Buy Engineers India; target of Rs 328: Prabhudas Lilladher

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Engineers India's strong Q2 results were driven by a robust order intake of INR69.1bn, including the INR44bn Dangote order, and a favourable consultancy mix of 75%, supporting margin resilience.
  • The company's order book stands at INR204.2bn, providing strong revenue visibility, with consultancy accounting for ~75% of the current order book and overseas projects contributing ~55-60%.
  • Management expects FY27 revenue of INR42-43bn, with ~60% contribution from consultancy, and ~10% growth in FY28, driven by a strong order book and improving traction in Africa.
  • The company is diversifying beyond hydrocarbons into infrastructure, fertilisers, ferrous and non-ferrous metals, and strategic storage, with infrastructure currently contributing ~20-25% of order inflows.

Thesis Validation Checklist

  • Investors should watch for order intake growth, particularly from consultancy and overseas projects, to validate the thesis.
  • Margin expansion, driven by a favourable consultancy mix and improving execution of LSTK projects, is another key signal.
  • The company's ability to diversify beyond hydrocarbons and execute on its growth strategy in infrastructure, fertilisers, and other segments will be crucial to sustaining growth momentum.
  • Geopolitical uncertainty in the Middle East and potential delays in project capex decisions pose risks to the thesis, but the company's strong order book and diversification efforts mitigate these risks.