Buy Engineers India Ltd For Target Rs. 134 - Sushil Finance
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CONFERENCE CALL HIGHLIGHTS:
For Q3FY21 and 9MFY21:
* During 9MFY21, EIL achieved a turnover of INR 2,138 Cr, which was down by 16% as compared to turnover of INR 2,538 Cr in 9MFY20. Segmental breakup for 9MFY21 is as follows; Consultancy, INR 978 Cr (Domestic: Rs.729 Cr & Overseas: Rs. 248 Cr) down by 15% on a YoY basis. Turnkey turnover is INR 1,009 Cr down by 15%.
* The operating profit for 9MFY21 stands at INR 239 Cr, compared to INR 414 Cr of previous period. The operating profit of 9MFY20 includes an amount of Rs. 84 Cr wrt. variation order received during Q1FY20 for Consultancy projects. Additionally, one time impairment expense to the tune of Rs. 26 Cr is also included in 9MFY20 in other expenses on account of impairment of exploration expenditure relating to the oil & gas exploration blocks.
* In Consultancy sector, EIL achieved profit margin of 22%, down by 829 Bps compared to the margins in 9MFY20. In Q3FY21, the margins were 25% down by ~152 Bps on a QoQ basis. The company’s Turnkey margins remain at the same level of around 1% to 2%.
* In order to optimally utilize the huge cash balance available with the company, EIL has approved a buy back of shares @Rs. 84 per share. The total size of the buy back is ~Rs. 740 Cr (Incl. of taxes). GOI is also to participate in the buy back, however they are to maintain a 51% stake in the company.
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