Shares of Elecon Engineering Company Ltd., a leading industrial gear and material handling equipment manufacturer, witnessed a dramatic sell-off on Friday, January 09. The stock price nosedived by a staggering 16% during intraday trading, hitting a nine-month low of ₹422 per share. This sharp decline was a direct reaction to the company's disappointing financial results for the December quarter, which were announced after market hours on Thursday.
Q3FY26 Performance: A Deep Dive into the Numbers
The company's consolidated financial performance for the third quarter of the fiscal year 2026 presented a mixed but largely concerning picture. Elecon reported a net profit of ₹72 crore for Q3FY26. This figure represents a significant 33% year-on-year decline from the ₹108 crore profit posted in the same quarter last year.
On the revenue front, the growth was modest. Consolidated revenue from operations saw a slight improvement of 4.3% year-on-year, reaching ₹552 crore. However, this growth fell short of market expectations. The primary drag was the company's core gear division, which faced headwinds due to delays in order inflows. This slowdown impacted project execution and led to customers deferring dispatch and delivery schedules. Consequently, revenue from the gear segment remained stagnant at ₹429 crore.
A silver lining emerged from the Material Handling Equipment (MHE) division, which reported a robust 16.3% growth in revenue to ₹123 crore. The company highlighted that this division is consistently securing new orders in the domestic market and anticipates inflows from international markets soon.
Management Outlook and Revised Guidance
In response to the softer quarterly performance, Elecon Engineering has revised its full-year guidance for FY26. The company now expects its overall revenue guidance to be impacted by up to 5%. Furthermore, adjusted EBITDA margins are projected to be lower by up to 2%.
Despite the near-term challenges, the management expressed confidence in the future. Shri Prayasvin B. Patel, Chairman & Managing Director, pointed to a strong order book as a key reason for optimism. The order intake for Q3FY26 stood at a healthy ₹701 crore, and the total order book as of December 31, 2025, was robust at ₹1,372 crore.
"The strong order book, combined with a healthy order inflow outlook across both domestic and overseas markets, provides good visibility and confidence going forward," Patel stated in the earnings filing. The company also noted encouraging inquiry levels that support expectations for revenue improvement and margin recovery.
Stock Price Trend and Long-Term Perspective
The recent crash adds to a period of significant pressure for Elecon Engineering's stock. The shares have lost approximately 40% of their value since the highs of July 2025, when they traded around ₹716 per share. From its all-time peak of ₹739, the decline is about 42%.
The stock concluded the calendar year 2025 with a 24% drop, marking its first annual decline in five years. While the near-term trend appears weak, the long-term performance narrative remains strong. Despite the recent fall, the stock has delivered nearly 140% returns over three years and an extraordinary 1,630% gain over the past five years, highlighting its historical growth trajectory.
Investors are now closely watching the execution of the large order book and the recovery in the gear division's order inflows to gauge the stock's future direction.
