Buy Engineers India; target of Rs 104: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Engineers India

Engineers India (EIL) reported decent performance amidst challenging environment. Revenues came in at Rs4.7bn better than our/consensus estimate of Rs3.2/3.8bn. Order inflows came in Rs810mn (Rs970mn till date) in 1QFY21 primarily from the hydrocarbon segment. Order book stands at Rs91.2bn with Consultancy/Turnkey mix constituting 46:54. Execution run rate for 1Q stands at 60-65% and is expected to garner pace sequentially. 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.

Outlook

We believe execution to remain under pressure for 2Q given the current challenging environment and is expected to garner pace from 3Q onwards. Further, there could be deferment of orders such as MRPL, IOL main project, several storage tanks projects, etc which are expected to be awarded in FY22E. Overall, we believe its strong balance sheet, zero debt, strong order book, growth visibility and higher cash would augur well for EIL in this challenging time. The stock is currently trading at 10.8x/7.9x FY21E/FY22E. We maintain BUY rating on the stock with TP of Rs104.

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