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Engineers India: Despite recent spike, valuation is a draw

While recovery is gradual, the EIL stock offers a good bargain at current prices

August 30, 2022 / 05:24 PM IST
Engineers India: Despite recent spike, valuation is a draw

Engineers India: Engineers India Q1 profit surges to Rs 65 crore on low base. Revenue jumps 9.2% YoY to Rs 815 crore. The company reported a consolidated profit at Rs 64.81 crore for the quarter ended June FY23, rising 2,318% compared to Rs 2.68 crore profit in year-ago period, aided by low base. The Q1FY22 profit was impacted by loss in joint venture entities or associates. Revenue grew by 9.2% YoY to Rs 814.8 crore in June FY23 quarter.

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Engineers India Ltd (EIL)’s dependence on the hydrocarbon space, particularly the domestic oil & gas PSUs, is one of the legacy issues leading to volatility in revenue and earnings. Often, order inflows and revenue suffer, depending on the capex in the sector, due to the volatile and unpredictable nature of the market. The last two years have been a case in point. Order inflows suffered because of the delays in ordering and lack of fresh orders. Further, execution issues have...

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