Engineers India Ltd (EIL) has reported a 7.5% YoY increase in revenue growth to Rs8.6bn in Q4FY23, with order inflow coming in at Rs47bn for FY23. The company expects FY24 order inflows to be in the same range, with a focus on new verticals such as Hydrogen and Biofuel. EIL also aims to maintain Consultancy EBIT margin of 27% and Turnkey at ~3-4% for FY24.
EIL’s long term growth prospects remain strong due to a healthy order book, strong project pipeline, diversification into newer verticals, and a lean balance sheet. Revenue/PAT CAGR is expected to be 12.9%/25.5% from FY23 to FY25E.
In Q4FY23, standalone sales grew 7.5% YoY to Rs8.6bn, driven by turnkey projects which contributed 57.1%. Gross margin declined to 44.4% in Q4FY23 vs 47.8% in Q4FY22 factoring in business mix. EBITDA declined 22% YoY to Rs843mn, with EBITDA margin contracted 367bps YoY to 9.7%. Order book stands at Rs76.9bn, with major orders won in the Turnkey segment.
Overall, EIL’s outlook is positive, with the stock currently trading at PE of 14.7x/11.4x FY24/25E. The company has been focusing on diversification into newer verticals such as Hydrogen and Biofuel, and has a healthy order pipeline from the petrochemical segment.
