This industrial equipment stock hits 14-year high; zooms 85% in 3 months

Shares of Elecon Engineering Company hit 14-year high of Rs 264.85 as they rallied 15 per cent on the BSE in Monday’s trade on the back of heavy volumes in an otherwise subdued market. As of 1:44 PM, the trading volumes on the counter more-than-doubled as 6.05 million equity shares representing 5.4 per cent of the company's total equity changed hands on the NSE and BSE. In comparison, the S&P BSE Sensex was down 0.02 per cent at 55,758 points.

The stock of industrial equipments company traded at its highest level since February 2008. The stock surged 35 per cent in four trading days. In the past three months, the stock zoomed 85 per cent, as compared to 2.6 per cent rise in the S&P BSE Sensex. Earlier, it had hit a record high of Rs 343 on December 20, 2007.

Elecon Engineering has two business segments – transmission equipment and material handling equipment. The transmission equipment segment engaged in manufacturing of transmission equipment like gearboxes, couplings and elevator traction machines. The material handling segment is engaged in manufacturing of material handling equipment like raw material handling systems, stackers, reclaimers, bagging or weighing machines, wagon or truck loaders, crushers, wagon tipplers, feeders and port equipment. It is also engaged in executing projects on these material handling equipment and systems.

On May 13, 202, rating agency Brickwork Ratings upgraded the ratings for the Bank Loan Facilities of Elecon Engineering Company.

Highlighting the rationale behind the upgrade, the rating agency said, "The upgrade takes into account the company’s improvement in the profitability margins, substantial reduction in debt over the past three years, significant reduction in contingent liabilities, comfortable and improving capital structure, healthy cash flow generation, sustained and significant reduction in the Material Handling Equipment (MHE) division debtors, and adequate liquidity in the form of unencumbered cash and bank balances, along with unused bank lines." CLICK HERE FOR MORE