Buy Engineers India - Motilal Oswal

Engineers India Ltd. ( ENGR.IN; Mkt Cap USD 2104m, CMP Rs 285, Buy )

Engineers India results were in line with our estimates.

Revenues grew by 37% aided by a 70% growth in the Projects business on account of a healthy backlog.

Operating profits grew by 23% due to higher revenue contribution from the low margin projects business.

Other Income dipped on account of lower interest income due to a onetime special dividend. This depressed profit growth to 10%.

The stock continues to be attractive with an order backlog of Rs. 8300 cr and Rs. 750 cr of orders in the pipeline resulting in healthy earnings visibility, healthy return ratios with ROE upwards of 35% and large cash per share (Rs. 53). The stock has corrected with the market and is even more attractive as compared to when we had initiated coverage. We reiterate our BUY on the stock for a target price of Rs.405.

Source : Equity Bulls

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