In the concall,management is confident of achieving 2000 cr. and sustaining margins, which is great. However this fact is well known, current war or any other situation which can impact the 2000 cr. topline or margins can play a spoil sport. Further it is unclear on the growth levers for next year or no big catalyst which can propel earnings. Thoughts welcome
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My question to forum members here, is there any thread or any analysis done on elecon engineering vs pitti engineering?
Management recently have given a guidance of 24 % growth for next 3 years . Plan to double topline in next 4 years with same margin
Expect to spend 100 Cr every year for next 3 years towards capex.
Focus is to grow export .
Positive on growth prospect for next 1-2 years.
Disc - Invested since sometime
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@saikathalder did you find any thread? Seems interesting comparison. Pitti engg. has lower PBV and other revenue streams as well
Check “Pragnesh portfolio”. He has done some analysis on Pitti.
with the latest quarter results in, what is your view for Elecon ahead?
Margins improved considerably, but QoQ Revenue flat which might make 2000 crore FY 24 Revenue Guidance tricky, and further asks how much can we trust the mgmt on 10,000 crore FY 30 Revenue guidance.
if you see sept and dec 22, revenue is flat. March in general there is a 10 - 15% jump.
In the current year, they have done 1373 Cr. March had 474 cr. Assuming a 12.5% revenue jump in March, total year becomes close to 1906 cr. In my mind, they may marginally miss the 2000 mark - they will not be way off.
Correct. Elecon may very well surprise with the Q4 numbers and results.
Solid company and good future prospects.
Strictly a portfolio company and not meant for trading.
Invested and happy.
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Management has been very confident about 2000 cr number . Q4 could generally has been good as seen from past quarter. They need to do 600 cr in Q4 with margin expansion it can translate to 100 cr + NP and 9.5-10 EPS for a quarter.
Will update post management commentery.
Elecon has surprised since investing since 2021
Will ride the cycle as we may be not be at fag end of capital goods cycle. ( view )
Invested : No recent transaction . Views are biased .
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Was anyone on today’s call?
Please share notes, if any. I missed it.
Q3 FY24 earnings call summary for Elecon -
Gears division - Steel, cement, sugar industry continues to do good.
Signed 4 OEM’s (from packaging, steel and plastic sector) this qtr. Expected 6M Euros potential business opportunity from total 10 OEM’s to start with that have been signed so far. Commercial production for these OEM’s will start from Q3’25.
MHE division - Won orders for 173Cr from steel and cement industry. Seeing uptick in profitability.
Management is reasonably confident of meeting 2000Cr top line revenue for FY’24 inspite of challenges currently facing related to steel price reduction, geo political issues and inflation.
Majority of the revenue comes in Q4 for engineering companies as said by the management. Also cycles are pretty short for their products.
EBITDA guidance for full year to be 24% +.
FY’25 guidance will be given during Q4 FY’24 call.
Total Open orders 791Cr till Dec 31st.
Capex on target. 100Cr done this year. Expecting to do 100Cr each in next 2 years.
Please add if I have missed or interpreted incorrectly from the call.
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Is there any particular reason by the share price is down approx. 25% from high, apart from general correction in mid/small cap stocks? EPS growth has been consistent and mgmt guidance for FY 2030 of 10k crore sales at 30% CAGR contradict the price movement. I could not notice any major fundamental change - am I missing smth here?
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Great results + Dividend + Stock split = Happy investors
https://www.bseindia.com/xml-data/corpfiling/AttachLive/90c911b1-0538-49bf-9a9a-2424afa5ecc7.pdf
https://www.bseindia.com/xml-data/corpfiling/AttachLive/67a8bdec-0b10-4efd-9d87-a48013fe8c22.pdf
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Today it has broken out from recent consolidation at very high volume…How you look at its current valuation, PE etc? Is it attractive for fresh entry?
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Right, Well I have been holding the stock from around the 500-550 range when the gap between the stock PE and Industry PE was identical to what it is now since then the stock price has gone up by 125% and PE went up by only 35% which is why I still hold it with comfort, PE re-rating happened across the sector due to strong industry tailwinds and as per my assessment the tailwinds are here to stay and for a good long time…so yeah (not a recommendation) give or take a few % it definitely looks lucrative to me and the stock split is the icing on the cake.
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Q4 Fy 2024 concall highlights
Elecon Q4 ended on a good note with sales for year @ 1937 cr and NP @ 356 cr
Next year conservatively management guidance of 15% revenue growth .
Open order of 796 cr 10% higher . Cycle of order execution has improved .
OEM signed up 11 . Expect execution of OEM orders in Q3/Q4 next year.
My personal views - Overall company seems to be doing fairly well can grow in double digit for 2 years with some improvement in margin due to scale of buisness .
Disc - Invested since sometime
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But the guidance for fy2025 has reduced to 15%
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Any guidance on further margin expansion ? If not then 15% sales growth guidance is anything but impressive given the current PE of 35+
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From past we have seen management has been conservative as they have burned their hands in last cycle with EPC buisness.
Last year also management delivered better margins than guided. ( no guidance from them for higher margin )
I prefer companies that underpromise and overdeliver rather overpromise and than fall flat.
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