Elecon Engineering Company Ltd

- Total consolidated open orders as of June 30, 2023: INR 793 crores - Gear division open orders: INR 655 crores - MHE (Material Handling Equipment) division open orders: INR 138 crores - Q1 FY24 order intake for gear division: INR 446 crores - Q1 FY24 MHE division order intake: INR 51 crores - Total consolidated order inflows during Q1 FY24: INR 497 crores - Defense sector order book: Small, mostly gearbox requirements and spares ~ INR 100 crores+ (not material) - Expect good order inflows in defense and marine sectors by end of year and next two years - New OEM agreements in Europe with an annual estimated volume of ~EUR 5 million, prototype development ongoing, commercial production expected in FY25

- Currently, there is no mention of any active fundraising through debt or equity. - The company has a net cash surplus of INR 250 crores as of June 30, 2023, indicating a strong cash position. - The management indicated that only nominal capex for modernization and upkeep is anticipated for the next 2-3 years, implying no immediate need for large capital raising. - There is a capital allocation strategy to create a cash "kitty" for possible future needs such as diversification or acquisition, but no ongoing process for acquisitions or fund raising. - The company is prepared to utilize funds if any beneficial opportunities arise but has not planned specific fundraising actions as of now.

- Elecon Engineering Company Limited currently does not foresee any major capex for the next 2-3 years aside from nominal investments for modernization and upkeep. - Current capacity utilization is around 76%, with potential to increase production through subcontracting without significant capex. - The company has built a cash reserve of approximately INR250 crores, which is being invested prudently to generate returns at low risk. - This cash reserve ("kitty") is maintained for potential future needs such as diversification, acquisitions, or other strategic investments, though no active acquisition or diversification process is underway at present. - The management remains open to utilizing the cash reserve opportunistically should promising opportunities arise.

- Elecon expects to achieve INR2,000 crores revenue in the current year with a capacity utilization of approximately 76%, allowing further scaling without major capex. - They anticipate sustaining around 30% growth this year and aim to continue this growth trajectory into FY25 and FY26, backed by strong order inflows. - Growth drivers include expanding export business, marine and defense sectors, new OEM contracts in Europe, and launching innovative products like the EON 2.0 series. - The company foresees good demand from domestic, export, and marine sectors collectively. - Strategic focus on OEMs, especially in Europe and Africa, aims to convert prototypes into commercial production by FY25, adding significant revenue. - Despite no major capex planned, growth is expected to come from better capacity utilization, subcontracting, and modernization. - The company is confident about high-quality sustainable growth and improving EBITDA margins ahead.

- Elecon Engineering expects to sustain and possibly improve EBITDA margins going forward, reflecting confidence in profitability. - The company targets consolidated revenue of INR 2,000 crores in the current year, with full capacity utilization at about 76%, allowing further scaling without major capex. - Growth is anticipated from exports, domestic markets, marine business, and new OEM contracts in Europe. - No significant capex is planned in the next two to three years, with only nominal investments for modernization. - Earnings growth is supported by a strong order intake (INR 446 crores in Q1 FY24 for gear division) and signed OEM agreements in Europe, with commercial production starting FY25. - PAT margin for Q1 FY24 improved by 470 basis points; the company is optimistic about sustaining or improving profits and EPS. - These drivers suggest continued robust earnings growth over the next few years.