Rs 947 crore order book: Vijay Kedia's portfolio stock undergoes 2-for-1 stock split today & Stock recovers 20 per cent post weak Q1FY25 results; details inside!
The stock delivered multibagger returns, with eye-popping gains of 260 in just 1 year, 1,700 per cent in 3 years, and a staggering 6,260 per cent in 5 years.
On Thursday, shares of Elecon Engineering Company Ltd jumped over 20 per cent to an intraday high of Rs 1,318 per share from its opening price of Rs 1,092.05 with a spurt in volume by more than 3 times. At the closing bell, shares of the company were trading at Rs 1,274 per share, down 2.44 per cent from its previous closing of Rs 1,305.80. The stock’s 52-week high is Rs 1,409 and its 52-week low is Rs 692.15.
Elecon Engineering Company Ltd., established in 1960, manufactures industrial equipment with a global presence, specializing in power transmission and material handling equipment. They design, manufacture and sell this equipment across India and internationally. Additionally, Elecon operates a steel and non-ferrous foundry business, giving them a well-rounded approach to industrial equipment production. Notably, they were the first to introduce modular design concepts, case-hardened, and ground gear technology in India, showcasing their commitment to innovation in the power transmission sector.
According to the Quarterly Results, the net sales decreased by 5.3 per cent to Rs 393 crore and net profit increased by 0.5 per cent to Rs 73 crore in Q1FY25 compared to Q1FY24. In its annual results, the net sales increased by 26.7 per cent to Rs 1,937 crore and net profit increased by 49.1 per cent to Rs 356 crore in FY24 compared to FY23.
The Industrial Gear Division saw a revenue decline in Q1FY25, dropping from Rs 361 crore to Rs 334 crore compared to the same period last year. This decrease is attributed to a weakness in order inflow likely due to general elections. However, the company expects demand to pick up in the remaining nine months of FY25, potentially recouping the losses from Q1. In contrast, the MHE Division experienced positive growth with revenue reaching Rs 58 Crore, a 9 per cent increase year-over-year compared to Rs 54 crore. This segment also saw a significant improvement in profitability. EBIT for Q1FY25 reached Rs 15 crore, reflecting a 24 per cent growth YoY.
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EBIT margin also improved from 22.8 per cent to 26 per cent, a jump of approximately 320 basis points. This positive performance is credited to a better product mix and a higher contribution from the aftermarket business. The company's focus on supplying products and supporting the aftermarket segment for MHE has resulted in a sharp turnaround in profitability for this division. They are actively securing new orders for product supply and capitalizing on the growing opportunities within the aftermarket space.
Additionally, The shares of the company are under going stock split of the equity shares today i.e., the existing 1 equity share of the face value of Rs 2 each will be split into 2 equity shares of the face value of Rs 1 each. As of June 2024, two ace investors, Vijay Kedia owns a 1.34 per cent stake and Ajay Upadhyaya owns a 1.78 per cent stake in the company.
The company has a market cap of over Rs 14,000 crore and the company’s order book stands at Rs 947 crore as of June 30, 2024. The stock delivered multibagger returns, with eye-popping gains of 260 in just 1 year, 1,700 per cent in 3 years, and a staggering 6,260 per cent in 5 years. Investors should keep a close eye on this Small-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.
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