ICICI Direct has given Hold recommendation for Engineers India with a target price of Rs. 95 in its research report issued on Jun 14, 2021

ICICI Direct’s research report on Engineers India

Engineers India’s (EIL) standalone revenues for Q4FY21 came in at Rs 1116.7 crore, up 30.8% YoY, 33.5% QoQ. Consultancy and turnkey (LSTK) segment contributed 36% and 64%, respectively. For Q4FY21, consultancy revenue was up 0.8% to Rs 404.7 crore YoY, 13% QoQ. Turnkey revenue grew 57.5% YoY, 48.8% QoQ to Rs 712 crore owing to better execution. Absolute EBITDA came in at Rs 164 crore, up 47.7% YoY. Overall EBITDA margin came in at 14.7%, expanding 170 bps, YoY mainly on account of better margins in the turnkey segment amid higher revenue recognition. Consultancy and turnkey segments reported EBIT margins of 27.5% (vs. 34.2% in Q4FY20) and 5.6% (vs. 2.9% in Q4FY20), respectively. EBITDA margin for FY21 came in at 10.9%, declining 290 bps YoY. Adjusted PAT (ex-exceptional item) came in at Rs 139.1 crore, up 7.2% YoY, partly impacted by lower other income. It reported exceptional item worth Rs 155 crore as provision towards defaults of the investment made by EIL Employee PF trust.


We value core business at 10x P/E on FY23E EPS of Rs 8.0 and investments at book value multiple with revised target price of Rs 95/ share (earlier Rs 83). We maintain HOLD rating.