Elecon Engineering share is in Bullish Momentum

Technical Analysis:

Elecon engineering share is in bullish momentum. On the daily chart, the script has formed a bullish flag pattern last week. The stock has been trading above the 245 level for the last 5 days despite the downward trend in the broader market. Further, the stock is bouncing from 246 level on the daily chart and hence treated as a support level. The volume in the counter was recorded above its long and short moving average during last week. On the weekly chart, the stock has strong support at 214 level trading with strong volume for the last four weeks. This show the strength of the counter and is ready to move up.

Momentum indicators such as ADX and MACD look bullish in the daily chart. Elecon engineering share is looking strong both in the weekly and monthly chart and ready for an upward movement. The stock has crossed its 52-week high of 269 level strongly with strong volume. The counter can reach the 300 level within a short period. If broader market support, the stock may reach its all-time high of 340 level in 1 month. This counter is trading above all its moving averages.

Fundamental Analysis:

Elecon engineering is a pioneer in the manufacturing of Industrial Geared motors and Reducers, Material Handling Equipment, Mining equipment, casting processes, etc. It is one of the largest manufacturers of material handling equipment and industrial gear in Asia. The Indian government is pushing for infrastructure investment and the make-in-India concept. This will boost demand for equipment. Additionally, there is robust demand coming from steel, mining, and other industries from overseas. Opening of China with further boost demand for material handling equipment.

Elecon engineering is a small-cap company with a market cap of INR 2811 crores available at 20 PE and 2.68 prices to book value. The sector PE is 44.39 and PB is 4.95. The Company has been a consistent performer in terms of revenue. Over the last 5 years, the market share of Elecon engineering increased from 2.24% to 2.27%. The company recorded total revenue of INR 1213.55 crores in FY 2022 from INR 1052.31 crores in FY 2021. Net income and EPS of Elecon engineering were recorded as more than double during this period. Net income has increased from INR 57 crores in FY 2021 to INR 140 crores in FY 2022. EPS has also increased from 5.14 to 12.52 during the same period. However, this is a cyclical play and hence can be a good bet for a short-term investment of 3 to 6 months.

Elecon Engineering Daily Chart
Elecon Engineering Daily Chart
Elecon Engineering Weekly Chart
Elecon Engineering Weekly Chart

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