Result Update: Engineers India Ltd - BUY - TP Rs.212 - Kotak

- EIL Q2FY18 outperformed our estimate due to 1/ strong execution in PMC division; 2/ higher operating margin supported by operating leverage and 3/ provision write back (one off items) in the LST division (Lump Sum Turnkey Project). Order inflows grew substantially in the quarter led by PMC orders; current order backlog stands at Rs 88.1 Bn (highest level ever) implying three year revenue visibility.

- We reiterate our long term positive view on EIL; expect significant improvement in FY19 earnings driven by 1) improved execution in 2HFY18-FY19 2) improved margins on back of operating leverage. We increase FY19 earnings estimate to factor in pick up in ordering/execution in domestic business and improved margins driven by operating leverage; value EIL at per 26x FY19 core earnings and maintain BUY rating with revised target price of Rs 212 (Rs 182 earlier).

Shares of ENGINEERS INDIA LTD. was last trading in BSE at Rs.185.15 as compared to the previous close of Rs. 187.35. The total number of shares traded during the day was 546408 in over 2383 trades.

The stock hit an intraday high of Rs. 188 and intraday low of 181. The net turnover during the day was Rs. 100902019.

Source : Equity Bulls

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