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Key Highlights
~Strong Order Book
~Venturing into new business
~Long term track record with executing capability
~Strong Balance sheet
~ Exposure to high growth infrastructure space
~A zero debt player in infra space
Company Background
Engineers India Limited provides engineering and related
technical services for petroleum refineries and other
industrial projects primarily in India. Its field of activities
include petroleum refineries, pipelines, oil and gas
processing projects, petrochemical projects, offshore
structures and platforms, ports and terminals, metallurgy,
fertilizers, power, highways and bridges, airports, non
conventional/renewable energy sources, and intelligent
buildings and urban development. The company offers
various services to conceptualize, design, engineer, and
construct projects to meet the specific requirements of its
clients. The Company is also a primary provider of
engineering consultancy services for the Government of
India’s energy security initiative under its Integrated
Energy Policy for strategic crude storages.
Valuation
A robust balance sheet along with strong order book over
Rs. 9000 crs translates into a 3.3x and 2.7x of order book
to sales ratio for FY11E and FY12E respectively.
Historically, EIL is trading 3.25-3.5x on forward order book
to sales which gives fair value range is of Rs. 350.
Key Highlights
Revenue Visibility with Strong Order Book
Engineers India has a current order book over Rs.9,000
crore. Total order inflow in Q3FY11 stood worth Rs.3,800
crore as compared to Rs.1,522 crore orders in Q3FY10 up
by 150%. Total order inflow for 9MFY11 stood at Rs.
3800crore against 9MFY10 Rs. 1522 crore up by almost
150% and for Q3FY11 it stood at Rs19bn.
Venturing into new business
The company is exploring opportunity in other areas to
diversify into infrastructure, water and waste water
management, nuclear power, and city gas distribution
projects. Company has recently awarded some project in
this area.
EIL is involved in Yamuna abatement plan, which is a
Rs.1,800 crore project. Under this, 70% of Delhi’s area has
been earmarked to EIL. The Yamuna river that flows
through the Capital is widely used as a dump for untreated
sewage and industrial effluents.
EIL is also doing a water project for the Bhilai municipal
authority and are in talks with other municipalities such as
Ludhiana for similar projects.
EIL recently signed a memorandum of cooperation with
state-run Nuclear Power Corp. of India Ltd for the
execution of such projects. We have a nuclear power
capacity of 4,560MW, is targeting a 63GW capacity by
2032. EIL is also interested in taking equity stakes in city
gas distribution projects and plans to bid for these along
with Gujarat State Petroleum Corp. Ltd. The company also
plans to refocus on the fertilizer plant business. Though,
EIL has set up eight fertilizer projects, it has been
concentrating on the hydrocarbon value chain and built its
expertise in refinery engineering
Long term track record with successful project
execution
Engineers India has 45 years of track record of successful
project execution capability. Company is rewarded with
Mini Navratna by Government of India.
It has provided a range of engineering consultancy and
project implementation services on more than 49 refinery
projects, including 8 green field refinery projects, 7
petrochemical complexes, 35 oil and gas processing
projects and 205 offshore platforms projects.
It has strategic alliances with VAI Industries UK Limited;
Deutsche Montan Technologies GmbH; Curtin University
of Technology; IOCL; Petron Scientech Inc.; Stroytransgaz;
GAIL India Limited; and Jacobs Engg.
Strong Balance Sheet
Every Year Company is able to increase both top line and
bottom line consistently. Company’s order book is
improving YOY which helps it to increase top line and
bottom line. Net revenue has increased more than 400%
from 2007 to 2010.PAT has grown 47% CAGR from 2007 to
2010. We expect the company will maintain the
momentum going forward also.
The biggest advantage of EIL is ZERO debt in its book
which helps company to maintain PAT level margin. EIL is
consciously improving Return on Net worth, it has moved
from 13% in 2006-07 to 32% in 2010-11.
Exposure to high growth infrastructure Space
EIL is well positioned to benefit from increased
infrastructure investment. Company is well
established player in building refineries, strategic
storages, turnkey project, and consultancy. We
expect government thrust on infrastructure space
to continue will make Engineers India wealth
creator for long term investor.
Valuation
A robust balance sheet along with strong order book over
Rs. 9000 crs translates into a 3.3x and 2.7x of order book
to sales ratio for FY11E and FY12E respectively.
Historically, EIL is trading 3.25-3.5x on forward order book
to sales which gives fair value range is of Rs.350.
Concerns
On time Order book execution.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key Highlights
~Strong Order Book
~Venturing into new business
~Long term track record with executing capability
~Strong Balance sheet
~ Exposure to high growth infrastructure space
~A zero debt player in infra space
Company Background
Engineers India Limited provides engineering and related
technical services for petroleum refineries and other
industrial projects primarily in India. Its field of activities
include petroleum refineries, pipelines, oil and gas
processing projects, petrochemical projects, offshore
structures and platforms, ports and terminals, metallurgy,
fertilizers, power, highways and bridges, airports, non
conventional/renewable energy sources, and intelligent
buildings and urban development. The company offers
various services to conceptualize, design, engineer, and
construct projects to meet the specific requirements of its
clients. The Company is also a primary provider of
engineering consultancy services for the Government of
India’s energy security initiative under its Integrated
Energy Policy for strategic crude storages.
Valuation
A robust balance sheet along with strong order book over
Rs. 9000 crs translates into a 3.3x and 2.7x of order book
to sales ratio for FY11E and FY12E respectively.
Historically, EIL is trading 3.25-3.5x on forward order book
to sales which gives fair value range is of Rs. 350.
Key Highlights
Revenue Visibility with Strong Order Book
Engineers India has a current order book over Rs.9,000
crore. Total order inflow in Q3FY11 stood worth Rs.3,800
crore as compared to Rs.1,522 crore orders in Q3FY10 up
by 150%. Total order inflow for 9MFY11 stood at Rs.
3800crore against 9MFY10 Rs. 1522 crore up by almost
150% and for Q3FY11 it stood at Rs19bn.
Venturing into new business
The company is exploring opportunity in other areas to
diversify into infrastructure, water and waste water
management, nuclear power, and city gas distribution
projects. Company has recently awarded some project in
this area.
EIL is involved in Yamuna abatement plan, which is a
Rs.1,800 crore project. Under this, 70% of Delhi’s area has
been earmarked to EIL. The Yamuna river that flows
through the Capital is widely used as a dump for untreated
sewage and industrial effluents.
EIL is also doing a water project for the Bhilai municipal
authority and are in talks with other municipalities such as
Ludhiana for similar projects.
EIL recently signed a memorandum of cooperation with
state-run Nuclear Power Corp. of India Ltd for the
execution of such projects. We have a nuclear power
capacity of 4,560MW, is targeting a 63GW capacity by
2032. EIL is also interested in taking equity stakes in city
gas distribution projects and plans to bid for these along
with Gujarat State Petroleum Corp. Ltd. The company also
plans to refocus on the fertilizer plant business. Though,
EIL has set up eight fertilizer projects, it has been
concentrating on the hydrocarbon value chain and built its
expertise in refinery engineering
Long term track record with successful project
execution
Engineers India has 45 years of track record of successful
project execution capability. Company is rewarded with
Mini Navratna by Government of India.
It has provided a range of engineering consultancy and
project implementation services on more than 49 refinery
projects, including 8 green field refinery projects, 7
petrochemical complexes, 35 oil and gas processing
projects and 205 offshore platforms projects.
It has strategic alliances with VAI Industries UK Limited;
Deutsche Montan Technologies GmbH; Curtin University
of Technology; IOCL; Petron Scientech Inc.; Stroytransgaz;
GAIL India Limited; and Jacobs Engg.
Strong Balance Sheet
Every Year Company is able to increase both top line and
bottom line consistently. Company’s order book is
improving YOY which helps it to increase top line and
bottom line. Net revenue has increased more than 400%
from 2007 to 2010.PAT has grown 47% CAGR from 2007 to
2010. We expect the company will maintain the
momentum going forward also.
The biggest advantage of EIL is ZERO debt in its book
which helps company to maintain PAT level margin. EIL is
consciously improving Return on Net worth, it has moved
from 13% in 2006-07 to 32% in 2010-11.
Exposure to high growth infrastructure Space
EIL is well positioned to benefit from increased
infrastructure investment. Company is well
established player in building refineries, strategic
storages, turnkey project, and consultancy. We
expect government thrust on infrastructure space
to continue will make Engineers India wealth
creator for long term investor.
Valuation
A robust balance sheet along with strong order book over
Rs. 9000 crs translates into a 3.3x and 2.7x of order book
to sales ratio for FY11E and FY12E respectively.
Historically, EIL is trading 3.25-3.5x on forward order book
to sales which gives fair value range is of Rs.350.
Concerns
On time Order book execution.
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