IGI Logo

Ordering pipeline remains positive

Our view

Engineers India Ltd (ENGR) reported a strong set of numbers, led by Turnkey segment which reported 16% YoY growth while Consultancy segment de-grew by 2% YoY. Gross margin contracted ~340bps YoY however, due to reversal of certain provisions EBITDA margin saw a ~540bps YoY expansion at 18.8%. Order inflows at Rs39.1bn got a boost due to a large Turnkey order win. As on 4QFY23 order book stands at ~Rs76.9bn (2.3x TTM revenue), providing revenue visibility for next few quarters. Going forward, management maintained order inflow guidance at ~Rs40-50bn over the next 2-3 years

We believe EIL’s healthy order book, lean balance sheet, strong project pipeline and strong growth visibility augurs well in the long run and expect EIL to report revenue/PAT CAGR of 15%/43% over FY23-FY25. The stock is currently trading at a P/E of 11.6x/8.8x FY24E/25E EPS. We maintain our ADD rating with a revised TP of Rs126 valuing the company at 10x FY25E EPS.

Result Highlights

* Sales came in at Rs8.7bn (YSLe Rs8.5bn) primarily led by Turnkey segment which grew by 16% YoY at Rs4.9bn while weak execution in the Consultancy segment led to a decline of 2% YoY to Rs3.7bn

* EBITDA grew by 51% YoY to Rs1.6bn (YSLe: Rs808mn) with EBITDA margins coming in at 18.8% vs 13.4% in 4QFY22 due to operating leverage benefits

* PBT grew by 36% YoY to Rs2bn on the back of strong operational performance

* PAT grew by 26% YoY at Rs1.6bn (YSLe Rs806mn)

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://yesinvest.in/privacy_policy_disclaimers
SEBI Registration number is INZ000185632

Above views are of the author and not of the website kindly read disclaimer