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Key Takeaways
- Elecon Engineering's Q3 net profit fell 33% to ₹72 crore despite 4.3% revenue growth.
- Profitability declined due to significant margin pressures and muted growth in the gear business.
- EBITDA decreased 23.2%, with margins contracting sharply to 19.8% from 26.9% year-on-year.
- Material Handling Equipment revenue rose 16.3%, but its margins also faced pressure.
- Strong order book of ₹1,372 crore and management optimism support future revenue and margin recovery.
Elecon Engineering Company Ltd reported a mixed performance for the third quarter ended December, with higher revenue but a sharp decline in profitability due to margin pressures and muted growth in its core gear business.
The company’s net profit fell 33% year-on-year to ₹72 crore, compared with ₹107.5 crore in the same quarter last year. Revenue for the quarter rose 4.3% to ₹551.7 crore, up from ₹528.9 crore a year ago, supported largely by growth in the material handling equipment (MHE) segment.
Operating performance weakened during the quarter, with EBITDA declining 23.2% year-on-year to ₹109.2 crore. EBITDA margin contracted sharply to 19.8%, down from 26.9% in the corresponding period last year, reflecting cost pressures and an unfavourable business mix.
Gear Division Sees Flat Growth
Revenue from the gear division stood at ₹429 crore, marginally higher than ₹423 crore reported in Q3 of the previous year, indicating largely flat growth. The company attributed the subdued performance to delays in order inflows during the first half of FY26, which impacted execution timelines and led to deferred dispatches in line with customer schedules.
While demand from domestic sectors such as power, steel, cement and material handling equipment remained stable, profitability in the segment weakened. EBIT declined to ₹78 crore from ₹118 crore a year ago, with EBIT margin falling to 18.2%. The margin contraction was driven by stagnant revenues, higher employee costs and changes in product mix.
Despite near-term pressures, management indicated that healthy open orders and strong inquiry levels are expected to support improvement in revenues and margins in the coming quarters.
MHE Division Delivers Revenue Growth
The MHE division posted a stronger top-line performance, with revenue rising 16.3% year-on-year to ₹123 crore from ₹105 crore. However, margins in the segment also came under pressure. EBIT stood at ₹25 crore, while EBIT margin declined to 20.2% from 30.9% in the year-ago quarter, largely due to an unfavourable product mix.
The company noted that the MHE business continues to secure steady domestic orders and expects incremental inflows from international markets. A robust order book and inquiry pipeline are expected to support growth momentum ahead.
Order Book Remains Strong
Commenting on the outlook, Prayasvin B Patel, Chairman & Managing Director, said the company recorded order intake of ₹701 crore during the quarter, taking the total order book to ₹1,372 crore as of December 31, 2025. He added that strong visibility across domestic and overseas markets provides confidence in the company’s growth prospects going forward.
Overall, while Elecon Engineering’s near-term profitability remains under pressure, management remains optimistic about a recovery driven by strong orders, execution ramp-up and improved operating leverage in the coming quarters.
