Shares of this small-cap stock engaged in manufacturing and selling power transmission and material handling surged by over 3 percent after FIIs consistently increased their stake.
Share Price Movement
During Wednesday’s trading session, Elecon Engineering Company Limited’s share price opened at Rs.615.6 per share and later reached an intra-day high at Rs.636 apiece, marking a 3.3 percent increase. The share price has since declined and closed at Rs.621.2 apiece.
What happened
The stake of Foreign Institutional Investors (FIIs) in the company has shown a consistent upward trend over the past quarters. Starting at 2.81 percent in June 2023, the FII holding increased to 4.88 percent in September 2023 and further rose to 5.96 percent by December 2023.
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This growth continued into 2024, with the stake reaching 7.58 percent in March and eventually climbing to 9.10 percent by June. This steady increase of nearly 7 percent highlights the growing confidence and interest of FIIs in the company’s performance and potential.
The increase in FII holding has enhanced stock liquidity, potentially driving higher valuations and attracting more institutional interest.
Furthermore, Elecon Engineering is a debt-free company, which grants it greater financial stability and flexibility. This allows the company to allocate resources towards growth opportunities and maintain higher profit margins without the burden of interest payments.
Extensive Reach
Elecon Engineering has a strong global presence, with over 100 distributors and dealers, four manufacturing and assembly centers, 11 sales offices, and more than 35 customer representatives.
Additionally, within India, they have over 65 distributors and dealers and more than 55 customer representatives, ensuring extensive reach and support across the country.
Overseas Market
Elecon Engineering serves over 85 countries and derives 24 percent of its revenue from the overseas market. The company also maintains 11 OEM partnerships.
Marque Clients
The company features a robust client roster, including prominent names such as Dalmia, Adani, BHEL, British Steel, NTPC, UltraTech, L&T, and many others.
Financial Overview
Turning to the company’s financials, Elecon Engineering Company Ltd reported Q1 FY25 revenue of Rs.392 crore, reflecting a 5.31 percent decrease from Rs.414 crore in the same quarter last year. Profit After Tax (PAT) remained stable at Rs.73 crore during the same period. Overall, the company’s financial performance for the quarter shows some challenges.
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About the Company
Elecon Engineering Company Limited is a major Indian multinational specializing in industrial gear and material handling equipment for sectors like power, steel, and mining. Known for its innovation and global expansion, Elecon is one of Asia’s largest manufacturers in its field, with a strong commitment to engineering excellence and corporate social responsibility.
Written by – Siddesh S Raskar
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