India’s ESDM industry is moving from assembly line to innovation hub. Demand is accelerating, with the market estimated at $220bn (USD) in FY 25 on a 16.1% CAGR, spanning IT, telecom, consumer electronics, aviation, defence, solar PV, nano, and medical devices. Export ambition is surging: electronic goods are slated to rise from $15bn in 2021–22 to $120bn by 2026, positioning electronics among India’s top two to three export categories.
The outlook is buoyant, anchored by policy catalysts and design-first schemes. Design Linked Incentive and Chips to Startup, supported by venture capital, are seeding indigenous IP and talent. Opportunities cluster around electrification and smart devices: electric mobility alone is set to add $723.7m in revenue by 2026–27, while expanding system and design capabilities open doors to higher-value exports and deeper participation in global electronics supply chains.
On that surge, Elecon, founded in 1951, steps in as the mechanical backbone: designing and manufacturing industrial gears and bulk handling systems, then erecting and commissioning them end to end. Through Transmission Equipment (gearboxes, couplings, elevator traction machines) and Material Handling (raw material systems, stackers/reclaimers, loaders, crushers, wagon tipplers, feeders, port equipment), its Vallabh Vidyanagar, Gujarat plants serve projects executed across India and exported to global markets.
All round performance
Elecon’s 9M 26 reads like a sturdy gearbox: consolidated revenue of INR 16.2bn rose 13.4% y/y, with Transmission segment up 5.4% y/y while MHE sprinted 48.7% y/y as demand from steel, power, and cement kept orders turning.
EBITDA reached INR 3.7bn, reflecting a 5.1% y/y growth. However, margins dropped by 176bp to 22.5%, compressed by mix and higher employee costs. Net income advanced to INR 3.4bn (+24.8% y/y), aided by an INR 804.7m mark to market gain and arbitration one offs.
Management trimmed FY 26 expectations (revenue by up to ~5%, adjusted margin by up to ~2%) but flagged INR 7bn Q3 intake, an INR 13.72bn order book, improving overseas traction, and a product supply/aftermarket push in MHE.
Upside potential
Elecon’s share price rose by 4.4% over the past 12 months, with a market capitalization of INR 93.4bn ($1bn). The company is currently trading at a forward P/E of 19.7x, well below its three year average of 36.5x.
The consensus sentiment is thin but aligned, with two Buy ratings, with an average target price of INR 575.5, implying 38.3% upside over the current market price.
Crosswinds ahead
Elecon closes the chapter with steady execution and a visibly fuller pipeline, yet the plot has tension. Margin gears can grind when product mix tilts or people costs rise, and tender led pricing in cyclical end markets keeps the pressure on. Overseas expansion adds currency, compliance and logistics complexity, while arbitration or mark to market gains are unlikely to be recurring.
More broadly, timing risk lurks in lumpy projects, policy shifts and customer capex deferrals across steel, power and cement. Commissioning schedules, supply chain snags and working capital discipline will matter as the MHE push leans into product supply and aftermarket. Restructuring steps, including subsidiary exits, also require regulatory navigation. The engine is capable; the road ahead demands careful throttle control.
