Broker’s call: Elecon Engineering (Buy)

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SENSEX 73,709.69

 -143.21

NIFTY 22,811.35

 -77.60

NIFTY 22,811.35

 -77.60

CRUDEOIL 9,316.00

+ 5.00

CRUDEOIL 9,316.00

+ 5.00

GOLD 146,042.00

 -477.00

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Keynote Capitals

By KS Badri Narayanan

Updated - October 21, 2026 at 06:21 PM.

During the quarter, the order book grew by 33 per cent to ₹1,640 crore while order intake increased by about 8 per cent to ₹750 crore

Target: ₹525

CMP: ₹433.70

Elecon Engineering Company Ltd (EECL) reported a revenue growth of about 11 per cent on a y-o-y basis in Q2-FY27, supported by both divisions. The Gear division contributed around 76 per cent of revenue and grew by 11 per cent, backed by strong overseas demand. The MHE division contributed around 24 per cent and grew by about 10 per cent following the execution of two projects delayed from Q1-FY27 and faster customer approvals.

During the quarter, the order book grew by 33 per cent to ₹1,640 crore while order intake increased by about 8 per cent to ₹750 crore. Looking ahead, management expects execution to improve after Diwali as project clearances pick up. It expects around 15 per cent consolidated revenue growth in H2-FY27 while maintaining EBITDA margins at least at FY26 levels.

Q2-FY27 revenue growth was supported by both divisions, with overseas business continuing to drive growth. Profitability improved on the back of price hikes, a better Gear product mix and higher-margin export orders. While MHE revenue recovered with the execution of delayed projects, its margins remained under pressure. The healthy order book and improving project clearances provide better revenue visibility for H2FY27.

However, considering the moderation in growth expectations, we have reduced our FY28E P/E multiple by about 15 per cent to 26x. Accordingly, we revise our estimates and assign a Buy rating on EECL, with a target price of ₹525, based on FY28E EPS.

Published on October 21, 2026

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