Elecon Engineering Slips On Mixed Q1:SEBI RA Flags Bullish Outlook Despite Seasonal Dip

Elecon Engineering shares fell 4% on Friday after it reported a mixed performance in its first-quarter (Q1 FY26) earnings.

SEBI-registered analyst Rajneesh Sharma highlighted that the company delivered robust growth across key metrics, riding on operating leverage and a better mix on a year-on-year (YoY) basis. But compared quarter-on-quarter (QoQ), it was a more tempered story, with revenues and core margins dipping sharply after a strong Q4 finish. Additionally, the reported PAT saw a sharp rise, but exceptional, non-operational gains largely drove it. 

Q1 revenues rose 25% to ₹491 crore, while profits surged 139% to ₹175 crore (YoY). On a QoQ basis, revenues fell 38% and profits rose 19%. EBITDA margins rose to 26.6%. 

Sharma added that while headline profits looked strong, core business saw a typical seasonal drop. 

The management reaffirmed its FY26 revenue guidance of ₹2,650 crore. The gears division saw a margin decline, as expected, due to increased depreciation from capex and costs related to international expansion. The Material Handling Equipment segment saw 139% YoY growth. 

Order inflows exceeded ₹620 crore in Q1 alone, and the orderbook stood at ₹948 crore as of March-end.

On the technical charts, Elecon stock is below the resistance zone os ₹665–₹720, which has historically acted as a supply area. Support is seen at ₹585.15. 

The primary uptrend from June 2023 remains intact, and a falling wedge breakout in May 2025 confirmed a bullish reversal. The stock has corrected 44% from its October high to its March 2025 low, followed by a 62% rally from March to July 2025. 

Sharma added that the outlook remained bullish on Elecon Engineering. He concluded that its earnings reveal steady business. The real test now shifts to the charts and whether the stock can overcome resistance at ₹665–₹720. A decisive breakout here, with strong volume and close above ₹670+, could unlock targets of ₹720 and ₹750. 

Until then, he advised traders to be patient with accumulation or dips near ₹600–₹585, which offer safer setups. 

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