1
Please refer to important disclosures at the end of this report
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1
Engineers India Limited (EIL) is a consultancy and engineering(C&E),
procurement and construction (EPC) company in the hydrocarbons and
petrochemicals industry. EIL currently holds 26 technology patents including
18 live patents for such process technologies and patents for another 24
technologies are awaited. During the past 3 years the company has
increased its focus on the services, i.e. Consultancy and Engineering services
(C&E), with better margins. The share of the C&E services in total sales of the
company has increased from 55.51% in FY15 to 66.67% in FY16 and further
to 80.43% in FY17. The revenue from the C&E services is also increasing
from `954cr in FY15 to `1165cr in FY17 at a CAGR of 10.6%. The
increased focus of the company on higher profitability segments has resulted
in increase in overall Operating Margin of the company from 24.78% in
FY15 to 31.65% in FY17. Average working capital cycle of EIL reduced from
34 days in FY16 to 29 days in FY17. It is virtually debt free company.EIL has
healthy dividend payout (average payout of 48.7% over past 5 years) and
cash balance of `2135.6cr as on March 31, 2017 (`2563.85cr as on March
31, 2016). With a strong order backlog (`8881cr) and favourable business
mix (consultancy 54% and turnkey 46%), we expect EIL to clock healthy
EBITDA margins going forward. Hence BUY.
BUY
CMP `205
1.0
Reuters Code
ENGI.NS
ENGR:IN
5
BSE Sensex
33,920
Nifty
10,486
Face Value (`)
Consultancy services
Market Cap (` cr)
12,799
52 Week High / Low
206.2/140.95
Avg. Daily Volume
229,227
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Engineers India Ltd
Others | Consultancy Services
Dec 22, 2017
2
Engineers India Ltd |Consultancy Services
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Engineers India
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)