Engineer India Ltd - A good long term story

This call was also given earlier when the stock was trading @ 410/- and still we feel it to be a good long term story.


Engineers India Ltd
cmp:618
Traded in:Nse-bse

ENGINEERS INDIA (EIL) provides engineering and related technical services to petroleum refineries and other industrial projects.Apart from engineering consultancy, EIL also undertakes lump-sum turnkey projects (LSTK).

It mainly focuses on refineries and other petrochemical industries, which contribute almost 90% to its revenues. Despite its expertise in turnkey projects, its LSTK division has not grown at a rapid pace and most of the growth comes from the consultancy division. However, LSTK contributes nearly 50% to EIL''s current order book. The division is expected to start contributing to EIL''s growth once revenue from this segment starts reflecting in the company''s financials.

EIL''s engineering consultancy business is yet to catch the attention of most investors, as most of its peers are in the unlisted domain. This is because of limited investment in fixed assets, reducing the need for companies to go public.The public sector company is looking at the exports market, especially in the Middle East, more aggressively now, which also provides better margins.EIL is a major beneficiary of the existing shortage in refining capacity as investment in petroleum refining is likely to remain high for the next few years, domestically as well as globally. This is likely to translate into huge business opportunity for the company.

A must buy at dips for long term investors. Make it a part of your core portfolio.