Engineers India – Q2 FY20 (Unaudited – Cons.)
Share price – 110
Total revenue from operations at 730.3 Cr
689.7 Cr (5.92%) YoY | 742.6 Cr (-1.62%) QoQ
Half year revenue: 1,473 Cr Vs. 1,272 Cr (16.72%)
Net Profit of 66.58 Cr
96.44 Cr (-31.43%) YoY 125.72 (-47.27%) QoQ
Half year ending Net Profit: 192.31 Cr Vs. 185.91 Cr (3.72%)
EPS (in Rs.) 1.05
1.52 YoY | 1.99 QoQ
Half Year ending EPS: 3.04 Vs. 2.94
View: Result is down and below expectation. However YoY revenue marginally increased but profit significantly decreased due to higher of direct cost.
Business Highlights & Updates:
Company is primarily into two operating segment viz. Consultancy & Engineering Projects – 49% and Turnkey Projects – 51%. YoY topline growth for Consultancy & engineering – 6% and Turnkey – 6%. YoY bottom line growth for Consultancy & engineering – (1%) and Turnkey – 64%.
Q2FY20 EBITDA is around INR 172.3 Cr Vs. 153.9 Cr in Q2FY19. H1FY20 EBITDA is around INR 372.6 Cr Vs. 296.5 Cr in H1FY19.
Government of India, has sold 31,59,269 equity shares of lhe parent company to the AMC to the Bharat 22 ETF on 10th Oct, 2019 , Pursuant to above, Government of India (Promoter) Shareholding was reduced from 52.00% to 51.49%.
ROE and ROCE is around 18% and 25% respectively and book value per share is around INR 36 and share is currently trading at 3.1x of its book value. Company is currently trading at annualized PE of around 19 which is slightly high as per Industry benchmark. Promoter is Govt of India and hold around 52% in the company, FIIs and mutual fund hold around 7.8% and 18.1% in the company. The good thing is company is virtually debt free and paying dividend around INR 4 per share and increased in YoY. Their concern area is operating profit margin is highly volatile.
Share price high 130 and now 110. Engineers India Limited is a Navratna public-sector undertaking of the Government of India under the Ministry of Petroleum and Natural Gas. It was set up in 1965 to provide engineering and related technical services for petroleum refineries and other industrial projects.
Due to highly competitive industry and many private player in this field the high margin business is challenging situation.
As per the company outlook and benefit of experienced PSU tag the company can sustain at current market price. Although return shouldn’t expected a higher level.
Current price can hold.
Risk: High Volatile market and current business module.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.