Buy Engineers India, target price Rs 95: ICICI Securities

ICICI Securities has given a buy rating to Engineers India with a target price of Rs 95. The share price moved up by 0.48 per cent from its previous close of Rs 62.90. The stock’s last traded price is Rs 63.20.

Engineers India Ltd., incorporated in the year 1965, is a Mid Cap company (having a market cap of Rs 4009.48 Crore) operating in Services sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 474.50 Crore, down 45.10 % from last quarter Sales of Rs 864.38 Crore and down -36.11 % from last year same quarter Sales of Rs 742.66 Crore Company reported net profit after tax of Rs 49.50 Crore in latest quarter.

Investment Rationale
The brokerage factors-in 17.6% decline in revenues due to 15% decline in consultancy and 20% decline in LSTK. EBIDTA margin is expected to shrink 620bps YoY to 8.6% due to the overall increase in fixed costs and higher mix of low-margin LSTK under execution (54% of current overall orderbook of Rs92bn).

Promoter/FII Holdings
Promoters held 51.50 per cent stake in the company as of March 31, 2020, while FIIs held 7.59 per cent, DIIs 25.51 per cent and public & others 15.4 per cent.