Elecon Engineering Company pioneered the manufacture ofmaterial handling equipment in India. In the last four decades, it has designedand implemented several landmark projects in India and abroad. Its productrange and services includes design, engineering, manufacture, supply anderection. Through its equipment it has made its presence felt in core sectorslike fertilizer, cement, coal, power generation, chemicals, steel plants andport mechanisation. Its business also includes providing customised gearboxesfor steel mills, high-speed turbines, sugar mills, marine vessels, plasticextrusions, antenna drives as well as for satellites related to the Indian space programme.
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Financials
The in the financial year ending March 2007, Elecon hasachieved net sales of Rs 723 crore against Rs 442 crore in the previous year,registering an outstanding growth of 63 per cent. The profit after tax for theyear is Rs 54.90 crore, up 97 per cent. In the last quarter of FY07 itregistered sales growth of 52 per cent while operating profit and net profitswent up by 60.22 and 69.34 per cents respectively. The company has also managedto improve its net profit margins to 6.52 per cent compared to 5.85 per cent inthe same quarter last year. The company’s board has recommended a bonus of 2:1.
Investment rationale
The robust investment capex lined up by Indian firms acrossindustries will increase demand for the company’s products. Its materialhandling and power solution segments are expected to see huge inflow ofinvestments. Elecon recently received a
Rs 57.70-crore mechanical equipment order from Bharat HeavyElectricals Ltd. It will undertake design, engineering, civil and structuralwork, erection and commissioning of mechanical equipment for lignite stonehandling system of Surat Lignite Power Plant of Gujarat Industrial PowerCompany. In April, the company bagged an NTPC contract worth Rs 229 crore forsupply and installation at a coal handling plant. The stock has gained over 145per cent in last one year and over 12,000 per cent in the last 5 years. Webelieve that the company will continue to attract investors in future given itsstrong financial performance and healthy order book.
(Source: Internet)
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