50% Dividend After 1:2 Stock Split: Engineering Stock Falls 11%, Q2 Revenue Down; Buy?

Small cap company engaged in engineering sector, Elecon Engineering Company shares today slipped 11.00 after the company reported Q2 financial results. Last trading price of Elecon Engineering Co shares on BSE stood at Rs 642.00 per share. The company's market capitalisation stood at Rs 14,446.87 crore. Elecon Engineering shares gained 61% in last 1-year and zoomed 257% in last 2-years. Board of Directors of Elecon Engineering today declared an interim dividend of 0.50/- per equity share of Re 1/- each. The company fixed October 28, 2024 as the record date for interim dividend. Check key details below:

Elecon Engineering Recommends Interim Dividend: As per the exchange filing of Elecon Engineering dated October 18, "declaration of an Interim Dividend for FY 2024-25 of Re. 0.50/- (i.e. 50%) per Equity Share of Re. 1/- each. The record date for determining the entitlement of the shareholders for the interim dividend shall be Monday, 28th October, 2024."

Elecon Engineering Q2 Results: Revenue for Q2FY25 stood at Rs. 398 crores as compared to Rs. 423 crores in Q2FY24. Revenue from Gear division were impacted on account of delay in receipt of order from customers resulted in delay in execution within Q2FY25. We anticipate faster execution in balance H2FY25 to achieve the overall guidance for FY25. EBIT for Q2FY25 stood at Rs 82 crores. as compared to Rs 110 crores. in the corresponding quarter last year. The EBIT Margin for the quarter ended September 2024 stood at 20.5% as compared to 26.0% in the corresponding quarter last year. Revenue for the quarter stood at Rs 110 crores as compared to Rs 62 crores in the corresponding quarter last year, growing 77.8% Y-o-Y.

Commenting on the results, Shri Prayasvin B. Patel, Chairman & Managing Director of Elecon Engineering Co. Ltd. said, "For Q2FY25, Elecon reported consolidated revenues of Rs 508 crores, reflecting a 4.8% year-on-year growth. The quarter's EBITDA stood at Rs 112 crores, with EBITDA margins at 22.1%. Profit after Tax (PAT) for Q2FY25 was Rs 88 crores, with PAT margins at 17.3%. Elecon remains the domestic market leader in Industrial Gear Solutions and Material Handling Equipment, offering cutting-edge manufacturing, top-tier products, and the capability to deliver customized solutions with minimal lead times."

Elecon Engineering Shares Performance: The 52-week high price of Elecon Engineering shares on BSE is Rs 738.85 per share (as on 16/10/2024) and 52-week low price is Rs 357.00 per share (as on 26/10/2023). Elecon Engineering shares slipped over 7% in last 1-week, gained 37% year-to-date, soared 674% in last 3-years, and zoomed 3959% in last 5-years.

Should You Buy Elecon Engineering? According to A R Ramachandran, Independent SEBI Research Analyst, "Elecon Engineering is bearish on the Daily charts with strong resistance at 719 on the Daily charts. A daily close below support of 655 could lead to target of 564 in the near term."

Elecon Engineering Stock Split In 2024: According to the BSE filing of the company issued as on July 4, 2024, "the Company has fixed Friday, 19th July, 2024 as the "Record Date" for determining entitlement of Equity Shareholders for the purpose of sub-division/ split of existing Equity Shares of the Company, such that 1 (one) equity share having face value of Rs. 2/ - (Rupees two only) each, fully paid-up, will be sub-divided into 2 (two) equity shares having face value of Re. 1/- (Rupee one only) each, fully paid-up, ranking pari-passu in all respects which was approved by the Equity Shareholders at the 64th Annual General Meeting held on 25th June, 2024."

Elecon Engineering on April 19, 2024 approved sub-division of the equity shares of face value of Rs. 2.00 /- each into 2 equity shares of the face value of Rs. 1.00/- each."

Bonus Share History: Elecon Engineering Company offered 1 bonus issue since October 10, 2007. Its last bonus issue was declared in the ratio 2:1 with ex-date fixed as October 10, 2007.

Disclaimer:

The stock has been picked from the brokerage report of A R Ramachandran. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.