Buy Engineers India; target of Rs 160: ICICI Direct

ICICI Direct's research report on Engineers India

Engineers India (EIL), established in 1965, is an Indian public sector Navratna company, primarily present into engineering consultancy and turnkey segments. In engineering consultancy, company’s core focus area currently is oil & gas sector which mainly includes refinery and petrochemicals. In turnkey segment, company takes EPC (Engineering, Procurement & Construction) contracts. The company also secures consultancy orders from international markets such as Middle East, Africa, South Asia & Central Asia In FY23, company’s consolidated revenue stood at Rs 3330 crore (+14.3% YoY) with net profit of Rs 346 crore (+148% YoY). Engineering consultancy contributed ~43% to total revenues in FY23 while turnkey segment contributed ~57%.

Outlook

Valuation at 13.6x P/E on FY25E EPS looks attractive considering the multiple tailwinds. We value EIL at Rs 160 i.e. 17x P/E on FY25E EPS of Rs 9.3.