February 22, 2017 / 16:41 IST
Engineers India’s (ENGR) 3QFY17 results were in line with our estimates. Revenue declined 12% YoY on the back of a weak opening order book. As guided by the mgmt, provision write-backs continued (Rs 90mn in 3QFY17), leading to LSTK margins of 28.4% (+1240bps YoY).
Outlook
With cash of Rs 29bn (FY19E), core capital employed is zero to negative, implying infinite RoIC. In this backdrop, premium valuations are justified for ENGR in our view. We reiterate BUY with TP of Rs 178/sh (25x FY19E core EPS + cash).
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