Engineers India Ltd. share price target

BUY Engineers India Ltd between Rs. 280 - 260 for the Sequential Targets of Rs. 339 - 375

Provisions write back the order of the day: As against Revenue/EBITDA/PAT expectations of Rs3.9bn/Rs722mn/Rs931mn, ENGR reported Rs3.3bn/Rs937mn/Rs938mn. The jump in EBITDA, as against expectations, is led by provision write-back in LSTK+PMC segment. Order inflows, for Q2FY17, were 10% up YoY at Rs1,500mn. Note, order inflows are notoriously lumpy. Thereby, a YoY comparison misleads. Company has declared a 1:1 bonus. We maintain ACCUMULATE....

Flip-flop or caught flat-footed: We have no words to describe the events that unfolded in Q1FY17. New refinery stabilization problems is thing of past; India' long term growth story is back, company opines. As a testament, ENGR achieves annual order inflow guidance in one quarter. Now, on refinery projects, typically, in our observation, scope of PMC is 3-5%. Should that be the case, ENGR can bag at least Rs.45bn in order inflowsmerely from Maha refinery project. Contrast this with Rs.54bn in order backlog. However, management claims the order may be LSTK. Thereby, everything is up in the air. Nevertheless, the average PE multiple is 15x over the last decade. With a target price of Rs270 (~17x FY18E EPS), we recommend an ACCUMULATE, from earlier SELL....

Top takeaways from Q1FY17 : Recurring PAT (Rs 803mn, +50% yoy) was 42% above our estimate, led by margin expansion.Gross margin (86.2% vs. 56.9% yoy) surprised due to change in sales mix to the high? margin consultancy segment (79% of sales vs. 57% yoy). EIL achieved its FY17 order inflow guidance in 1Q itself (Rs 20.6bn, +318% yoy).

Valuation: Phillip Capital maintain their Buy rating as they believe that though the order inflows thesis may be priced in, there is further scope for re?rating on a turnaround in margins, which should benefit from operating leverage. We expect EIL’s core earnings (ex?other income) to see a 53% CAGR in FY16?18, aided by a 46% CAGR in EBITDA. We base our revised price target of Rs 280 (Rs 210 earlier) on 33x (30x earlier) FY18 core EPS of Rs 6.1 and add Rs 79/share of cash value.

9 Despite weak execution in its turnkey segment, recurring PAT (Rs 699mn) was 10% aboveourestimate,ledbyinlineEBITDAcoupledwithlowertaxrate. 9 EBITDA margin expansion of 10 percentage points yoy in Q4 was aided by the...

is geared towards export demand. Our oil and gas demandsupply forecast, indicates gap has increased from 7mmt in FY05 to 36mmt in FY16 and is likely to further increase to 45mmt by FY20. Further in the current cycle, PSU refineries have significantly ramped up...

to HPCL's Vizag refinery expansion (to 15mtpa from 8.3mtpa) and BPCL's Kochi refinery TARGETRS246(+18%) petchem complex. The 7mtpa Vizag expansion will entail a capex of Rs 184bn and could translateintoanopportunityofRs7.5bnforEILwhiletheRs46bnKochipetchemproject COMPANYDATA...

oil refineries because their business models are delinked from upstream (insulating their cash flows from the impact of a sharp decline in oil prices) and due to strong domestic demandforfuel(+10%YoYinFY16YTD).Asaresult,thethreeOMCs(HPCL,BPCLandIOCL)...

yoy) and flat EBITDA margins in FY16. It does not anticipate additional provision for CPCL CokerOvenUnit,ChennaiwhereithasalreadyprovidedRs1.1bnincostoverruns.Welower our FY16 and FY17 estimates by 11% and 8% and maintain Neutral rating with a revised...