Hold Engineers India; target of Rs 120: ICICI Direct

ICICI Direct recommended hold rating on Engineers India with a target price of Rs 120 in its research report dated May 20, 2019.

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June 24, 2019 / 15:13 IST

26 Aug, 2025 12:21

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ICICI Direct's research report on Engineers India

Engineers India (EIL) reported strong Q4FY19 numbers. This was due to higher-than-expected contribution from the turnkey business coupled with strong margins.Revenues grew 20.2% YoY to Rs 612.6 crore. Consultancy and turnkey segment contributed 57.5% and 42.5%, respectively. Consultancy revenues grew 4.4% YoY and turnkey revenues jumped 51% YoY. Absolute EBITDA increased 62.3% YoY to Rs 93.3 core. This was due to healthy EBIT margins in the turnkey segment. Consultancy and turnkey segments reported EBIT margins of 28.7% and 6.3%, respectively. Overall EBITDA margins came in at 15.2% vs. 11.3% YoY. Other income grew 24.4% YoY. Absolute PAT grew 37.7% YoY to Rs 94.9 crore.

Outlook

Going forward, we expect revenue, EBITDA and PAT to increase at 15%, 22.2% and 15.5% CAGR, respectively, in FY19-21E. We expect accelerated revenue and EBITDA growth due to increasing contribution from turnkey segment, coupled with higher margins. EIL is also likely to face project-related risks in this segment of the business. EIL’s balance sheet continues to remain healthy with nil debt and cash balance of ~Rs 2660 crore. EIL’s book-to-bill is at healthy ~4x (order book at Rs 11,188 crore). We value EIL at 15x P/E on FY21E EPS of Rs 7.8 to arrive at a target price of Rs 120 per share. We maintain HOLD rating on the company.

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