Multibagger stock: Elecon Engineering shares spurt 18% on upbeat Q1 results

Shares of Elecon Engineering Company, a manufacturer of industrial gears and material handling equipment, spurted 18 per cent in Tuesday's trade after the company said its consolidated profit after tax jumped 72 per cent year-on-year (YoY) to Rs 73 crore on a 26 per cent YoY jump in consolidated revenue at Rs 414 crore.

Elecon Engineering's Chairman & Managing Director Prayasvin B Patel said he was optimistic of sustaining the growth momentum going forward, with strong order book in hand across segments, continued focus to penetrate the exports markets and maintaining leadership position in the domestic geography.

Following the development, the stock soared 18.39 per cent to hit a fresh all-time high of Rs 748 on BSE. With this, the one-year return for the multibagger stock jumped to 122 per cent.

Elecon said it maintained its position as the market leader in the industrial gear division. Revenues from the gear division witnessed 27 per cent YoY growth. The company said it successfully revitalised the MHE Division, making it profitable once again. Elecon Engineering said it focused on supply of products & after market business in the MHE business, resulting in an EBIT margin of 23 per cent for the segment --an improvement of 1,200 bps compared to same quarter last year.

"We envisage to expand our market share by further penetrating into existing geographies and exploring new territories. We continue to make strides to grow our overseas business and the recent development with respect to signing five OEM business in the European market is a positive indicator of our progress," the company said in a BSE filing.

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