Are you looking for stock in which the chances of decline are less? Your answer is yes, then you can invest in the shares of Engineers India. It has low downside risk. Increasing the focus on nuclear and clean energy can cause re-painting of this stock. The company’s orderbook is strong. Excoction capability is good. The company is diverting its business.
In view of the Order Book of about Rs 12,000 crore by Engineers India, the picture is clear about its revenue in the next three to four years. The company’s revenue growth was good in the June quarter. It increased by 40 percent year on a year -on -year basis. Abidta margin was 8 percent. The company’s operating profit witnessed an increase of 41 percent. Consultancy Business Engineers is the most important for India. The margin in this business is about 17 percent.
The management of the company believes that margin in consultancy business may remain 20-25 per cent in medium term. The company’s margin is also 5-7 per cent in turnky projects, while the margin is usually low in such projects. The company has increased the focus on diversification. Now about 40 percent of the company’s revenue comes from the non-hydrogen segment. The company is entering the nuclear sector. It has achieved a contract from NPCIL.
Entering the nuclear sector will not only help the company in diversification of its business but will also support growth. There is a lot of potential in long -term in this business. The role of clean energy, infrastructure and foreign markets may increase in increasing the growth of Engineers India. So far this year, the company has acquired international orders worth about Rs 950 crore. Middle-East remains the most likely area for the company.
There are good opportunities in refinery and petrochemicals in the domestic market for Engineers India. The management of the company has estimated the revenue growth of 15 per cent in this financial year. If the pace of examination increases, then this growth can remain more. The company has set a target of turnover of Rs 5,000 crore by FY28. This shows the company’s strong confidence. It has a cash of Rs 1,100 crore. The company is continuously giving good dividend, which shows the strength of its balance sheet.
FY27 estimates in Engineers India shares are trading at about 15 times the estimated earnings. Good earnings are expected further. So this valuation seems fine. The company is focusing on diversification. It will also benefit in medium term. In the last 6 months, this stock has climbed more than 16 percent. On August 22, the shares were dropped by 1.57 per cent in the afternoon to Rs 192.15.