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By Janaki Krishnan

MUMBAI, Dec 19 (Reuters) - Elecon Engineering Co Ltd <ELCN.BO> sees revenues of 10 billion rupees in 2007/08, on the back of a healthy order book and new activities contributing to the topline, a senior official said on Wednesday.

"There are promising investments taking place in the power, cement and port sectors and that will drive our material handling equipment division," Chief Financial Officer H.C. Shah told Reuters.

In the last financial year the company reported revenues of 7.23 billion rupees.

Its outstanding order book at the beginning of December stood at 11.27 billion rupees while it is expecting fresh orders worth 2 billion rupees by the end of the year.

Elecon manufactures material handling equipment (MHE) used in sectors such as power, port, cement, and steel. It also makes a wide variety of industrial gears for use in the power transmission sector.

The MHE division, which contributes 50 percent to revenues, has bagged the lion's share of the orders with its outstanding order book at 9.12 billion rupees. The company outsources most of its requirements for this division.

The company recently won large orders from the Damodar Valley Corporation and NTPC <NTPC.BO> totalling more than 6 billion rupees.

The gear division contributes around 40 percent to revenues but has higher net margins of around 22 percent. With 95 percent of the production being done in-house it consumes a substantial share of the company's resources.

Elecon has recently acquired some land in order to expand capacities, especially for the gear segment.

Inorganic growth is also being looked at to augment gear manufacturing capacity. "We are evaluating the option of buying a medium-sized unit in this segment," Shah said.

The target company would have revenues in the region of 3 billion rupees and could be located in India or abroad, he added.

The company's recent foray into windmill farms and manufacture of gear boxes for it will also contribute to revenues this year, he added.

Elecon expects to manufacture and sell at least 20-25 windmills in the current fiscal year giving it revenues of around 500-600 million rupees, Shah said.

In the next fiscal year the company expects revenues from windmills to rise to 1.5 billion rupees. It is also manufacturing gear boxes for the windmills.

Shares in Elecon were up 1.7 percent at 328 rupees in the Mumbai market.

((Reporting by Janaki Krishnan; editing by Sunil Nair) )

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Keywords: ELECON ENGINEERING/OUTLOOK