Buy Engineers India, target price Rs 116: ICICI Securities

ICICI Securities has buy call on Engineers India with a target price of Rs 116. The current market price of Engineers India Ltd. is Rs 84.85 Time period given by analyst is one year when Engineers India Ltd. price can reach defined target.

Engineers India Ltd., incorporated in the year 1965, is a Mid Cap company (having a market cap of Rs 4937.54 Crore) operating in Services sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 1171.75 Crore, up 31.03 % from last quarter Total Income of Rs 894.30 Crore and up 25.90 % from last year same quarter Total Income of Rs 930.74 Crore. Company reported net profit after tax of Rs 31.41 Crore in latest quarter.

Investment Rationale
EIL has a strong balance sheet with net cash of Rs15.3bn, despite Rs7bn investment in Numaligarh and ~Rs6.5bn of buyback. Company has witnessed improvement in cashflows and reduction in working capital. Given the investment in various assets and the cash balance, the brokerage have valued the core profit separately and added back the cash and the investments in Numaligarh and fertiliser business. RoEs are expected to trend high due to lean balance sheet and free cashflows, which are set to be positive.

Promoter/FII Holdings
Promoters held 51.3 per cent stake in the company as of March 31, 2021, while FIIs held 7 per cent, DIIs 15.7 per cent and public and others 26 per cent.

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