Axis Securities starts coverage on Elecon Engg with 'Buy'; check target

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Elecon Engineering share price today: Domestic brokerage Axis Securities has initiated coverage on Elecon Engineering, a power transmission equipment manufacturer, with a 'Buy' rating, citing the company's proven manufacturing capabilities, global reach and robust growth outlook. 

 

According to the brokerage, Elecon has built a strong global presence through subsidiaries in Europe and the United States, strengthened further by the Benzlers-Radicon acquisition. "With a longstanding reputation for engineering excellence and innovation, Elecon delivers comprehensive, end-to-end industrial solutions, positioning it as a key player in the capital goods and heavy engineering space," it said in a note.

 

The brokerage expects the company’s revenue, Ebitda, and PAT to grow at a CAGR of 19 per cent, 21 per cent, and 17 per cent, respectively, over FY25–28.

 

According to analysts, the stock currently trades at 19x Sep’27E PE, and valuing it at 24x Sep’27E EPS results in a target price of ₹635 per share. The target indicates an upside potential of 27 per cent from the November 27, 2025, closing price of ₹635 on the NSE.

Here's why Axis Securities has a positive stance on Elecon Engineering:

Proven manufacturing capabilities: According to Axis, Elecon's Gear Division is Asia's largest industrial gear facility, manufacturing a broad range of customised gearboxes. In the Material Handling Division, the company's systems are deployed across India and international markets, catering to power, mining, steel, cement, and port sectors. "Strong backward integration provides Elecon with control over design, prototyping, and the broader supply chain, supporting consistency in quality and delivery across domestic and global operations," the brokerage said. 

 

Growing order pipeline backed by strong demand: Analysts note that Elecon’s order book rose 20 per cent Y-o-Y to ₹1,302 crore as of September 30, 2025, reflecting solid revenue visibility. Domestic demand remains strong across core sectors such as power, steel, sugar, marine, defence, and cement, while improving industrial cycles in key global markets are expected to further support growth.

 

Government tailwinds and export push: Analysts highlighted that supportive government initiatives such as Make in India and the PLI schemes are likely to boost domestic manufacturing and accelerate capex, benefiting Elecon’s core sectors. The MHE division, closely tied to the capital investment cycle, stands to gain from any uptick in private-sector spending.

 

Policy support and global expansion: On the global front, Elecon continues to maintain a strong presence across Asia, the Middle East, the US, Europe, and Africa. Despite recent geopolitical headwinds, inquiry pipelines remain healthy. The company is also strengthening its international reach through brand-building efforts and new rapid-build centres, which, alongside expanded capacity, are expected to drive revenue growth and enhance margins over the medium term.

 

Growth outlook: For FY26, the company has guided for revenues of ₹2,650 crore and Ebitda margins above 24 per cent. The company is also expected to deliver a robust 48 per cent revenue increase in H2FY26 over H1FY26. This growth momentum is likely to sustain over the medium term, supported by a healthy 19 per cent CAGR in the order book between FY25 and FY28, driven by steady demand from key end markets. Profitability is also seen improving, with Ebitda margins expected to increase above 25 per cent, while free cash flows are projected to nearly double by FY28 compared to FY25.  Disclaimer: Target price and stock outlook has been suggested by Axis Securities. Views expressed are their own.