Kotak Securities is bullish on Engineers India has recommended buy rating on the stock with a target price of Rs 155 in its research report dated October 16, 2018.
Kotak Securities' research report on Engineers India
We met with the management of EIL to get perspective on the company's operations. Management is able to reassure (during the course of our interaction) that the company is well poised to benefit from the potential order flows in the domestic hydrocarbon space over the next three years. Middle East/Africa market has started to gain buoyancy after recent increase in crude oil price.
We reduce exit multiple (ascribe PER of 18x FY20 core earnings vis-à-vis PER 23x FY20 core earnings earlier) to factor in near/medium term sluggishness in order booking. However we believe that EIL stock is trading at extremely cheap valuation at PER 12x FY20 core earnings. Reiterate BUY with revised target price of Rs 155 (Rs 187 earlier).
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