Buy Engineers India; target of Rs 298: SPA Research

EIL reported much better than expected set of numbers on the back of sharp improvement in operating margins. While revenues declined by 12.7% driven by 56.1% dip in turnkey segment’s revenue, operating margins improved by 1263 bps YoY to 21.4% driven by shift in sales mix to high margin consultancy segment and partly owing to provision write back on one of the LSTK project which EIL had provided for during 4QFY16. Order inflows in the last quarter surged by 4.2x to INR 20.5 bn, resulting in 1.5x growth in order backlog to INR 54.7 bn (3.8x book to bill). We continue to retain our BUY rating with a revised target of INR 298 on the stock.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.