Below is a structured extraction and summary of all relevant and actionable financial information from Elecon Engineering Company Limited’s results filing dated 10th October 2025, covering Q2 and H1 FY26 (quarter ended 30 Sep 2025), including standalone and consolidated results, auditor’s notes, segment details, management commentary, and corporate actions.
1. Auditor’s Note
- Standalone and Consolidated Results:
The statutory auditors (CNK & Associates LLP) have issued unmodified review reports on both standalone and consolidated unaudited financial results for Q2 and H1 FY26. - No qualifications, concerns, or issues were raised in the auditor’s review reports.
- The review was conducted under SRE 2410 (Review of Interim Financial Information).
- The auditor explicitly states nothing has come to their attention indicating material misstatements or non-compliance with applicable accounting standards and SEBI regulations.
Conclusion: Auditor’s notes are clean with no qualifications.
2. Financial Performance
A. Standalone Financials (INR Lakhs)
| Particulars | Q2 FY26 (30 Sep 2025) | Q1 FY26 (30 Jun 2025) | Q2 FY25 (30 Sep 2024) | H1 FY26 (Apr-Sep 2025) | H1 FY25 (Apr-Sep 2024) | FY25 (Apr 24-Mar 25) |
|---|---|---|---|---|---|---|
| Revenue from operations | 49,618 | 41,008 | 41,864 | 90,626 | 71,206 | 1,87,112 |
| Other income | 1,831 | 2,488 | 1,051 | 4,319 | 2,361 | 5,287 |
| Total Income | 51,449 | 43,496 | 42,915 | 94,945 | 73,567 | 1,92,399 |
| Total Expenses | 41,074 | 31,506 | 33,984 | 72,580 | 57,249 | 1,46,804 |
| Profit before exceptional items & tax | 10,375 | 11,990 | 8,931 | 22,365 | 16,318 | 45,595 |
| Exceptional items (gain) | 0 | 14,942 | 0 | 14,942 | 0 | 0 |
| Profit before tax | 10,375 | 26,932 | 8,931 | 37,307 | 16,318 | 45,595 |
| Tax expenses (Current + Deferred) | 2,486 | 3,040 | 2,221 | 5,526 | 4,098 | 11,592 |
| Net Profit after tax | 7,889 | 23,892 | 6,710 | 31,781 | 12,220 | 34,003 |
| Other Comprehensive Income (net) | (7,071) | 5,973 | (93) | (1,098) | (128) | (61) |
| Total Comprehensive Income | 818 | 29,865 | 6,617 | 30,683 | 12,092 | 33,942 |
| EPS (Basic & Diluted, INR) | 3.52 | 10.65 | 2.99 | 14.16 | 5.45 | 15.15 |
Margins (approximate):
- Q2 FY26 Net Profit Margin = 7,889 / 51,449 ≈ 15.3%
- H1 FY26 Net Profit Margin = 31,781 / 94,945 ≈ 33.5% (boosted by exceptional gain)
- Excluding exceptional items, PAT margin is lower.
B. Consolidated Financials (INR Lakhs)
| Particulars | Q2 FY26 (30 Sep 2025) | Q1 FY26 (30 Jun 2025) | Q2 FY25 (30 Sep 2024) | H1 FY26 (Apr-Sep 2025) | H1 FY25 (Apr-Sep 2024) | FY25 (Apr 24-Mar 25) |
|---|---|---|---|---|---|---|
| Revenue from operations | 57,813 | 49,057 | 50,814 | 1,06,870 | 90,050 | 2,22,696 |
| Other income | 1,832 | 2,643 | 1,139 | 4,475 | 2,582 | 6,005 |
| Total Income | 59,645 | 51,700 | 51,953 | 1,11,345 | 92,632 | 2,28,701 |
| Total Expenses | 48,346 | 39,096 | 41,116 | 87,442 | 72,626 | 1,75,817 |
| Profit before share of associate, exceptional item & tax | 11,299 | 12,604 | 10,837 | 23,903 | 20,006 | 52,884 |
| Share in profit of associate | 0 | 61 | 217 | 61 | 463 | 813 |
| Profit before exceptional item & tax | 11,299 | 12,665 | 11,054 | 23,964 | 20,469 | 53,697 |
| Exceptional items (gain) | 0 | 8,047 | 0 | 8,047 | 0 | 0 |
| Profit before tax | 11,299 | 20,712 | 11,054 | 32,011 | 20,469 | 53,697 |
| Tax expenses (Current + Deferred) | 2,527 | 3,168 | 2,282 | 5,695 | 4,361 | 12,187 |
| Net Profit after tax | 8,772 | 17,544 | 8,772 | 26,316 | 16,108 | 41,510 |
| Other Comprehensive Income (net) | (6,919) | 7,510 | 1,268 | 1,591 | 1,174 | 1,321 |
| Total Comprehensive Income | 2,853 | 25,054 | 10,040 | 27,907 | 17,282 | 42,831 |
| EPS (Basic & Diluted, INR) | 3.91 | 7.82 | 3.91 | 11.73 | 7.18 | 18.50 |
Margins (approximate):
- Q2 FY26 PAT Margin = 8,772 / 59,645 ≈ 14.7%
- H1 FY26 PAT Margin = 26,316 / 1,11,345 ≈ 23.6%
- EBITDA for Q2 FY26: Rs 126 Crs (from investor release), EBITDA margin ~21.7%
- Revenue growth Q2 FY26 vs Q2 FY25: +13.8%
- PAT growth Q2 FY26 vs Q2 FY25: Flat (-2.9%)
3. Detailed Notes / Management Commentary
-
Interim Dividend: Declared Re 0.50 per equity share (50% of face value Rs 1), record date 16 Oct 2025, payable on or after 3 Nov 2025.
-
Exceptional Items:
- Gain of INR 14,942 lakhs (net of tax) in Q1 FY26 due to reclassification of Eimco Elecon (India) Ltd. from Associate to financial asset, with unrealized mark-to-market gains credited to P&L.
- Subsequent unrealized gains/losses included in Other Comprehensive Income.
-
Arbitration Settlement Income:
- Revenue and other income in Q1 FY26 include INR 2,529 lakhs and INR 975 lakhs respectively from settlement of arbitration claims in Material Handling Equipment (MHE) division.
-
Segment Performance:
- Transmission Equipment (Gear Division) revenue grew 8.9% YoY in Q2 FY26; EBIT margin at 19.2%.
- Material Handling Equipment (MHE) division revenue grew 33.0% YoY in Q2 FY26; EBIT margin improved to 25.7%.
- MHE division expected to maintain steady momentum with focus on product supply and aftermarket services.
-
Geographical Mix:
- Domestic revenue grew 18.3% YoY in Q2 FY26, forming 79% of total revenue.
- Overseas revenue flat (-0.4%) YoY, 21% of total revenue.
-
Order Intake:
- Q2 FY26 order intake at Rs 688 Cr, up 28% YoY.
- Strong order book and outlook support confidence in meeting full-year guidance.
-
Strategic Focus:
- Targeting 50% of consolidated revenue from international markets by FY30.
- Investments in R&D, innovation, and manufacturing capabilities continue.
- Strengthening global OEM relationships and brand building.
-
Accounting Policy Changes:
- Reclassification of Eimco Elecon (India) Ltd. as financial asset per Ind AS 109.
- Use of one-time irrevocable option under Ind AS for unrealized gains/losses treatment.
4. Segment Information
Consolidated Segment Revenue & Profit (INR Lakhs)
| Segment | Q2 FY26 Revenue | Q2 FY25 Revenue | Growth % | Q2 FY26 Profit before tax & interest | Q2 FY25 Profit before tax & interest |
|---|---|---|---|---|---|
| Transmission Equipment | 44,108 | 40,512 | +8.9% | 8,485 | 8,697 |
| Material Handling Equipment | 14,602 | 11,039 | +32.3% | 3,998 | 2,871 |
| Total | 58,710 | 51,551 | +13.8% | 12,483 | 11,568 |
| Less: Inter-segment elimination | (897) | (737) | (471) | (256) | |
| Net Segment Revenue | 57,813 | 50,814 | +13.8% | 12,012 | 11,312 |
Segment EBIT Margins (from Investor Release)
| Segment | Q2 FY26 EBIT (Rs Cr) | Q2 FY25 EBIT (Rs Cr) | EBIT Margin Q2 FY26 | EBIT Margin Q2 FY25 |
|---|---|---|---|---|
| Gear Division | 85 | 87 | 19.2% | 21.5% |
| MHE Division | 35 | 26 | 25.7% | 25.4% |
5. Capex, Projects, and Corporate Activity
-
Capital Expenditure:
- Standalone Capex for H1 FY26: INR 5,830 lakhs (Q2) + INR 3,917 lakhs (Q1) = INR 9,747 lakhs approx.
- Consolidated Capex for H1 FY26: INR 6,227 lakhs (H1)
- Investments in advanced manufacturing capabilities over past 3 years highlighted.
-
Acquisitions/Disposals:
- Eimco Elecon (India) Ltd. ceased to be an Associate effective 23 April 2025; reclassified as financial asset.
-
Exceptional Items:
- Unrealized mark-to-market gain of INR 14,942 lakhs (net of tax) on reclassification of Eimco Elecon investment.
-
Restructuring/Strategic Shifts:
- Focus on expanding aftermarket services in MHE division.
- Strategic alliances with international partners ongoing.
6. Standalone vs Consolidated
- Both Standalone and Consolidated financial results are provided and reviewed by auditors with unmodified opinions.
- Consolidated results include subsidiaries and associates (some subsidiaries’ results certified by management, some reviewed by other auditors).
- Consolidated revenue and profits are higher than standalone, reflecting group operations.
Summary Table: Key Financial Metrics (INR Lakhs)
| Metric | Q2 FY26 Standalone | Q2 FY26 Consolidated | Q2 FY25 Consolidated | H1 FY26 Consolidated | H1 FY25 Consolidated | FY25 Consolidated |
|---|---|---|---|---|---|---|
| Revenue from operations | 49,618 | 57,813 | 50,814 | 1,06,870 | 90,050 | 2,22,696 |
| Other income | 1,831 | 1,832 | 1,139 | 4,475 | 2,582 | 6,005 |
| Total Income | 51,449 | 59,645 | 51,953 | 1,11,345 | 92,632 | 2,28,701 |
| EBITDA (approx.) | Not explicitly stated standalone | 126 Cr (Q2 FY26) | 112 Cr (Q2 FY25) | 256 Cr (H1 FY26) | 205 Cr (H1 FY25) | Not stated |
| Profit before tax | 10,375 | 11,299 | 11,054 | 32,011 | 20,469 | 53,697 |
| Net Profit after tax | 7,889 | 8,772 | 8,772 | 26,316 | 16,108 | 41,510 |
| EPS (Basic & Diluted) | 3.52 | 3.91 | 3.91 | 11.73 | 7.18 | 18.50 |
| EBITDA Margin (%) | Not stated | 21.7% | 22.1% | 23.9% | 22.7% | - |
| PAT Margin (%) | ~15.3% | 14.7% | 16.9% | 23.6% | 17.4% | - |
Actionable Insights for Investment Analysis Team
- Strong Revenue Growth: Consolidated revenue grew 13.8% YoY in Q2 FY26, driven by 33% growth in MHE division and 8.9% in Gear division.
- Profitability: PAT flat YoY in Q2 FY26 but up significantly in H1 FY26 due to exceptional gains and arbitration income. Excluding these, PAT growth is muted.
- Margins: EBITDA margins slightly compressed QoQ and YoY due to increased employee costs and product mix changes, especially in Gear division. MHE margins improved.
- Exceptional Items: Significant one-time gain from reclassification of associate investment boosts H1 FY26 profits; adjust for this in valuation.
- Order Book & Outlook: Strong order intake (+28% YoY in Q2 FY26) and healthy order book support confidence in meeting FY26 guidance.
- Dividend: Interim dividend declared at 50% of face value, indicating management confidence and shareholder returns.
- Capex: Healthy capex spend (~INR 97 Cr standalone in H1 FY26) to support manufacturing upgrades and growth.
- Geographical Mix: Domestic market remains dominant (79% revenue), with overseas stable but no growth in Q2 FY26.
- Segment Focus: MHE division is a key growth driver with higher margin profile and expanding aftermarket services.
- Accounting Changes: Reclassification of associate investment impacts comparability; adjust for exceptional items in analysis.
- No Auditor Qualifications: Clean audit reports enhance reliability of reported numbers.
Summary
Elecon Engineering Company Limited reported a solid Q2 and H1 FY26 performance with double-digit revenue growth, driven by strong demand in Material Handling Equipment and steady growth in Gear division. Profitability was boosted by exceptional gains related to investment reclassification and arbitration settlements. The company maintains a strong order book and declared an interim dividend, signaling confidence in future prospects. Continued investments in manufacturing and strategic focus on international markets and aftermarket services position Elecon for sustainable growth. Analysts should adjust for one-time items when assessing underlying profitability and valuation.
End of Analysis