Profit before tax declined 5.66% to Rs 110.54 crore in Q2 FY25 from Rs 117.17 core in Q2 FY24.

EBITDA dropped 5.4% to Rs 112 crore in the quarter ended 30 September 2024 as compared with Rs 119 crore posted in same quarter last year. EBITDA margin contracted to 22.1% in Q2 FY25 from 24.5% in Q2 FY24.

In Q2 FY25, revenue from Gear division fell 5.9% YoY to Rs 398 crore, impacted on account of delay in receipt of order from customers resulted in delay in execution within Q2FY25.

MHE division revenue jumped 77.8% YoY to Rs 110 crore in Q2 FY25, the company continues to focus on the business of supplying products & aftermarket business for its MHE segment which has led to sharp turnaround in the profitability for this segment. The company is consistently securing new orders for product supply and capitalizing on growing opportunities in the aftermarket business.

Prayasvin B. Patel, chairman & managing director of Elecon Engineering, said, “In Q2FY25, our Material Handling Equipment (MHE) division saw a remarkable 77.8% year-on-year revenue growth, with EBIT margins improving by around 549 basis points to 26.5%. We expect continued growth in this segment, driven by infrastructure development, government initiatives, and an uptick in capital expenditure.

Our Gear division, however, experienced a 5.9% decline in revenue due to delay in order inflows. We see this as a temporary decline and expect to recover in the following quarters, remaining optimistic about overall revenue growth for FY25. Margins in the Gear division were affected by higher freight costs and changes in the product mix. Internationally, we are progressing toward our target of generating 50% of our revenue from overseas markets by FY30.

In Q2FY25, international business contributed approximately 24% of our total consolidated revenue. With strong support from OEMs and ongoing brand-building efforts, we are confident in reaching this goal. Through strategic alliances in global markets, continued investment in R&D and product development, and a focus on the MHE segment.”

Meanwhile the company’s board has declared an interim dividend of Re 0.50 per share for FY25. The record date for the dividend shall be Monday, 28 October 2024. The said dividend will be paid on or after Tuesday, 12 November 2024.

Elecon Engineering Company (ELECON) is one of the largest manufacturers of industrial gears and material handling equipment with seven decades of experience and expertise in Asia.