Driving innovation in industrial gearboxes and material handling equipment
Electronic Engineering: Behind the gleaming skyscrapers and the ceaseless hum of factories lies a network of quiet collaborators essential to the country’s industrial strength. These are the unsung heroes that keep the wheels of industry turning: industrial gearboxes and material handling equipment (MHE).
Industrial gearboxes are invisible power conductors. Efficiently transmitting and converting mechanical energy ensures smooth operation in numerous applications. MHE solutions streamline material movement within factories and warehouses.
Elecon Engineering acts as a bridge between gearboxes and MHE. They focus on efficiency, innovation, and collaboration. This helps a wide range of industries perform at their best and ultimately contributes to a stronger, more prosperous economy.
Electronic engineering industry overview
The Indian engineering sector has shown positive growth momentum, driven by increased government spending on key infrastructure sectors such as power, railways and infrastructure development and private investment in sectors such as cement and steel.
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However, the industry has faced challenges such as supply chain disruptions due to the Russia-Ukraine conflict and rising raw material and fuel costs affecting exports due to the closure of Chinese manufacturing hubs due to COVID-19.
Despite these challenges, the engineering sector has remained resilient due to government support policies such as: Production-linked incentives (PLI) plans, increased focus on indigenization, lower corporate tax rates and increased capital spending.
Capacity creation in sectors such as infrastructure, oil and gas, power, mining, automobiles and auto components, steel, refining, and consumer durables is driving the growth of the engineering industry. India’s engineering sector enjoys competitive advantages in terms of manufacturing costs, technology and innovation.
In recent years, the share of industrial exports has shifted significantly from developed countries to low-cost base countries such as India, and this trend is expected to continue in the future. Demand in the engineering sector is expected to remain healthy, primarily due to the government’s increasing thrust on infrastructure development.
The industry continues to invest in latest technologies and implement process automation to improve efficiency and overall competitiveness, positioning India as a preferred destination for advanced composite engineered products.
Capacity creation in the manufacturing sector, technological improvements in manufacturing processes, diversification of global players outside of China, and supportive regulatory policies such as PLI augur well for the growth of the industry.
Eleccon Engineering Company Overview
Elecon Engineering It is an Indian multinational company that manufactures and sells industrial gearboxes and material handling equipment (MHE). The company was founded in 1951 by Shri Ishwarbhai B. Patel at Goregaon, Mumbai.
The company is one of Asia’s largest manufacturers of MHE and industrial gears, serving key sectors such as power, cement, steel, paper, sugar, mining and rubber. Elecon is headquartered in Anand, Gujarat. Elecon Ltd was listed on the Bombay Stock Exchange in June 1962 and later became a public company when it was listed on the National Stock Exchange in November 2006.
Electron is one of Asia’s largest industrial gear manufacturing companies with facilities spanning over 3,35,000 square meters. It is the only company in India with the capability to manufacture complex gearboxes for the Indian Navy. Excluding India, the company has its own manufacturing and assembly plants in Sweden, the UK, the Netherlands and parts of the US.
The current stock price is trading between 1100 and 1150 and has recorded a whopping 110% return compared to last year. Currently, the company has an order book worth KRW 79.6 billion, including gear segment worth KRW 53.6 billion and MHE worth KRW 26 billion.
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Finance in Electronic Engineering
In fiscal year 2023, the company’s revenue increased by 26.21% from 1,211.95 in fiscal 2022 to 1,529.68 in fiscal 2023. During FY 2023, the company’s net profit also increased by 69.04% from 140.49 to 237.49 in FY 2022.
After analyzing three years from fiscal year 2021 to fiscal year 2023, the company recorded a compound annual growth rate (CAGR) of 12.01%. The increase in revenue and net profit was driven by increased government expenditure and private investment in key sectors such as power, railways, infrastructure, cement, steel, etc., which led to increased demand for products.
In FY23, Elecon maintained favorable financial metrics with return on equity (ROE) of 20.39% and return on equity (ROCE) of 23.99%.
Future plans for electronic engineering
Eleccon Engineering is actively seeking opportunities to expand its overseas business, especially original equipment manufacturer (OEM).
The company has already signed 11 OEM contracts and has an estimated annual business volume of €6 million. We plan to increase commercial production and deliveries to OEMs starting in the second half of FY25.
Elecon Ltd maintains its leading position in the domestic market while actively exploring new territories for exports. The company sees significant potential in markets such as Europe, Russia and other regions where demand for gear solutions is growing.
Ilecon is a company devoted to continuous innovation and new product development. It has entered the field of high-speed gears used in gas turbines, steam turbines, compressors, etc., utilizing its expertise and advancing its technology through consultants.
Elecon has also launched a three-year CAPEX plan of Rs. We invested $3 billion to strengthen our manufacturing capabilities and meet growing demand from domestic and international markets.
Elecon is also focused on sustainable growth and aims to create a socially responsible ecosystem by prioritizing sustainable practices, embracing diversity, ensuring safety and actively uplifting local communities.
conclusion
Elecon Engineering’s commitment to excellence has established it as a leader in industrial gearboxes and MHE in India. The focus on efficiency, innovation and meeting diverse industrial requirements has certainly contributed to the country’s industrial growth.
Its recent growth trajectory, combined with its focus on technological advancements and a skilled workforce, puts it well positioned to capitalize on the country’s growing industrial ambitions.
Their vision to become a “global leader in the mechanical transmission systems business” is a testament to their commitment to continuous improvement and commitment to drive the Indian industrial sector. Do you think the future of Elecon Engineering will continue to develop? Please let us know in the comments below.
Written by Pavunkumar VM
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