Engineers India Ltd. share price target

EIL Q2FY18 outperformed our estimate due to 1/ strong execution in PMC division; 2/ higher operating margin supported by operating leverage and 3/ provision write back (one off items) in the LST division (Lump Sum Turnkey Project). Order inflows grew substantially in the quarter led by PMC orders; current order backlog stands at Rs 88.1 Bn (highest level ever) implying three year revenue visibility. We reiterate our long term positive view on EIL; expect significant improvement in FY19 earnings driven by 1) improved execution in 2HFY18-FY19 2) improved margins on back of operating leverage. We increase FY19 earnings estimate to...

Reiterate BUY with a TP of Rs 201/sh (27x Sept 19E core EPS + cash). Engineers India (ENGR) reported the highest-ever order book at Rs 88.7bn vs 51/77bn YoY/QoQ (5.7x TTM revenues), with strong order inflows at Rs 16bn vs Rs 1.5/3.4bn YoY/QoQ. Sales grew 27/14% YoY/QoQ at Rs 4.29bn vs our expectation of Rs 3.9bn, riding on a 21/50% rise in PMC/LSTK sales to Rs 3.3bn/961mn. EBITDAM stood at 32.4% (+473bps YoY). EBITDA grew 48/70% YoY/QoQ to Rs 1.4bn, mainly on account of a 610bps YoY rise in EBITM of LSTK to 50.6%. With wage hikes effected in Jan-17, staff costs rose 22% YoY to Rs 1.9bn. Net profit rose 27% to Rs 1.2bn.

ICICI Securities Ltd | Retail Equity Research Engineers India (EIL) reported decent Q2FY18 numbers. The company reported topline and EBITDA in line with our estimates. However, PAT...

Revenue increased 9.8% YoY to | 375.4 crore, which was below our estimate of | 446.8 crore. This was primarily on account of lower order booking in the turnkey (EPC) segment. Turnkey segment contributed only 13.6% to the topline of the company (| 50.9 crore) vs. our expectation of ~30% for the quarter EIL reported strong EBITDA margins of 21.8% (our estimate of 20%) due to increased contribution from high margin consultancy segment. The consultancy segment contributed 86.4% to the topline and ~95%...

We reiterate BUY with a revised TP of Rs 174/sh (25x FY19E core EPS + cash). Engineers Indias (ENGR) 1QFY18 revenues came in line with our estimates at Rs 3.8bn. Revenue growth was driven by the PMC segment (+21%), while the LSTK segment declined 30% on the back of slower execution. With no major provision write backs, PMC/LSTK EBIT margins stood at 28.0/7.6%. Overall EBITDA margins stood at 21.8% (+40bps YoY). Wage hike provisions increased to Rs 380mn (vs ~Rs 200mn provided in 4QFY17). Consequently, APAT stood at Rs 814mn. The order book stood robust at Rs 77bn (5.2x TTM revenues).

Revenue rose by 36.28% to Rs. 442.93 Cr in Q4FY17 when compared to the previous quarter

ICICI Securities Ltd | Retail Equity Research Engineers India (EIL) reported Q4FY17 numbers, which were below our estimates. The key miss was on account of a significant jump in...

West Coast refinery may slip to FY19: With Rs77 bn in order backlog, (~4x Book Bill for FY18E revenue) the visibility is closer to all-time best. The major ongoing projects include, but not restricted to, are: BSVI and other expansion work for IOCL, CPCL, HMEL, MRPL and BPCL. AS we know that Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Indian Oil Corporation have signed a Consortium Agreement on December 07, 2016 to carry out pre-project activities for setting up of West Coast Refinery and a Petrochemical Project of 60 MMTPA capacity. And thankfully, Maharashtra Govt. has identified and acquired the land. Thereby, we think ENGR has a strong pipeline and backlog that can flip the fortunes. But this...

Engineers Indias (ENGR) 4QFY17 results were in line with our estimates. Revenue grew 47% YoY on a low base, as execution started picking up in projects won in H1FY17. As guided by mgmt, provision write-backs continued (Rs 570mn in 4QFY17), leading to PMC/LSTK margins of 37.2/35.3% resp.

Engineers India (EIL), a Navratna public sector enterprise, is one of the oldest companies in the Indian public sector. Over the years, the company has emerged as a market leader in the Indian hydrocarbons segment with expertise in design, engineering and project implementation. EIL has consistently grown its topline & bottomline over the last 10 years at a CAGR of 11.3% and 6.4%, respectively, in FY07-16. This is despite weak crude prices in the last few years and, consequent, deferral of capex spending by its key customers. Core competency in...