Price ` 128 Fair Value 165 Upside 29% Div Yield 3.14% Tenure 1 Year Sensex 35217.11 Nifty 10671.40 Group/Index M.cap (` in cr) 8057 Equity (` In cr) 315.96 52 wk H/L ` 206.20/122.75 Face Value ` 5 NSE code ENGINERSIN BSE code 532178 RONW 16% P/E 21.61 P/BV 3.44 EV/EBIDTA 9.34 IN ` EV (`in cr) 5532.00 BV (`in cr) 37.05 NW(`in cr) 2341.22 EPS (TTM) 5.90 Dividend Distribution (Consolidated) (INR mn) Source: Google Key Valuation Ratios Also, is looking at some mid size orders from BPCL for small scale expansions in their Mumbai and Kochi refineries. Bina is also expected to expand from 7.8 to 15 MMTPA. As of now the timelines of these projects have not yet been finalized, but the DFRs have been approved by their board. EIL expects at least two of these five to six projects to materialize this year and can have similar order inflows in the consulting segment as seen in this year and on the EPC segment side, may see a large inflow in the current year also. "So we are now opening up our sales initiatives in these countries and fortunately we have been qualified for a number of major assignments as a PMC consultant." said the management. With strong financials, higher EBITDA Margins Breakthrough Orders Sufficient cash Strong balance sheet with strong financial position Strong International pipeline Debt free company Healthy PAT , EIL is expected to deliver a good set of numbers & robust performance, going forward. While the company did not see a very high order book in the last few years, but possibly things are picking up now for EIL & should be able to deliver a good set of numbers going forward. FUNDAMENTAL COVERAGE - ENGINEERS INDIA LTD. Dated : 27th June 2018 BUY Investment Rationale Bestowed with Strong Order book, Robust PAT INVESTMENT RESEARCH Key Financial Data Share Holding Pattern On the international front in the current year, company is looking forward at some potential orders from Middle East majorly Abu Dhabi region, Oman, Bahrain and Kuwait. For the last two years because of the fall in the crude oil prices most of the clients in the Middle East had put on hold their investments in Greenfields and Brownfields, they were only going for revamp assignments. Of late as the prices have revived, and the Clients have started giving expression of interest for major and mega assignments as well to the company. Now, with the PTR of Dangote and the Greenfield projects that the company is doing in India as of now, it gets qualified for these projects. Although decline in the crude oil prices have impacted the overseas order inflows. So this year might still be muted, but next year can show some good potential returns and an average project could be in the range of $25 to $50 million like could secure in these regions. Stock Details The company has recovered order inflows of `1660 Crores in consulting for 79 in EPC totaling to ` 2140 Crores. Major orders secured during the year is polymer addition project of over ` 1000 Crores and two EPC projects from ONGC worth `235 Crores and `244 Crores. The order book position as on March 31, 2018 stands at `7873 Crores compared to `7762 Crores last year. The mix is quite similar to the mix of last year itself 53% consulting and 47% EPC. Strong International Order pipeline EIL is looking at a big order from Rajasthan refinery project, possibility will have both consulting and EPC orders from there. Besides that, some of the projects, which are being targeted for next two years are Panipat Refinery expansion from 15 to 25 MMTPA, the Cauvery Basin Refinery of CPCL (this is a 9 MMTPA refinery) and Numaligarh Refinery Expansion. A / S&P BSE 200 52% 48% Promoter Public Page 1 www.rudrashares.com
Transcript
Price ` 128
Fair Value 165
Upside 29%
Div Yield 3.14%
Tenure 1 Year
Sensex 35217.11
Nifty 10671.40
Group/Index
M.cap (` in cr) 8057
Equity (` In cr) 315.96
52 wk H/L ` 206.20/122.75
Face Value ` 5
NSE code ENGINERSIN
BSE code 532178
RONW 16%
P/E 21.61
P/BV 3.44
EV/EBIDTA 9.34
IN `
EV (`in cr) 5532.00
BV (`in cr) 37.05
NW(`in cr) 2341.22
EPS (TTM) 5.90
Dividend Distribution (Consolidated) (INR mn)
Source: Google
Key Valuation Ratios
Also, is looking at some mid size orders from BPCL for small scale expansions in their Mumbai
and Kochi refineries. Bina is also expected to expand from 7.8 to 15 MMTPA. As of now the
timelines of these projects have not yet been finalized, but the DFRs have been approved by
their board.
EIL expects at least two of these five to six projects to materialize this year and can have similar
order inflows in the consulting segment as seen in this year and on the EPC segment side, may
see a large inflow in the current year also.
"So we are now opening up our sales initiatives in these countries and fortunately we have been
qualified for a number of major assignments as a PMC consultant." said the management.
With strong financials, higher EBITDA Margins Breakthrough Orders Sufficient cash
Strong balance sheet with strong financial position Strong International pipeline Debt free
company Healthy PAT , EIL is expected to deliver a good set of numbers & robust performance,
going forward.
While the company did not see a very high order book in the last few years, but possibly things are
picking up now for EIL & should be able to deliver a good set of numbers going forward.
FUNDAMENTAL COVERAGE - ENGINEERS INDIA LTD.
Dated : 27th June 2018
BUY Investment Rationale
Bestowed with Strong Order book, Robust PAT
INVESTMENT RESEARCH
Key Financial Data
Share Holding Pattern
On the international front in the current year, company is looking forward at some potential orders from
Middle East majorly Abu Dhabi region, Oman, Bahrain and Kuwait. For the last two years because of
the fall in the crude oil prices most of the clients in the Middle East had put on hold their investments in
Greenfields and Brownfields, they were only going for revamp assignments. Of late as the prices have
revived, and the Clients have started giving expression of interest for major and mega assignments as
well to the company. Now, with the PTR of Dangote and the Greenfield projects that the company is
doing in India as of now, it gets qualified for these projects.
Although decline in the crude oil prices have impacted the overseas order inflows. So this year might
still be muted, but next year can show some good potential returns and an average project could be
in the range of $25 to $50 million like could secure in these regions.
Stock Details
The company has recovered order inflows of `1660 Crores in consulting for 79 in EPC totaling to ` 2140
Crores. Major orders secured during the year is polymer addition project of over ` 1000 Crores and
two EPC projects from ONGC worth `235 Crores and `244 Crores. The order book position as on
March 31, 2018 stands at `7873 Crores compared to `7762 Crores last year. The mix is quite similar to
the mix of last year itself 53% consulting and 47% EPC.
Strong International Order pipeline
EIL is looking at a big order from Rajasthan refinery project, possibility will have both consulting
and EPC orders from there.
Besides that, some of the projects, which are being targeted for next two years are Panipat
Refinery expansion from 15 to 25 MMTPA, the Cauvery Basin Refinery of CPCL (this is a 9 MMTPA
refinery) and Numaligarh Refinery Expansion.
A / S&P BSE
200
52%48%
Promoter Public
Page 1 www.rudrashares.com
Key Highlights
Over 5000 Projects worth 200 Bn USD executed.
Five decades of experience on landmark projects
Significant track record across entire oil & gas value chain
In-house and collaborative R&D (25 registered patents)
Zero debt firm
Technology at the forefront of Consultancy Services
Developed more than 30 process technologies
25 live Patents, 23 pending patent applications
Technology collaboration with IOCL/Indian Institute of Petroleum
43 Oil & Gas Processing Projects
75 major Refinery Projects including 10 Green-field projects
11 Petrochemical Complexes
213 Offshore Projects including Process Platforms
10 Fertilizer Projects
38 Infrastructure Projects
24 Turnkey Projects
Power / Captive Power Projects
Strategic Storages
32 Mining & Metal Projects
14 Ports & Storage Terminals
47 Pipeline Projects
Growth Strategies
to Focus on Hydrocarbon Core & Pursue OBE contracts
Consolidate presence in Middle East Asia, Africa and Bangladesh
Leverage track record for related diversification
Collaborative Technology Development & Alliances for Diversification
Business Secured- Standalone Order Book – Standalone` in Mn ` in Mn
Installed 10 out of the 11 megapetrochemical complexes in
India
RUDRA SHARES &
STOCK BROKERS LTD.
Maintain Leadership
Engineered 10 grass-rootrefineries
Built combined refiningcapacity of more than 150
MMTPA (3 million BPD) in India
20 out of 23 Refineries in Indiahave EIL Footprints
Forayed into new areas such asunderground caverns for
storages
Equity Participation in select assets & Explore sweat equity options for select
projects
Milestones Achieved
Asset Ownership
Alliances
Expand international
operations
Selectively diversify
Page 2 www.rudrashares.com
Major ongoing projects
RUDRA SHARES &
STOCK BROKERS LTD.
Page 3 www.rudrashares.com
FY 17-18 Performance
INRmn INRmn
** As per IND AS
Source: company's PPT
(INR mn)
REVENUE FROM CONSULTANCY & ENG.(Consolidated)
INRmnREVENUE FROM TURNKEY PROJECTS
(Consolidated) INRmn
The company has registered a turnover of ` 1788 Crores during FY2017-2018, which is an increase of 23%
over the last year’s turnover of ` 1449 Crores. It has registered growth in both the segments.
In the consulting segment the turnover is `1379 Crores as against `1165 Crores in the previous year, which
is an increase of 18% since last year. In turnkey segment the turnover for FY2017-2018 is `408 Crores,
again there is an increase of 44% as compared to `284 Crores last year. Likewise have registered
operating profit of `389 Crores as against `277 Crores in the previous financial year, which shows a growth
of around 40%. Operating margins registered during the year is 22% as against 19% in the previousyear.The PAT for the current fiscal FY2017-2018 is `378 Crores as against `325 Crores in previous year, an
increase of 16%.
TOTAL INCOME(Consolidated) REVENUE SEGMENTATION(consolidated)
RUDRA SHARES &
STOCK BROKERS LTD.
Standalone FY2017-18 Results
Page 4 www.rudrashares.com
Estimating the share price of the company as per P/E valuation, the Fair value of the share for next 1 year
tenure turns around to be ` 165. We recommend BUY on this script.
Company Overview
Valuation Conclusion
SMART Cities Investment outlay of Rs 200,000 Cr for 100 SMART cities EIL is empanelled with MOUD for consultancy services
Renewable & Alternative Fuels
~17% CAGR increase in other RES installed capacity by 2027 175 GW of renewable energy by 2022 & GOI mandate to implement E5/E10/E20 by 2022–– Cabinet Approval of National Policy on Biofuels-2018
Airports 22 % growth in domestic passenger traffic in FY 16-17 UDAN Scheme launched successfully
Water & Waste Water Management
Ports & Terminals SAGARMALA Initiative to harness port led development along with coastal shipping and IWT LNG Ecosystem ; Imperative for a Gas based Economy
Institutional Buildings
Enhanced Investment outlay owing to reforms Educational Sector: New IITs–– Health Care Sector: New AIIMS & Similar Hospitals
One of India’s leading Engineering Consultancy and EPC companies in Hydrocarbons and Petrochemicals.
Over five decades of experience on landmark projects with global energy majors.
Significant track record across entire Oil & Gas value chain.
also diversified into sectors like infrastructure, water and waste management, solar & nuclear power and
fertilizers to leverage its strong technical competencies and track record.
Over 2400 highly experienced professionals and technical workforce.
In-house and collaborative R&D support.
The company’s overseas presence is marked by an engineering office in Abu Dhabi, which caters to the
business needs in UAE/Middle-East region. Additionally, there are offices in London, Milan and Shanghai to
coordinate the activities of international procurement and marketing.
Zero debt firm with track record of healthy earnings and consistent dividend payout.
EIL is emerging up with the lot many opportunities in various segments. Some big projects, particularly in the
refining segment, some creep expansions, etc, at various stages for where company did a lot of initial work. There is
likelihood of number of these opportunities maturing & company is positive about delivering good set of numbers
ahead.
Moreover, EIL is looking at a big order from Rajasthan refinery project, possibility will have both consulting and EPC
orders from there.
Besides that, some of the projects, which are being targeted for next two years are Panipat Refinery expansion
from 15 to 25 MMTPA, the Cauvery Basin Refinery of CPCL (this is a 9 MMTPA refinery) and Numaligarh
Refinery Expansion.
Considering strong order book, zero debt, crop up of major orders in pipeline, healthy earnings, consistent
dividend payouts, emerging opportunities in various segments, focused on diversification into various
sectors attracts the company's share price.
Opportunities In Diversified Sectors
The allocation towards capital expenditure in the railway sector will increase from ` 40,000 in
2015-16 to about ` 1,18,000 Cr by 2019-20 thereby increasing its share in total expenditure to
4.3%Railways
RUDRA SHARES &
STOCK BROKERS LTD.
Projected Investment Potential of about Rs 2,00,00 Cr by 2022 Existing WWTP’s, ETP’s need refurbishment in Tier II & Tier III Cities
Page 5 www.rudrashares.com
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6) Other Disclosures:
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RUDRA SHARES &
STOCK BROKERS LTD.
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Phone: +91 – 512 – 67011055-54
RUDRA SHARES &
STOCK BROKERS LTD.
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