Result Update: Engineers India Ltd (EIL) – BUY – TP Rs.195 - Kotak

EIL reported Q4FY17 results, below estimates due to one off factors, adjusted for these costs result was higher than our estimates. Improved execution in PMC division and provision write back in LSTK (Lumpsun Turnkey Projects) led to PAT (net off one off costs) higher than our estimates. Order inflows remained encouraging in the quarter with order backlog at Rs 77 Bn implying three to four years revenue visibility.

We reiterate our long term positive view on EIL; however cut FY19 earnings estimate to factor in 1) execution of current order book commencing meaningfully from Q2FY18 onwards (thus believe that major growth would get reported in FY19 and beyond) and 2) moderate delays in Greenfield orders like Barmer refinery (not accounting for Maharashtra refinery currently). We value EIL at per 23x FY19 core earnings and main BUY rating with revised target price of Rs 195.

Shares of ENGINEERS INDIA LTD. was last trading in BSE at Rs.154.7 as compared to the previous close of Rs. 154.1. The total number of shares traded during the day was 230403 in over 2226 trades.

The stock hit an intraday high of Rs. 159 and intraday low of 152.6. The net turnover during the day was Rs. 35673151.

Source : Equity Bulls

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