Elecon Engg.Co Q2 FY27 Results (NSE: ELECON)
Signal: Margin expansion
The read
The quarter marks a margin recovery after the 21% OPM reported in Q1FY27: consolidated revenue accelerated to +10.5% YoY, EBITDA margin improved to approximately 23.1% from 21.7%, and PAT rose 9.8%, but the recovery is concentrated in Transmission Equipment while MHE segment profit declined 13.3% and finance costs rose 81.5%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹638.94 Cr | +10.5% | +22.7% |
| Net profit | ₹96.35 Cr | +9.8% | |
| EPS | ₹4.29 | +9.7% | |
| EBIT margin | 23.1% |
P&L walk
Revenue increased to INR 63,894 lakh, +10.5% YoY and +22.7% QoQ; gross margin expanded to 56.3% from 50.5% as material consumption plus inventory change fell to 43.7% of revenue from 49.5%, while EBITDA margin improved to 23.1% from 21.7% and PAT rose 9.8% to INR 9,635 lakh.
Segments
Transmission Equipment drove the consolidated improvement: segment revenue rose 10.6% YoY to INR 48,769 lakh and segment result rose 27.2% to INR 10,792 lakh, while MHE revenue grew 8.6% but segment result fell 13.3% to INR 3,465 lakh.
Key positives
- Consolidated revenue reached INR 63,894 lakh, +10.5% YoY and +22.7% QoQ, accelerating from +6.1% YoY in Q1FY27.
- Transmission Equipment segment result rose 27.2% YoY to INR 10,792 lakh, materially outpacing segment revenue growth of 10.6%.
- Gross margin expanded 675bps YoY to 56.3% as materials consumed plus inventory change fell to 43.7% of revenue from 49.5%.
- EBITDA grew approximately 17.7% YoY versus revenue growth of 10.5%, a 7.2 percentage-point growth gap, while EBITDA margin expanded approximately 140bps to 23.1%.
- The group remained net-cash positive at approximately INR 24,110 lakh after investing in PPE and CWIP.
Key concerns
- MHE segment result declined 13.3% YoY to INR 3,465 lakh despite 8.6% revenue growth, keeping division-level margin pressure unresolved.
- Finance costs rose 81.5% YoY to INR 1,033 lakh, significantly faster than revenue growth.
- Standalone PAT declined 5.2% YoY to INR 7,475 lakh, showing that the consolidated improvement is more dependent on group subsidiaries and the Transmission Equipment business.
- Depreciation increased 28.9% YoY to INR 3,260 lakh, faster than revenue growth, raising the execution requirement for the expanding asset base.
Research and educational content only. Not investment advice.