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Elecon Engineering Q2 FY27: ₹96 Cr Profit & Strong Order Book Visibility

Investment Analysis | Capital Goods & Engineering | October 14, 2026

Investment Thesis

Elecon Engineering is a leading manufacturer of industrial gearboxes, gears, and project engineering services with a strong focus on renewable energy, mining, cement, and sugar industries. Q2 FY27 demonstrates resilience with 9% profit growth to ₹96 Crore, expanding order book visibility, and strong dividend coverage. The company is well-positioned for infrastructure capex cycle and renewable energy transition in India.

Rating: ⭐⭐⭐⭐ HOLD/ACCUMULATE | Price Target: ₹3,200-3,500 | Upside: +8-18%

Q2 FY27 Performance Summary

MetricQ2 FY27Q2 FY26Growth Total Income₹368 Cr₹333 Cr+10.5% Net Profit₹96 Cr*₹88 Cr+9.1% EBITDA₹66 Cr₹50 Cr+32% EBITDA Margin18%15%+300 bps EPS₹16.5₹15.1+9.3%

* Includes exceptional gain from land sale; core PAT ~₹60 Cr shows +52% growth

Key Investment Drivers

  • Strong Order Book: ₹2,100+ Cr with 6-8 quarters of visibility
  • Capacity Expansion: Pune facility expansion adding 20% production capacity by FY27 end
  • Renewable Energy Growth: Wind turbine gearbox orders growing 25%+ YoY
  • Dividend Consistency: ₹5-6 per share FY27 guidance; interim ₹2 per share already declared
  • Strong Balance Sheet: Minimal debt (0.15x D/E), cash ₹180+ Cr, RoE 28%+

FY27-FY28 Growth Catalysts

  • Order Book Conversion: ₹2,100 Cr → ₹550+ Cr quarterly revenue by Q4 FY27
  • Capacity Commissioning (Q4 FY27-Q1 FY28): 20% production increase enables 30%+ growth
  • Renewable Energy Wins: Wind turbine manufacturers accelerating orders
  • FY27 Guidance Beat (Feb 2027): ₹1,500+ Cr revenue validates execution

Financial Forecast

MetricFY27E CoreFY28EGrowth Revenue₹1,450 Cr₹1,850 Cr+28% Net Profit₹280 Cr₹420 Cr+50% EPS₹48₹72+50%

Valuation & Recommendation

Current Price: ₹2,950 | Price Target: ₹3,350 | Upside: +13% | Rating: HOLD/ACCUMULATE

  • P/E (FY27E): 17.5x (reasonable for 20% growth)
  • P/E (FY28E): 9.2x (attractive for 30% growth)
  • Dividend Yield: 2.0% with growth to 2.5%+
  • Best For: Value investors, dividend seekers, infrastructure/renewable energy plays

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