Elecon Engineering Company Limited has announced its financial results for the third quarter and nine months ended December 31, 2024, showcasing robust growth and improved profitability across key segments.

Financial Highlights

• Consolidated revenue reached ₹529.00 crores in Q3FY25, marking a 12% year-on-year increase
• EBITDA stood at ₹143.00 crores with a healthy margin of 27%
• Profit After Tax (PAT) climbed to ₹108.00 crores, resulting in a strong PAT margin of 20%

Segment Performance

Material Handling Equipment (MHE) Division

The MHE division emerged as the star performer for Elecon Engineering this quarter:

• Revenue growth: An impressive 72% year-on-year increase
• EBIT margins: Substantial improvement of 1,300 basis points, reaching 31.6%

Gear Division

The Gear division showed mixed results:

• Q3FY25: Marginal revenue growth of 2.1%
• 9MFY25: 3.6% decline in revenue, attributed to delayed order inflows and sluggishness in domestic steel and sugar industries

International Business

Elecon Engineering's global operations continued to contribute significantly to the company's overall performance:

• International business accounted for approximately 27% of total consolidated revenue in 9MFY25

Corporate Actions

The company has taken several important corporate actions:

1. Interim Dividend: Declared at ₹0.50 per equity share
2. Insider Trading Policy: Board approval for amendments to align with recent SEBI regulations

Financial Performance Table

Elecon Engineering's Q3FY25 results demonstrate the company's ability to navigate challenges in certain sectors while capitalizing on growth opportunities, particularly in the Material Handling Equipment division. The robust performance in international markets and proactive corporate governance measures further underscore the company's commitment to sustainable growth and shareholder value.

Elecon Engineering Company Limited , a prominent player in the gearing industry, has encountered a significant legal challenge concerning a disputed CENVAT (Central Value Added Tax) credit case. The company recently received an unfavorable order from the Commissioner (Appeal), which has prompted it to take further legal action.

Details of the Dispute

The controversy centers around the carry-forward of the closing balance of disputed CENVAT credit. According to the LODR (Listing Obligations and Disclosure Requirements) data, the Commissioner (Appeal) passed an order rejecting Elecon Engineering's appeal against a previous order by the GST Commissioner. The original order had ruled that the disputed CENVAT credit could not be utilized by the company.

Financial Implications

The case involves a substantial amount of Rs. 1,020.19 lakhs, relating to the assessment year 2017-18. While the exact financial impact remains uncertain at this stage, the magnitude of the disputed amount underscores the significance of this legal battle for Elecon Engineering.

Company's Response

In response to this adverse ruling, Elecon Engineering has decided to escalate the matter to a higher judicial authority. The company has already filed a writ petition before the Hon'ble High Court of Gujarat, challenging the decision of the Commissioner (Appeal). Additionally, Elecon plans to file a suitable application to tag the recent order with their existing petition.

Ongoing Legal Proceedings

The dispute is now part of Elecon Engineering's ongoing litigations related to indirect tax matters. The company is awaiting the final hearing of their case in the Gujarat High Court. This move demonstrates Elecon's commitment to pursuing all available legal avenues to protect its interests in this CENVAT credit dispute.

Transparency and Compliance

Elecon Engineering has been proactive in disclosing these developments to its stakeholders. The company has duly informed the stock exchanges about this update on pending litigations, in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As this legal battle unfolds, stakeholders and industry observers will be keenly watching the outcome, given its potential implications for Elecon Engineering's financial position and the broader implications for CENVAT credit issues in the manufacturing sector.