Elecon Engineering Company505700Earnings call transcript

Q2 FY27 earnings call: revenue up 10.5%, credit rating outlook upgraded to AA Positive

Transcript of Elecon's Q2 FY27 earnings call held on 15th October, 2026.

By ScoutQuest · Thu 22 Oct 2026, 4:07 PM IST · 2 min read

INR639 croresRevenue from operations

Gear division revenueINR488 crores

MHE division revenueINR151 crores

Revenue from operations INR639 crores: Gear division revenue INR488 crores, MHE division revenue INR151 crores.

Revenue from operations was INR639 crores, up 10.5% from INR578 crores a year earlier, and up 22.7% from INR521 crores in Q1 FY27.
EBITDA was INR148 crores, up 17.7%, with EBITDA margin expanding 140 basis points to 23.1%.
Profit after tax was INR96 crores, up 9.8%, with a PAT margin of 15.1%.

H1 revenue grew 11.1% on a like-to-like basis; H1 FY26 figures are adjusted for INR25 crores of one-time arbitration settlement and income in the MHE business.
H1 EBITDA was INR257 crores, up 11.4% over adjusted H1 FY26, with margin at 22.2% against 22.1% in the adjusted prior period.
H1 profit after tax was INR167 crores; adjusted PAT rose 6.5%, excluding the after-tax impact of the arbitration income and an INR80 crores net-of-tax unrealised mark-to-market gain on reclassification of investments in the prior period.

The Gear division contributed about 76% of consolidated revenue in Q2 FY27. Revenue was INR488 crores, up 10.6% year-on-year, led by 30.3% growth in overseas markets; domestic demand was described as stable. H1 revenue was INR903 crores, up 13.1%, with power the highest contributing industry.
Gear Q2 EBIT was INR108 crores, with EBIT margin up 290 basis points to 22.1%.
The MHE division revenue was INR151 crores, up 10.4% year-on-year, with execution improving through the quarter. Demand from steel, power, cement, fertilizers and ports was described as supportive.
The MHE division secured orders worth about USD9 million in the first half, which management described as evidence of progress in its international roadmap.

The outlook on the company's long-term credit rating was upgraded from AA Stable to AA Positive, while the short-term rating was reaffirmed at A1+.
The lead banker released the collateral security for both fund-based and non-fund-based working capital limits, removing the hypothecation of movable and immovable properties, including plant and machinery.

Priorities for the second half are to keep building the order pipeline, broaden the market footprint, maintain execution discipline and sustain profitable growth.
The long-term strategy rests on three priorities: extending reach across markets and applications, expanding engineering capabilities, and executing consistently.
Investments in R&D, technology and product development are aimed at customer outcomes such as efficiency, reliability and life-cycle value.
Management flagged an uneven macroeconomic environment and delays in project execution clearances, while stating that Q2 and H1 performance were in line with expectations.

India's industrial outlook was described as constructive, supported by public capital expenditure, infrastructure development and domestic manufacturing, with demand from cement and power and an anticipated threefold expansion in steel production capacity.
Citing industry research estimates, the Indian heavy-duty industrial gearbox market is expected to grow at approximately 8% CAGR through FY '30, driven by capacity creation and brownfield modernisation, with global uncertainty and raw material volatility requiring continued vigilance.

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