At a Glance
Eimco Elecon is a 50-year-old capital goods company supplying underground and opencast mining equipment. With 39% profit CAGR over 5 years, zero debt, and ROCE of 16%, it’s a rare PSU-adjacent value pick. But at 3.4x book and 30x PE, is it already discovered?
1. 🔥 Introduction with Hook
What’s 50 years old, debt-free, and making mining gear like it’s 1974?
Eimco Elecon.
From Side Dump Loaders to Rocker Shovels, they’ve quietly built a ₹1,500 Cr company out of Gujarat. And while coal headlines focus on Coal India or PSUs, this humble player is:
- Growing PAT at 39% CAGR (5Y)
- Paying dividends
- Rocking a ₹84 EPS
- Trading at 30x earnings
…all while making mining machines in a world obsessed with EVs and AI. So is this an old-economy goldmine or a value trap in disguise?
2. ⚙️ WTF Do They Even Do?
Eimco Elecon manufactures and markets mining machinery — mostly for underground coal mining.
Revenue Sources:
- ✅ Underground Coal Equipment (~89% of revenue)
- Side Dump Loaders
- Load Haul Dumpers
- Jumbo Drill Machines
- Haulers & Wheeled Loaders
- ✅ Spare parts & servicing – High-margin annuity biz
- ✅ Opencast mine machinery (limited share)
They’re basically the BEML for private coal players — minus the PSU drama.
3. 📈 Financials – Profit, Margins, ROE, Growth
| Metric | FY25 (TTM) |
|---|---|
| Revenue | ₹244 Cr |
| Net Profit | ₹49 Cr |
| Operating Margin | 22% |
| ROCE | 16% |
| ROE | 11.8% |
| EPS | ₹84.25 |
| Dividend | ₹5/share |
🧠 5Y Profit CAGR = 39%
📈 3Y Sales CAGR = 43%
🚀 Margins jumped from 5% (FY20) → 22% (FY25)
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹2,564 |
| P/E | 30.4x |
| Book Value | ₹749 |
| P/B | 3.42x |
| Market Cap | ₹1,479 Cr |
🎯 FV Range = ₹1,700 – ₹2,200
Assuming normalized EPS of ₹75–80 with 22–28x PE
Current P/E = 30x, which implies market already factoring sustained earnings momentum
So unless sales double, most of the upside may already be in.
5. 🔎 What’s Cooking – News, Triggers, Drama
- 🔄 Leadership shuffle:
- Executive Director Mukulnarayan Dwivedi transitioned to Senior Managerial role
- New Whole-Time Director Kamlesh Shah appointed (Sept 2025)
- 🆕 Board reconstitution underway
- 📢 Q1 FY25 profit at ₹14 Cr — strong continuation
Future triggers?
- 🔋 Coal India or PSU capex orders
- 🛠️ Entry into opencast segment or exports
- 🧾 Margin expansion from spares biz
6. 🏗️ Balance Sheet – How Much Debt, How Many Dreams?
🟢 Positives:
- Debt-Free
- Healthy reserves: ₹426 Cr
- Low fixed assets = asset-light for manufacturing
📌 Investments: ₹226 Cr (possibly in group companies or MF)
Balance sheet looks rock solid — the company could run without selling anything for 2 years.
7. 💵 Cash Flow – Sab Number Game Hai
| Metric | FY25 |
|---|---|
| CFO | ₹33 Cr |
| CFI | -₹36 Cr |
| CFF | -₹4 Cr |
| Net Cash Flow | -₹6 Cr |
⚠️ Investing cash flow mostly goes into investments
🧾 No signs of capex aggression, just treasury plays
8. 📊 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 16% |
| ROE | 11.8% |
| OPM | 22% |
| Interest Coverage | Infinite (no debt) |
| Debtor Days | 101 |
| Inventory Days | 387 😬 |
| CCC (Cash Conversion) | 432 Days |
🔴 Working capital cycle = too long (may be order-book driven)
9. 📉 P&L Breakdown – Show Me the Money
| Year | Sales | PAT | EPS | OPM |
|---|---|---|---|---|
| FY21 | ₹126 Cr | ₹11 Cr | ₹19.5 | 9% |
| FY23 | ₹173 Cr | ₹21 Cr | ₹36 | 14% |
| FY25 TTM | ₹244 Cr | ₹49 Cr | ₹84 | 22% |
📈 Doubled revenue in 2 years
📈 5x PAT in 4 years
💥 High operating leverage evident
10. 🧿 Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | OPM | CMP |
|---|---|---|---|---|
| Kaynes Tech | 137x | 11% | 15% | ₹5,998 |
| Tega Industries | 56x | 15.5% | 20% | ₹1,694 |
| Honeywell Auto | 68x | 13.7% | 14% | ₹40,320 |
| Eimco Elecon | 30x | 11.8% | 22% | ₹2,564 |
🧠 On margins and profitability, Eimco punches well.
💰 But it trades cheaper than the tech-fancy industrials.
11. 📦 Miscellaneous – Shareholding, Promoters
| Category | % Holding (Mar 2025) |
|---|---|
| Promoters | 73.64% (Stable) |
| FIIs | 0.45% (tiny nibble) |
| DIIs | 0.33% |
| Public | 25.58% |
🧠 Shareholding stable
📌 No major FII or DII action
👨👩👧 Retail investors = 12,000+ (up 50% in 1 year)
12. 🧑⚖️ EduInvesting Verdict™
✅ Eimco Elecon is clean, debt-free, and profitable
✅ Margins improving. ROCE is solid. EPS growth is real.
✅ Undervalued vs peers on P/E and profitability metrics
BUT…
❌ Working capital is clunky
❌ Core growth visibility limited beyond coal mining
❌ Valuation already baking in 1–2 years of earnings growth
🎯 Fair Value Range = ₹1,700–₹2,200
Current CMP ₹2,564 = trading at a slight premium
🧠 If coal capex continues and private mining expands — this could be a steady compounder.
But no demerger, no AI, no EV = no frenzy.
Verdict™:
Eimco is the anti-bubble — old-school engineering, real cash, and no drama. Buy for conviction, not for crowds.
✍️ Written by Prashant | 📅 11 July 2025
Tags: Eimco Elecon, mining equipment, capital goods, coal India suppliers, industrial stocks, ROCE 16, debt free companies, EduInvesting
