Elecon Engineering Company has responded to a notice from the National Stock Exchange (NSE) regarding non-compliance in Related Party Transaction (RPT) disclosure. The company has requested a waiver from the NSE for this non-compliance.

Board's Response to NSE Notice

In a filing to the stock exchanges, Elecon Engineering stated that the matter was placed before its Board of Directors at a meeting held on 11th July, 2025. After discussions and due consideration of the facts and circumstances, the Board noted several key points:

1. The company had submitted the Integrated Financial Results (IFS), including the Related Party Transactions (RPT) disclosures, on 24th April, 2025 on the BSE Listing Portal in XBRL format, within the prescribed timeline.

2. Based on past experience and understanding, the company filed the Integrated Financial Results including RPT disclosure (in XBRL format) only on the BSE Listing Portal, expecting it to automatically reflect on the NSE website without requiring separate action on the NSE portal (NEAPS).

3. This expectation was based on the company's recent experience with submitting the Integrated Corporate Governance Report on 21st April, 2025, which was reflected automatically on the NSE website after submission to BSE.

4. The company was surprised to receive communication from NSE on 5th May, 2025 regarding non-compliance.

Immediate Corrective Action

Upon receiving the NSE communication, Elecon Engineering took immediate corrective action:

• The required disclosure was uploaded on the NEAPS portal on 6th May, 2025.
• A formal waiver application was submitted to NSE on 10th July, 2025, along with supporting documents and payment of applicable processing fees.

Company's Stance

Elecon Engineering emphasized its commitment to full compliance and transparency. The Board acknowledged that the omission of submission on the NSE portal was due to a lack of clarity and the simultaneous introduction of two distinct but similarly framed systems—the Integrated Filing System and the Single Filing System.

The company maintained that it acted in good faith, believing that the BSE filing fulfilled the compliance requirement across both exchanges.

Waiver Request

Given these circumstances, Elecon Engineering has requested a waiver from NSE for the non-compliance. The company's management expressed its commitment to maintaining high standards of regulatory compliance and has taken steps to prevent such occurrences in the future.

As the matter is currently under consideration by NSE, stakeholders and investors will be keenly watching for the exchange's decision on the waiver request.

Elecon Engineering Company Limited , one of Asia's largest industrial gear manufacturers and material handling equipment providers, has announced robust financial results for the first quarter, along with a significant legal development.

Financial Highlights

Elecon Engineering reported a consolidated revenue of ₹491.00 crores for Q1, marking a healthy 25% year-on-year growth. The company's EBITDA stood at ₹130.00 crores, with an EBITDA margin of 26.60%. Notably, the profit after tax (PAT) for the quarter reached ₹175.00 crores, including exceptional items.

Segment Performance

Gear Division

The Gear division showed resilience with a 6.10% year-on-year growth, generating revenue of ₹357.00 crores. However, the EBIT margin for this segment decreased to 18.40%, impacted by increased employee costs, brand-building activities in overseas markets, and accelerated depreciation on recently capitalized assets.

Material Handling Equipment (MHE) Division

The MHE division delivered a strong performance, with revenue surging by 138.90% year-on-year to ₹133.00 crores. This division's EBIT saw a remarkable growth of 334.60% compared to the same quarter last year, with the EBIT margin improving from 25.30% to 46.00%.

One-Time Income and Exceptional Gain

The company's financial results were boosted by two significant one-time items:

1. An arbitration claim settlement in the MHE division, contributing ₹35.00 crores (₹25.00 crores in Revenue and ₹10.00 crores in Other Income).
2. An exceptional gain of ₹80.00 crores (net of tax) from the reclassification of investment in EIMCO Elecon (India) Limited.

Strategic Outlook

Prayasvin B. Patel, Chairman & Managing Director, expressed confidence in the company's strategic direction, stating, "We are steadily advancing towards our strategic objective of generating 50% of our consolidated revenue from international markets by FY30." He emphasized the company's focus on strengthening relationships with global OEMs, sustained brand-building initiatives, and ongoing investments in R&D and product innovation.

Litigation Settlement with BHEL

In a separate announcement, Elecon Engineering disclosed the amicable settlement of a long-standing dispute with Bharat Heavy Electricals Limited (BHEL). The company has received a total of ₹2,540.00 lakhs from BHEL as part of the settlement, effectively resolving two separate matters:

1. An arbitration case where Elecon had claimed ₹910.00 lakhs, with a counter-claim of ₹257.00 lakhs by BHEL.
2. Another dispute where Elecon had claimed ₹2,250.00 lakhs.

The settlement of these legal matters is expected to have no adverse financial implications for Elecon Engineering.

Conclusion

Elecon Engineering's strong Q1 performance, coupled with the successful resolution of significant legal disputes, positions the company favorably for continued growth. The management's focus on international expansion and strategic investments in key areas underscores their commitment to long-term value creation for stakeholders.