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http://www.kotaksecurities.com/pdf/dmb/MorningInsight12032012.pdf
ENGINEERS INDIA LTD (EIL)
PRICE: RS.273 RECOMMENDATION: BUY
TARGET PRICE: RS.320 FY13E P/E: 13.7X
Engineers India Ltd (EIL) is India's leading publicly held company engaged in
the areas of Hydrocarbon, metal and infrastructure consultancy. The
company has a healthy market share in the Hydrocarbon consultancy
segment and enjoys entrenched relationship with few of the major oil & gas
companies like HPCL, BPCL, ONGC and IOC. Driven by increased activity in
global energy scenario and rapid development in Indian Hydrocarbon space,
we believe that the company is well poised for 13% CAGR in net profits
between FY11-13E.
In our estimates, we project a 21% CAGR in consolidated revenues between
FY11-13E from Rs.28 bn in FY11 to Rs. 41.6 bn in FY13E. Within the revenue
streams, we expect consultancy & engineering business to grow at 6% CAGR
and Lumpsum turnkey project segment (LSTP) to grow at 30% CAGR
between FY11-13E mainly driven by 1) current order book at Rs 57 bn 2)
continued momentum in the domestic Hydrocarbon Industry mainly refining
and petrochemicals 3) pick up in investments in projects in power and
infrastructure space 4) company's new initiative adding to revenues and 5)
meaningful contribution from overseas Hydrocarbon markets mainly Middle
East.
At the current price, company's stock looks reasonably valued on a
discounted cash flow basis. We therefore initiate coverage on EIL stock with
a BUY rating and one year DCF based target price of Rs.320.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.kotaksecurities.com/pdf/dmb/MorningInsight12032012.pdf
ENGINEERS INDIA LTD (EIL)
PRICE: RS.273 RECOMMENDATION: BUY
TARGET PRICE: RS.320 FY13E P/E: 13.7X
Engineers India Ltd (EIL) is India's leading publicly held company engaged in
the areas of Hydrocarbon, metal and infrastructure consultancy. The
company has a healthy market share in the Hydrocarbon consultancy
segment and enjoys entrenched relationship with few of the major oil & gas
companies like HPCL, BPCL, ONGC and IOC. Driven by increased activity in
global energy scenario and rapid development in Indian Hydrocarbon space,
we believe that the company is well poised for 13% CAGR in net profits
between FY11-13E.
In our estimates, we project a 21% CAGR in consolidated revenues between
FY11-13E from Rs.28 bn in FY11 to Rs. 41.6 bn in FY13E. Within the revenue
streams, we expect consultancy & engineering business to grow at 6% CAGR
and Lumpsum turnkey project segment (LSTP) to grow at 30% CAGR
between FY11-13E mainly driven by 1) current order book at Rs 57 bn 2)
continued momentum in the domestic Hydrocarbon Industry mainly refining
and petrochemicals 3) pick up in investments in projects in power and
infrastructure space 4) company's new initiative adding to revenues and 5)
meaningful contribution from overseas Hydrocarbon markets mainly Middle
East.
At the current price, company's stock looks reasonably valued on a
discounted cash flow basis. We therefore initiate coverage on EIL stock with
a BUY rating and one year DCF based target price of Rs.320.
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