We had recommended Engineers India in volume 31 issue no. 26 dated November 28 - December 11, 2016, under the ‘Choice Scrip’ section when the scrip was trading at ₹138.12 per share. Our recommendation was based on the company’s foray into international hydrocarbon market and big ticket orders from Middle East and North America, strong financial performance and high growth prospects.
Engineers India is one of the leading engineering consultancy and EPC companies with its primary focus on the hydrocarbon sector. The company’s segments include consultancy and engineering projects and turnkey projects. The company’s services include technologies, pre-front end engineering design (PRE-FEED) and FEED, project management, procurement services, construction services and specialized services. The company focuses on various sectors, including fertilizer and liquefied natural gas (LNG), non-ferrous metallurgy, infrastructure, strategic crude oil storage, nuclear and solar energy, and exploration and production. It also provides various technologies for petroleum refining, oil and gas processing, and aromatics.
On the financial front, Engineers India posted a 9.81 per cent increase in its net sales to ₹375.36 crore in the second quarter of FY18 as against ₹341.82 crore in the same quarter of the previous year. The company’s PBIDT stood at ₹81.74 crore in Q2FY18, higher by 11.49 per cent on a yearly basis. The company’s PAT increased to ₹81.38 crore in Q2FY18, higher by 1.34 per cent on a year-on-year basis.
On an annual basis, the net sales of the company declined 4.13 per cent to ₹1,448.64 crore in the FY17 as against ₹1,511.02 crore in FY16. The company’s PBIDT increased 53.25 per cent to ₹302.20 crore in FY17 on a yearly basis. The company’s profit after tax grew 17.69 per cent to ₹325 crore in FY17 as against ₹276.19 crore in the previous fiscal.
After our recommendation the scrip has witnessed a hike of nearly 8 per cent and is trading at ₹151.70 per share. The growth of the stock is slow and is expected to remain the same in the next few quarters. We recommend our reader-investors to book profit at the current levels.