Shares of Engineers India, a leading global engineering consultancy and EPC company, have performed exceptionally well over the last one-year period, rewarding their shareholders with a handsome return of 87.25%. During this period, the shares have grown from ₹58.75 apiece to their current position of ₹110.
After experiencing four consecutive years of losses from CY18 to CY21, the stock has shown a significant turnaround with a positive return of 12.65% in CY22. This positive momentum has continued into the current year, with the stock delivering an impressive return of 40% thus far.
On June 07, the stock rallied nearly 4% to mark a new 52-week high of ₹114.5 apiece after the company won multiple projects.
National Aluminium Company Limited (NALCO) has selected Engineers India Limited (EIL) to provide consultancy services for the update of a detailed project report (DPR) for Pottangi Bauxite Mines for enhancing raw-ore production.
Furthermore, Jindal Steel and Power (JSPL) and Engineers India have signed a contract for supply of basic and detailed engineering for direct reduction of the iron plant and associated facilities at Angul, Orissa.
According to the company's exchange filing, the total contract value for both projects amounts to ₹20.55 crore.
Meanwhile, in May alone, the stock skyrocketed nearly 34% after investors reacted positively to the company's Q4 performance. During the quarter, the company reported a robust 140% YoY rise in its consolidated net profit to ₹190 crore. During the same period of last year, the company recorded a net profit of ₹79 crore.
Its revenue from operations for the quarter reached ₹880 crore, 7.60% higher than the ₹818 crore generated in Q4 FY22. The revenue from its Turnkey Projects segment, which contributed more than 60% of the company's revenues in Q4, witnessed a 16% YoY growth to ₹494 crore.
Looking at the overall fiscal year 2022–23, the company achieved a net profit of ₹346 crore, marking a substantial improvement from the net profit of ₹140 crore in the previous fiscal year. The total revenue for FY23 stood at ₹3,330 crore, an increase of 14.60% from ₹2,913 crore recorded in FY22.
As of March 31, 2023, the company's order book stood at ₹90.8 billion (2.8x TTM revenue), considering go-ahead letters for orders worth ₹15.9 billion from clients in the turnkey segment, said domestic brokerage firm ICICI Securities.
Going ahead, the company continues to hold its yearly order inflow guidance of ₹40–50 billion, it added.
The brokerage believes that the company's capabilities position it favorably to secure execution orders as the capex cycle strengthens. With an improved order intake outlook and a strong cash-rich balance sheet, the brokerage maintains its 'buy' rating on the stock and has raised the target price to ₹130 apiece, up from ₹105 previously.
This target price reflects a potential upside of 18.45% from the stock's previous closing price of ₹109.75.
Engineers India is an engineering consultancy company providing design, engineering, procurement, construction, and integrated project management services, principally focused on the oil and gas and petrochemical industries in India and internationally.
The company is also expanding into new sectors such as green hydrogen, biofuels, coal gasification, fertilisers, and defence.
At the end of Q4FY23, the Indian government held 51.3% of the shares in the company, while foreign portfolio investors and domestic institutional investors each own 8% and 15.8%, respectively. Regular shareholders own 24.9%, Trendlyne data showed.
06 analysts polled by MintGenie on average have a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.