Management indicated the tendering pipeline remains healthy as the process of ordering continues during 1Q and expects an order inflow of ~Rs15bn for FY21E. Key project such as NRL, Kaveri Basin (few packages), HEML, petrochemical projects, etc. to be awarded in FY21E. On the international market the company is witnessing a slowdown in ordering as countries like Oman, UAE, Saudi, etc have deferred their capex plan. We believe execution to remain under pressure for 2Q given the current challenging environment and is expected to garner pace from 3Q onwards....

15 August 2020 Engineers India (ENGR)s revenues were 14% higher than estimated; however, the lack of operating leverage led to a 16% miss in EBITDA. Margins in consultancy projects were weak at 14.3% v/s 39.3% in 1QFY20. Order inflows plunged 91% YoY to INR810m, with another INR160m worth of orders received thus far. Order inflows were primarily from the Hydrocarbon segment. The order book (OB) declined 20% YoY to INR91.2b, with OB/rev at 3.1x, the lowest in last four years. With superior execution and lower order inflows, a depleting order book remains a concern, although it is not alarming at this stage. On account of lower order inflows and a hazy outlook for FY21E, we reduce our FY21/FY22E EPS by 14%/5% and maintain our Buy rating, with TP of Revenue fell 36% YoY to INR4.7b (14% above our estimates). EBITDA was down 85% YoY to INR214m (16% below our estimate). The EBITDA margin stood at 4.

Decent inflows for FY20, cautious guidance for FY21E Order inflows for Q4FY20 came in at | 146 crore (| 1617 crore for FY20). All was from consultancy segment, taking the order backlog to | 9555 crore. For FY20, within consultancy, 50% came from domestic market, 50% from overseas market mostly from hydrocarbon sector, primarily from customers like MRPL, Numaligarh Refinery Expansion, IOCL, HPCL, ADNOC, etc....

26 June 2020 Revenues came in higher than estimated, led by superior performance in the Turnkey segment (74%/50% YoY increase in 4QFY20/FY20). With this, the revenue share of the low-margin Turnkey segment stood at 51% in FY20, up from 45% in FY19. An adverse revenue mix led to decline in EBITDA margins in 4QFY20/FY20. The order book declined 15% YoY to INR95.5b, with OB/Rev at 3x, the lowest in the last four years. With superior execution and lower order inflows, a depleting order book remains a concern, although it is not alarming at this stage. We tweak our FY21/FY22E EPS by -2%/+1% and maintain our Buy Revenues came in at INR8.5b, up 39% YoY (11% above estimate). EBITDA stood at INR1.1b, up 19% YoY (in-line). The EBITDA margin declined 220bp YoY to 13% on an adverse revenue mix. PBT stood at INR1.7b, up 17% YoY (in-line). The effective tax rate stood at 24.7% in 4QFY20 (v/s 35.

EIL may see some near term impact in Q1FY21E but execution pace for overall FY21E to be less impacted with lumpy execution in H2FY21E. As all domestic sites are seeking permission and following standard operating procedure (SOP), once approval is given, remaining projects will commence work from April 20, 2020....

Companies like Larsen & Toubro and KEC with exposure to the Middle East and North Africa (MENA) region are expected to get impacted by the recent more than 60% fall in crude oil prices to US$22/barrel. This is expected to impact overall orders/awarding from the MENA region. Companies like Elgi Equipments, AIA Engineering, Thermax, Engineers India and Kalpataru Power with exposure to international geographies like Europe, Middle East, China for sales or essential raw material may get impacted. However, lockdowns in India, UK, Europe and other geographies due to Covid-19 are...

Decent inflows for 9MFY20, cautious guidance for FY21E Order inflows for Q3FY20 came in at | 360 crore (| 1471 crore for 9MFY20), all from consultancy segment, taking the order backlog to | 10164 crore. Within consultancy, order inflow comprises | 327 crore from domestic and | 33 crore from overseas markets mostly from hydrocarbon sector, primarily from customers like MRPL, Numaligarh Refinery Expansion, IOCL, HPCL,...

5 February 2020 Even though Turnkey revenue booking during the quarter led to a big surprise on the revenue front, the operating performance was weak as the same carried low margins of ~3% v/s 25% for Consultancy business. Order book declined 6% YoY to INR102b, marking the second consecutive quarter of downtrend. We increase our EPS estimate by 4% for FY20 (largely on account of higher other income), but broadly maintain it for FY21/22. We maintain our reflect the weak ordering outlook. Revenue increased 54% YoY to INR8.9b on account of higher revenue from Turnkey segment. Revenue from Consultancy increased 7% YoY to INR3.6b, while Turnkey of Turnkey, which was exactly opposite in 3QFY19 in favor of Consultancy. EBITDA declined 10% YoY to INR856m a 10% miss as the margin of 9.6% was below our estimate of 14.7% due to an adverse revenue mix and higher provisions done for recently acquired projects.

Consultancy Biz Drives Healthy Performance; Maintain BUY Engineers India (ENGR) has reported a healthy performance in 1QFY20 with its PAT surging by 43% YoY to Rs1.24 bn vs. our estimate of Rs1.05 bn. Its revenue grew by 28% YoY to Rs7.3bn led by 38% YoY jump in revenue of consultancy segment to Rs4.4bn, while turnkey project's revenue grew by 16% YoY to Rs2.9bn. EBITDA increased by 62% YoY to Rs1.4bn, while EBITDA margin expanded by 390bps YoY to 19% led by 1,135bps YoY improvement in margin of consultancy business. Margin of turnkey projects fell by 310bps YoY to 2.7%. The Company has provided one-time Rs260mn in other expenses for impairment loss for oil block. As major chunk of its...

Engineers India Ltd (EIL) reported good set of numbers for 1QFY20, led by higher contribution coming from Consultancy Segment. Revenue/PAT up 28%/43% YoY, mainly led by strong revenue performance in Consultancy segment which grew by 38% YoY at Rs4.4 bn (included Rs966mn on account of change in order) and margin expansion in Consultancy segment. Order inflow during the quarter stood at Rs9.4 bn against Rs832 mn in 1QFY19, taking order backlog to Rs114 bn (42% Consultancy). Management indicated strong hydrocarbon tender activities in international geographies...

Engineers India Ltd (EIL) reported good set of numbers for 4QFY19 with Change in Estimates | Target | Reco Sales/PAT up 20%/38% YoY, mainly led by strong revenue performance in Turnkey segment and margin expansion in Consultancy segment. EIL...

ICICI Securities Ltd | Retail Equity Research Engineers India (EIL) reported weak Q3FY19 numbers due to higher contribution from the low margin turnkey business Due to strong execution in turnkey segment, revenue booking in this segment jumped 163.8% YoY to | 234.5 crore. Accordingly, turnkey segment contributed 40.6% to the overall topline (normally contributes less than 25-35% to the overall business). This helped overall revenues grow 21.9% YoY to | 577 crore. Consultancy...

14 November 2018 Sales increased 22% YoY to INR5.8b, below our estimate of INR6.5b. EBITDA declined 30% YoY to INR949m, with the margin of 16.4% ahead of our estimate of 15.7%, given the better-than- estimated margin in Consulting segment. EBIT margin shrank by 770bp YoY to 30% in Consulting and by 600bp YoY to 6.1% in EPC off a high base (3QFY18 margins were supported by provision reversal). PAT declined 16% YoY to execution of orders in hand for BS-VI upgrades. On the other hand, Consulting sales declined 11% YoY to INR3.4b. green R&D; center at Bengaluru EPC order (INR107m), (b) PMC and EPCM service for Dangote refinery project (INR168m) and (c) design and detailed engineering for project engineering services (INR94m). Order book of INR107.9b stands healthy, with revenue visibility of 4.7x its TTM revenue.

ICICI Securities Ltd | Retail Equity Research Engineers India (EIL) reported weak Q2FY19 numbers due to higher contribution from the low margin turnkey business Due to strong execution in turnkey segment, revenue booking in the segment jumped ~3.5x YoY. Accordingly, turnkey segment contributed 51% to overall topline (normally contributes less than 2535% to overall business). This helped overall revenues grow 58.8% YoY to | 681.4 crore. Consultancy revenues (| 332.4 crore) were flat for...

Engineers India (ENGR) has posted Rs978mn net profit in 2QFY19 (vs. our estimate of Rs1.06bn) mainly due to lower margin and dismal performance of high-margin consultancy business. However, its revenue grew by a healthy 59% YoY to Rs6.8bn led by 3.6x jump revenue from turnkey projects to Rs3.5bn, while consultancy business reported flat sales of Rs3.3bn. Despite strong revenue growth, EBITDA declined by 34% YoY to Rs915mn, while operating margin declined to 13.4% from 32.4% in 2QFY18 due to higher revenue-mix (51% vs. 22% in 2QFY18) of low-margin turnkey projects and one-off in 2QFY18. The margin of consultancy business fell by 275bps YoY to 29%. Order backlog rose by 37% YoY to Rs121.6bn, while order inflow...

Engineers India (EIL) reported a weak operational performance in Q1FY19 due to the changing execution mix i.e. higher turnkey execution and lower consultancy execution. On a YoY basis, turnkey revenues increased ~4x to | 251 crore while consultancy revenue declined 4.4% YoY to | 322.3 crore Thus, overall revenues grew 52.7% YoY to | 573.3 crore. Consultancy...

The company has recovered order inflows of `1660 Crores in consulting for 79 in EPC totaling to ` 2140 Crores. Major orders secured during the year is polymer addition project of over ` 1000 Crores and two EPC projects from ONGC worth `235 Crores and `244 Crores. The order book position as on March 31, 2018 stands at `7873 Crores compared to `7762 Crores last year. The mix is quite similar to...

Engineers India (EIL) reported weak Q4FY18 numbers Revenues increased 15% YoY to | 509.7 crore, below our estimate of | 521.7 crore. This was primarily on account of lower order booking in the consultancy segment. Consultancy & turnkey segments contributed 66.2% and 33.8% to the topline, respectively The company reported EBITDA margins of 11.2% vs. our estimate of 15.4%. This was primarily on account of higher contribution from the low margin turnkey segment. Consultancy segment also reported...

We believe that the weakness in EIL stock price over the last two months is predominantly driven by weak order inflows in the current quarter. We expect key large orders (including HPCL Barmer refinery order) to defer to Q1/Q2FY19. We retain long term positive view on EIL, however tweak FY19/20 estimates to factor in continued sluggish momentum in awarding of new large ticket size orders. We expect EIL valuations to remain under pressure driven by sluggish ordering momentum. Further delays in the awarding of key orders can pose threat to our earnings estimate. We reduce our target PER and value EIL at 23x FY20 (25x earlier)...

The share of LSTK recognition will be stronger in FY19. Provision write back makes comparison of LSTK/PMC margins difficult. We expect clean PMC/LSTK EBIT margins in excess of 30% and 5%. We maintain a 41% CAGR in EBITDA between FY17-FY19E. We maintain our TP at...