues 0.000.00- 0.000.00-
Net Sales100.00392.36414.34-5.30100.001,937.421,529.6826.66
PBIT
Material Handling Equipment16.1315.1212.2023.9313.9968.3732.60109.72
Transmission Equipment83.8778.6188.61-11.2986.01420.43288.4145.78
Others0.000.000.00-
Total PBIT100.0093.73100.81-7.02100.00488.80321.0152.27
Less : Interest2.292.47-7.298.6413.32-35.14
Add: Other un-allcoable2.71-3.87LP-14.78-7.85-88.28
PBIT Margin(%)
Material Handling Equipment 25.9622.76319.59 23.3415.08826.01
Transmission Equipment 23.5324.56-103.52 25.5721.96360.84
Others 0.000.000.00
PBT100.0094.1594.47-0.34100.00465.38299.8455.21
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