Motilal Oswal is bullish on Engineers India recommended buy rating on the stock with a target price of Rs 93 in its research report dated June 26, 2020.
Motilal Oswal 's research report on Engineers India
Revenues came in higher than estimated, led by superior performance in the Turnkey segment (74%/50% YoY increase in 4QFY20/FY20). With this, the revenue share of the low-margin Turnkey segment stood at 51% in FY20, up from 45% in FY19. An adverse revenue mix led to decline in EBITDA margins in 4QFY20/FY20. The order book declined 15% YoY to INR95.5b, with OB/Rev at 3x, the lowest in the last four years. With superior execution and lower order inflows, a depleting order book remains a concern, although it is not alarming at this stage.
We tweak our FY21/FY22E EPS by -2%/+1% and maintain our Buy rating, with TP of INR93 (prior: INR100).
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