Hold Engineers India; target of Rs 150: ICICI Direct

ICICI Direct's research report on Engineers India

Engineers India reported a good set of numbers for Q1FY24. Revenue came in at INR 8.1bn (flat YoY) while EBITDA improved 49% YoY to INR 685mn primarily aided by overall margin expansion of 276bps, which can be attributed primarily to 836bps margin expansion YoY in consultancy segment. Consultancy and turnkey segmental EBIT margins stood at 25.6% and 2% respectively. Order inflow for the quarter was worth INR 12.7bn resulting in an orderbook of INR 81bn (61% is from consultancy and the remainder is turnkey). Company’s other income jumped 240% YoY to INR 926mn due to a one-off interest income of INR 550mn on claims that were settled during the quarter.

Outlook

With the recent run-up in stock price, we downgrade it to HOLD (earlier: BUY) with a target price of INR 150 (earlier: INR 130).