Engineers India Q2 Results Review - Mixed Set Of Numbers; Margins To Pickup In H2: Yes Securities

Yes Securities Report

Engineers India Ltd. reported a muted set of numbers, primarily led by weak execution in the consultancy segment (down 2% YoY) while turnkey segment reported 47% YoY growth.

Gross margin contracted ~1100 basis points YoY which led to Ebitda margin contraction of ~400 bps YoY at 5.4%.

Order inflows at Rs 3.4 billion declined 71% YoY. As on Q2 FY23 order book stands at ~Rs 84.3 billion (2.7 times trailing twelve months revenue), providing revenue visibility for next few quarters.

Going forward, management maintained FY23 revenue growth guidance of 15% and order inflows at ~Rs 40 billion.

We believe Engineers India’s healthy order book, lean balance sheet, strong project pipeline and strong growth visibility augurs well in the long run and expect the company to report revenue/profit after tax compound annual growth rate of 5%/51% over FY22‐FY25.

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