Elecon Engineering Company: PAT growth of 50% & revenue growth of 27% in FY24 at a PE of 37
Elecon Engineering Company: PAT growth of 50% & revenue growth of 27% in FY24 at a PE of 37
Momentum in ELECON after delivering sequential QoQ PAT growth in last 5 consecutive quarters seems to be slowing. Management guiding for a tepid FY25 with PAT growth of 17% & revenue growth of 15%
1. Manufacturing of Industrial Gear & Material Handling Equipment (MHE)
elecon.com | NSE: ELECON
One of the largest manufacturers of industrial gears in Asia
India’s largest Industrial gear solution provider
~34% share in Organized Market in India
Revenue Split
2. FY20-24: PAT CAGR of 41% & Revenue CAGR of 16%
YoY margin expansion across the years
3. FY23: PAT up 69% & Revenue up 26%
4. Strong 9M-24: PAT up 49% & Revenue up 24% YoY
5. Strong Q4-24: PAT up 53% & Revenue up 33% YoY
PAT up 15% & Revenue up 19% QoQ
6. Strong FY24: PAT up 50% & Revenue up 27% YoY
Improvement in PAT Margin
7. Business metrics: Strong and improving return ratios
8. Strong outlook: Tepid guidance for FY25
i. FY25: Outlook for 17% APT growth & 15% revenue growth with margin expansion
iii. Orders in place to support revenue guidance
our deliveries are extremely fast. So, the time that we take to process and execute is very fast. So, you see a big consumption that takes place.
9. PAT growth of 50% & Revenue growth of 27% in FY-24 at a PE of 37
10. So Wait and Watch
If I hold the stock then one may review holding on to ELECON
ELECON has delivered the strongest revenue & PAT in FY24
ELECON is in the middle of a strong run and has delivered sequential QoQ growth in PAT in the last five consecutive quarters starting from Q4-23
The guidance for FY25 looks tepid, unless one feels its a conservative guidance by the management then one needs to review their position in ELECON.
11. Join the ride
If I am looking to enter ELECON then
ELECON has delivered PAT growth of 50% and revenue growth of 27% in FY24 at a PE of 37 which makes the valuations fairly valued in the short term.
With a FY25 revenue growth outlook of 15% and PAT growth of 17% at a PE of 37 makes the valuations expensive from a FY25 perspective.
Previous coverage of ELECON
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