Elecon Engineering Company Analysis

dividend

Pros

• Dividends paid are thoroughly covered by earnings (13.2x coverage).
• Elecon Engineering's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).

Cons

• Dividends per share have fallen over the past 10 years.
• Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
• Elecon Engineering's dividend is below the markets top 25% of dividend payers in India (3.08%).

health

Pros

• Elecon Engineering is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Elecon Engineering is profitable, therefore cash runway is not a concern.
• Elecon Engineering is profitable, therefore cash runway is not a concern.
• Debt is covered by short term assets, assets are 2.8x debt.
• Elecon Engineering's cash and other short term assets cover its long term commitments.
• The level of debt compared to net worth has been reduced over the past 5 years (99.3% vs 59.5% today).

Cons

• Debt is not well covered by operating cash flow (12%, less than 20% of total debt).
• Interest payments on debt are not well covered by earnings (EBIT is 1.8x annual interest expense, ideally 3x coverage).
• Elecon Engineering's level of debt (59.5%) compared to net worth is high (greater than 40%).
• High level of physical assets or inventory.

management

Pros

• The average tenure for the Elecon Engineering board of directors is over 10 years, this suggests they are a seasoned and experienced board.
• Prayasvin's compensation has been consistent with company performance over the past year, both up more than 20%.

Cons

• Prayasvin's remuneration is higher than average for companies of similar size in India.
• The average tenure for the Elecon Engineering management team is less than 2 years, this suggests a new team.

misc

Pros

Cons

• Elecon Engineering is not covered by any analysts.
• Elecon Engineering has significant price volatility in the past 3 months.

past

Pros

• Elecon Engineering has delivered over 20% year on year earnings growth in the past 5 years.
• Elecon Engineering has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).

Cons

• Elecon Engineering's 1-year earnings growth is negative, it can't be compared to the 5-year average.
• Elecon Engineering used its assets less efficiently than the IN Electrical industry average last year based on Return on Assets.
• Elecon Engineering has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
• Elecon Engineering's 1-year earnings growth is negative, it can't be compared to the IN Electrical industry average.

value

Pros

• Elecon Engineering is good value based on assets compared to the IN Electrical industry average.
• Elecon Engineering is good value based on earnings compared to the IN Electrical industry average.
• Elecon Engineering is good value based on earnings compared to the India market.
• NSEI:ELECON is up 16.7% outperforming the Electrical industry which returned 9.3% over the past month.
• NSEI:ELECON is up 16.7% outperforming the market in India which returned 8% over the past month.

Cons

• Elecon Engineering's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Elecon Engineering's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• ELECON underperformed the Electrical industry which returned -33.5% over the past year.
• ELECON underperformed the Market in India which returned -14.5% over the past year.