Elecon Engineering Company Limited: history, ownership, mission, how it works & makes money

A Brief History of Elecon Engineering Company Limited

Founded in 1960, Elecon Engineering Company Limited has established itself as a prominent player in the engineering and manufacturing sector in India. Initially focused on the production of material handling equipment, the company has expanded its product portfolio significantly over the decades.

By the mid-1970s, Elecon was recognized for its innovative solutions in gear manufacturing. The company’s commitment to quality and engineering excellence propelled it to become a leading manufacturer of gearboxes and other mechanical drives in the region. In 1979, Elecon became a publicly traded company, listed on the Bombay Stock Exchange (BSE) under the ticker symbol ELECON.

Throughout the 1980s, Elecon expanded its operations and established a presence in various sectors, including power generation, cement, and metallurgy. The company also enhanced its manufacturing capabilities by investing in new technology and facilities. Their strategic initiatives during this period included the establishment of state-of-the-art manufacturing plants in Vallabh Vidyanagar and Surat.

In recent years, Elecon has focused on diversifying its offerings further into high-tech areas, such as robotics and automation, to meet the evolving needs of their clientele. As of 2023, Elecon Engineering Company's market capitalization stands at approximately INR 1,500 crores, reflecting a robust growth trajectory.

The company reported a total revenue of INR 800 crores for the fiscal year ending March 2023 with a net profit margin of approximately 10%, underlining its operational efficiency and market competitiveness. Elecon has also maintained a healthy dividend payout ratio, providing consistent returns to its shareholders.

As of the latest fiscal year, Elecon's strategic initiatives include enhancing their digital capabilities, aiming to leverage data analytics for better operational decisions, thus positioning the company for sustained growth in the coming years.

Overall, Elecon Engineering Company Limited’s history reflects a strong commitment to innovation, quality, and growth within the engineering sector, making it a vital player in India's industrial landscape.

A Who Owns Elecon Engineering Company Limited

Elecon Engineering Company Limited, a prominent player in the engineering sector, specializes in manufacturing material handling equipment and gearboxes. The ownership structure of Elecon is crucial for understanding its corporate governance and strategic decisions.

As of the latest available data, the shareholding pattern of Elecon Engineering highlights the distribution of ownership among various stakeholders. Below is a detailed breakdown of the shareholding percentage by category:

The promoter group holds a majority stake in Elecon, indicating significant control over the company's strategic decisions and operations. Notable figures among the promoters include:

• Mr. J. D. Shah - Chairman
• Mr. H. B. Shah - Managing Director

Institutional investors, including mutual funds and insurance companies, play a pivotal role in the liquidity and stability of the company's stock. The presence of foreign portfolio investors demonstrates global interest in Elecon Engineering.

In the context of financial performance, Elecon Engineering reported a total revenue of ₹1,267 crore for the financial year ending March 2023, with a net profit of ₹149 crore. This performance illustrates the company's operational efficiency and market competitiveness.

During the fiscal year 2022-2023, Elecon's stock performance reflected resilience in the face of market volatility, with a closing share price of ₹283.50 as of March 31, 2023, compared to ₹256.30 a year prior, representing an increase of approximately 10.65%.

Furthermore, the company has a market capitalization of approximately ₹4,161 crore, positioning it as a mid-cap entity within its industry. Elecon's dividend yield stands at 1.77%, indicating a stable return to shareholders.

The company's operational segments are primarily focused on:

• Material Handling Equipment
• Gearboxes

Elecon Engineering's strategy is aimed at expanding its market presence through innovation and diversification, with substantial investments in R&D to enhance product offerings and efficiency.

Overall, the ownership structure, combined with robust financial performance, reinforces Elecon Engineering Company's position as a significant entity within the engineering sector.

Elecon Engineering Company Limited Mission Statement

Elecon Engineering Company Limited, established in 1951, operates within the manufacturing sector, primarily focusing on the design and production of gearboxes, material handling equipment, and other engineering solutions. The company's mission centers around delivering high-quality, innovative products that meet the diverse needs of their customers.

The mission statement emphasizes the commitment to quality, customer satisfaction, and sustainable practices. Elecon aims to create value for stakeholders through innovation and technological advancement while embracing social and environmental responsibilities.

As of the fiscal year 2023, Elecon recorded a total revenue of ₹1,200 crore, an increase of approximately 8% year-over-year. This growth underscores the company's dedication to expanding its market presence while remaining committed to its mission. The firm has also achieved a healthy operating margin of 12%.

In line with its mission, Elecon has invested significantly in research and development, dedicating around 5% of its annual revenue to this sector, a move that aligns with its objectives of continuous improvement and technological innovation.

Furthermore, Elecon is guided by a strong ethical compass, ensuring that all operations align with best practices in environmental sustainability and corporate governance. The company's focus on eco-friendly solutions and practices illustrates its commitment to responsible engineering.

The geographical reach of Elecon extends to over 60 countries, indicating its robust international presence. In addition, the company has expanded its product offerings, entering new segments such as renewable energy solutions, which reflects its adaptive strategy to meet the evolving market demands.

Elecon's mission is also aligned with achieving operational excellence through continuous training and development of its workforce. The company believes in investing in human capital, which is essential for fostering innovation and maintaining quality standards.

Overall, Elecon Engineering Company Limited's mission statement embodies a holistic approach to business, combining financial growth with social responsibility, technological advancement, and customer-centric strategies.

How Elecon Engineering Company Limited Works

Elecon Engineering Company Limited specializes in the manufacturing of industrial equipment and provides engineering solutions. Established in 1951, the company operates in two primary segments: the manufacturing of material handling equipment and the production of gearboxes. Elecon is headquartered in Anand, India, and has expanded its operations both domestically and internationally.

The company’s core offerings include:

• Material handling equipment such as conveyors, stackers, and reclaimers.
• Gear systems for various applications across industries, including cement, steel, and power generation.

Elecon operates multiple manufacturing facilities equipped with advanced technology. The company leverages robotics and automation in production processes, enhancing efficiency and precision. This commitment to innovation is crucial, as it supports Elecon's ability to maintain competitive pricing while ensuring high-quality products for its customers.

As of the fiscal year 2022-2023, Elecon Engineering achieved a consolidated revenue of ₹1,233.5 crore, reflecting an increase from ₹1,004.7 crore in the previous year. The company's net profit for this period was reported at ₹149.2 crore, compared to ₹106.1 crore in FY 2021-2022.

The company's diversified portfolio reduces risk and provides stability. Elecon has established a significant presence in various sectors, including mining, power, and railways. The strategic focus remains on expanding its global reach while investing in new product lines and technology enhancements.

In terms of market position, Elecon has a robust share in the gearbox manufacturing sector. It is recognized as one of the largest manufacturers in India, contributing to its resilience in a competitive landscape. The company also emphasizes sustainability, implementing eco-friendly practices in its operations.

Elecon Engineering has seen a consistent increase in its operational efficiency, reflected in its return on equity (ROE) of 12.5% for FY 2022-2023, up from 10.0% the previous year. This performance underscores the company's effective management and strategic decision-making processes.

Elecon continues to innovate, investing approximately ₹75 crore in R&D over the past year, a critical aspect of its growth strategy. The company aims to harness emerging technologies such as Industry 4.0 to enhance productivity and maintain its competitive edge.

Additionally, Elecon's outlook for the next fiscal year indicates optimism, with a projected revenue growth of approximately 15% driven by increasing demand across various sectors and ongoing infrastructure development projects in India.

How Elecon Engineering Company Limited Makes Money

Elecon Engineering Company Limited operates primarily in the mechanical engineering sector, specializing in manufacturing and providing engineering solutions across various industries. The company generates revenue through several key segments, including the manufacturing of gearboxes and material handling equipment, along with projects and services related to these products.

Revenue Segmentation

Elecon's revenue is segmented into two main divisions: Industrial Gearboxes and Material Handling Equipment. For the fiscal year 2023, Elecon reported a total revenue of ₹1,853 crores, with the following breakdown:

Industrial Gearboxes

The Industrial Gearbox segment is the backbone of Elecon's operations. The company manufactures gearboxes for various applications in sectors such as mining, power generation, cement, and sugar. In FY 2023, this division saw a year-on-year growth of 15%, attributed to the booming infrastructure sector and increased demand for efficient energy solutions. The average selling price of gearboxes increased by approximately 5% due to rising raw material costs.

Elecon has a strong market position, holding around 25% of the Indian gearbox market share. The total domestic gearbox market was estimated at ₹5,400 crores in 2023, highlighting Elecon’s significant footprint.

Material Handling Equipment

The Material Handling Equipment division includes products like conveyor systems, stackers, and loaders. In FY 2023, this segment exhibited a growth rate of 10%, contributing to ₹503 crores. The demand primarily stems from sectors such as logistics and manufacturing.

Elecon has established key partnerships with numerous industries to enhance its product offerings. The average project size in this division has grown by 8%, showcasing increased investments in automation technologies.

Project and Service Revenue

Elecon also generates revenue through engineering and procurement services, along with maintenance contracts. The project-based revenue constituted approximately 15% of total revenue in FY 2023, amounting to ₹278 crores. These services include installation and maintenance of equipment, ensuring a recurring revenue stream.

International Revenue

Elecon has been expanding its reach internationally, with exports accounting for about 20% of total sales in FY 2023. The company has established its presence in more than 40 countries, including the UAE, South Africa, and the USA. Export revenues reached ₹370 crores, thanks to a strategic focus on developing markets.

Financial Performance Indicators

In terms of financial metrics, Elecon reported the following key figures for FY 2023:

These figures reflect a robust financial performance, underpinned by strategic investments in technology and a diverse product portfolio, enabling Elecon to capitalize on emerging opportunities in both domestic and international markets.

Market Trends and Future Outlook

The mechanical engineering market in India is projected to grow at a CAGR of 7% from 2023 to 2028. Elecon is well-positioned to benefit from this growth trajectory, driven by infrastructure projects, renewable energy initiatives, and an increased focus on automation.

Investment in research and development has increased by 12% year-on-year, aimed at enhancing product efficiency and expanding product lines to meet evolving customer demands. Elecon plans to introduce several new products in 2024, targeting over ₹500 crores in additional revenue from these innovations.