Stock of this mining equipment maker soars 51% in 8 days; hits record high
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Shares of Eimco Elecon (India) continued their northward movement, hitting a new high of Rs 1,325, up 6 per cent on the BSE in Friday’s intra-day trade in an otherwise weak market after winning an order worth of Rs 38.96 crore for supply of coal mining equipment. The stock of industrial products company was quoting higher for the eight straight day, zooming 51 per cent during the period. In comparison, the S&P BSE Sensex was down 0.56 per cent at 66,034 at 11:33 AM. Thus far in the calendar year 2023, the stock price of Eimco Elecon has skyrocketed 236 per cent, as compared to 8 per cent rise in the S&P BSE Sensex.
In an exchange filing, the Eimco Elecon said it bagged order worth Rs 38.96 crore (excluding GST) from JMS Mining Private Limited for supply of coal mining equipment. The order should be executed on or before January 27, 2026. Last month, on September 29, the company had announced that it was awarded an order worth Rs 60.87 crore by Indradeep Construction Company for supply of coal mining equipment. The order should be executed on or before December, 2024. Eimco Elecon is a joint venture between the Elecon group and Sandvik AB, the world’s leading manufacturer of rock-drilling tools and mining equipment. Eimco Elecon produces a wide range of mining machinery, such as air-powered rocker shovels, electro-hydraulic side-dump loaders, and electro-hydraulic and air-powered load-haul dumpers, used as loading machines in coal mines. Its facilities are in Vallabh Vidyanagar, Gujarat.
Eimco Elecon has a near monopoly in the underground coal mining equipment industry in India, with healthy market share backed by an extensive after-sales service network. Long standing relations with Coal India (CIL) and The Singareni Collieries Company Ltd. (SCCL) also help its leadership position in the segment. The management said the company’s equipment demand largely depends on the underground coal mining expansion. The growth in underground production was stagnant due to higher cost of mining, however now the technology upgradation to blast free technology will open up new avenues for the company. Also the introduction of high capacity underground loaders for the Metal mines will add to the company’s revenues.
In the underground mining sector, the coming days will witness increase in demand for equipment catering to blast-free technology in underground coal mines and bigger size loaders and low profile dump trucks in the metal mines namely Zinc, Copper and Uranium. There has been the spectacular rise of the mine development operator (MDO) mode of mining. Subcontracting of mine operations has been a major feature of the coal industry for more than two decades now. It has also brought considerable financial and operational efficiencies to Coal India. There has been considerable increase in overall coal production in CIL and SCCL. Also, there has been steady increase in production from blast free technology in underground coal mining. Several tenders have been finalised/ to be finalised by the subsidiaries of CIL and several projects are in the pipeline, Eimco Elecon said in its FY23 annual report.
On future outlook, the company said the Government of India has made infrastructure creation a major pillar for sustainable growth. The initiatives of the present Government in promoting domestic players through ‘Make in India’ initiatives has encouraged many domestic & international players to invest in Infrastructure Equipment Industry. Eimco Elecon has also taken the lead by manufacturing Piling Rig, which is a high end engineering product used for cast-in place piles, diaphragm walls & foundation reinforcement of buildings. These machines will find its market in all major Infrastructure Projects like Road or Railway Over Bridges, High Rise Buildings, Dams, Metros & other Infrastructure Structures. One of the company's recent products is the EC 216 Piling Rig, which is the first Indian-made completely indigenized Piling Rig under ‘Make in India’ in technical collaboration with CZM from USA. It has started showing signs of acceptability by Indian Market due to its better performance over its rivals.
The company is going to add more Models of Piling Rigs in the forthcoming/impending Financial Year to increase the Offered Product Bouquet to Indian Buyers, Eimco Elecon said.
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