This capital goods company delivered over 180% returns in a year; do you hold it?

An investment of Rs 1 lakh in the shares of this company 1 year ago would have turned to Rs 2.8 lakh today. 

Elecon Engineering Company Ltd, an S&P BSE SmallCap company, has delivered multibagger returns to its shareholders in the last one year. During this period, the company’s share price jumped from Rs 197.15 on 24 May 2022 to Rs 557.15 on 23 May 2023, an increase of 182.6% in the one-year holding period.     

Recent performance highlights   

In the recent quarter Q4FY23, the company’s net profit increased by 45.20% YoY to Rs 66.32 crore. The company’s net sales increased by 28.06% YoY to Rs 424.54 crore from Rs 331.53 crore. PBIDT excluding other income rises by 35.45% to Rs 92.85 crore from Rs 68.55 crore in the same quarter last year. 

The company is currently trading at a PE of 26.3X against the industry PE of 27.4X. In FY23, the company delivered an ROE and ROCE of 20.4% and 24.7%, respectively. The company is a constituent of Group B stocks and commands a market capitalization of Rs 6,251.22 crore. 

Company Profile 

Elecon Group was founded in the year 1951 in Goregaon, Mumbai by Late Ishwarbhai B. Patel. Initially, the Company manufactured conveyor systems with a focus on Engineering, Procurement, and Construction projects in India. Elecon Engineering Company Limited was incorporated as a Private Limited Company in January 1960. The company is a trademark that reflects leadership and relentless innovations in the power transmission industry and as an integrated solution provider for the entire value chain of material handling systems in India. 

Growth Drivers 

The company is involved in the design and manufacturing of Material Handling Equipment and Industrial Gears and also involved in providing erection and commissioning solutions for its products. 

Share price movements   

Today, the share of Elecon Engineering Company Ltd opened at Rs 551.50 and has touched a high and low of Rs 568.50 and Rs 551.50, respectively. So far 2,574 shares have been traded on the bourses. 

At the time of writing, the shares of Elecon Engineering Company Ltd were trading at Rs 564.65, an increase of 1.35% from the previous day’s closing price of Rs 557.15 on BSE. The stock has a 52-week high and low of Rs 568.50 and Rs 180.90 respectively on BSE.