Edelweiss' research report on Engineers India
Engineers India (EIL) reported in line performance (adjusting for one-time LSTK settlement revenue of INR374mn) with revenue and EBITDA growth of 16% and 8% YoY, respectively. Key highlights: a) Consultancy (PMC) business maintained course with 21% YoY growth in past 3 quarters; b) With EIL bagging the PMC order (~INR10bn) for HPCL’s Bhatinda refinery, order inflow stood robust at INR16bn in Q2FY18. Additional PMC work bagged for the Dangote refinery adds to EIL credentials in the international market; and c) Order book at INR89bn (15% plus YoY; 5.8x TTM revenues), strong domestic pipeline (Barmer and Mega refinery, among others) lends credence to our order inflow and revenue estimates. Maintain ‘BUY’ with TP of INR200 (18x FY19E) with strong revenue CAGR of 41% YoY over FY17-19 and robust RoE/RoCE of 19/28%.
While we do not anticipate any major hurdle to hamper P/L ramp up owing to robust order book, the key trigger for us remains the strong domestic oil and gas capex pipeline. We maintain ’BUY/SO’.For all recommendations report, click here
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