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Buy at : Near by 730
Stop Loss: 690
Target : 800
Elecon Engineering Company Ltd: Fundamental Analysis and Latest News
Overview Elecon Engineering Company Ltd (NSE: ELECON) is a leading manufacturer of industrial gears and material handling equipment, headquartered in Gujarat, India. The company has a robust market presence and serves various sectors, including power, cement, mining, and steel. Elecon’s diverse product portfolio and global reach make it a key player in its industry.
Fundamental Analysis
Market Cap and Valuation: As of October 2024, Elecon Engineering has a market capitalization of ₹15,610 crore. The stock is trading with a P/E ratio of 43.86 based on trailing twelve-month earnings per share (EPS) of ₹15.86. This suggests that investors are optimistic about the company's future growth, as the P/E ratio is relatively high compared to the industry average.
Profitability: Elecon has shown impressive earnings growth, with its FY 2023 EPS standing at ₹21.17, a notable increase from ₹12.52 in FY 2022. This growth highlights the company’s improving profitability.
Additionally, its return on capital employed (ROCE) has been impressive, consistently improving, which indicates effective capital allocation.Financial Health: The company has been reducing its debt over the years. In FY 2024, Elecon’s total debt stood at ₹43.48 crore, a significant decrease from ₹116.61 crore in FY 2022. This reduction in leverage strengthens the company’s balance sheet and positions it well for future expansions.
Dividend: Elecon is expected to declare an interim dividend at its board meeting on October 18, 2024, with the record date set for October 28, 2024. In June 2024, the company declared a dividend of ₹1.40 per share, indicating a focus on returning value to shareholders.
Revenue and Margins: The company has maintained healthy profit margins, supported by consistent revenue growth. For the latest fiscal year, Elecon recorded robust revenue figures, benefiting from strong demand in the industrial equipment sector.
Latest News (October 2024)
- Upcoming Board Meeting: On October 18, 2024, Elecon’s board of directors will meet to discuss the financial results for Q2 FY2025, along with a possible declaration of an interim dividend. This is a key event for investors to watch, as it may provide insights into the company’s performance in the current fiscal year.
- Stock Performance: Over the last year, Elecon’s stock has risen by 66.11%, significantly outperforming benchmark indices like the NIFTY, which grew by 27.22%. This sharp increase reflects strong investor confidence and the company’s promising growth prospects.
Conclusion Elecon Engineering continues to demonstrate solid financial performance and growth prospects. Its focus on reducing debt, improving profitability, and rewarding shareholders through dividends makes it a compelling investment choice. With upcoming financial results and potential dividend declarations, the stock remains an attractive option for investors looking at the industrial equipment sector.
For further insights and updates, monitoring the Q2 results announcement on October 18, 2024, will be essential.
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