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    Engineers India

    ENGINERSINGood
    Construction·10 Feb 2025
    Management Summary

    Engineers India delivered a strong sequential performance in Q3 FY25, characterized by record-high order books and significant margin expansion in its core consultancy business. Management is aggressively diversifying into non-hydrocarbon sectors like infrastructure, data centers, and green energy while maintaining a robust bidding pipeline in domestic refining and petrochemicals. Despite some project-specific delays due to land issues, the company remains confident in sustaining its order intake momentum.

    Highlights

    8

    • All-time high order book of ₹11,353 crores as of Dec 31, 2024

    • Revenue for Q3 FY25 stood at ₹750 crores, up 11% QoQ

    • Profit After Tax (PAT) increased 11% QoQ to ₹88 crores

    • Operating profit surged 72% QoQ to ₹81 crores with margins expanding to 11% from 7%

    • Order inflow for 9M FY25 reached nearly ₹7,000 crores, a 130% YoY growth

    • Consultancy segment contributed ₹407 crores to revenue with ~20% margins

    • Turnkey (LSTK) segment contributed ₹343 crores with ~5-6% margins

    • Cash on books remains strong at approximately ₹1,000 crores

    What Changed1

    vs Q4 FY25

    Guidance items5 → 4 (-1)

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹750 Cr+11%QoQ
    2. 02Operating Profit₹81 Cr+72%QoQ
    3. 03PAT₹88 Cr+11%QoQ
    4. 04EBITDA₹128 Cr+16%QoQ
    5. 05Operating Margin11%

    Segment breakdown

    • Consultancy and Engineering₹407 Cr54.3%
    • Turnkey (LSTK)₹343 Cr45.7%
    Donut· Share of Revenue

    Guidance & targets

    4
    CategoryTargetPriority
    Revenue
    Annual Billing Turnover
    ₹3,500 crores
    		Medium
    Other
    Consultancy Order Intake Run Rate
    ₹4,000-5,000 crores
    		High
    Other
    Paradip PMC-2 Package Value
    ₹700 crores
    		High
    Margin
    Consultancy Segment Profit Margin
    20%
    		High

    Risks & concerns

    4
    RiskSeverity

    Land acquisition issues at CPCL Nagapattinam

    The expansion project is currently on hold due to land issues, delaying revenue booking. — Management acknowledged

    medium

    Uncertainty of West Coast Refinery project

    Management admits they do not see a future for this specific refinery at this point due to political/government decisions. — Both downplayed

    medium

    Cyclicality of Consultancy Margins

    Margins vary based on the stage of project execution, which can lead to quarterly fluctuations. — Management acknowledged

    low

    Areas of Evasion(1)

    • Slightly vague on the exact timeline for the BPC Andhra Pradesh major tender, citing it as 'next financial year or towards the end of this quarter'.

    Q&A highlights

    3

    “The PM package 1 on has been awarded to us recently... And package number two is expected to be awarded in next couple of weeks.”

    Confirms the conversion of L1 status into actual orders for a major petrochemical complex.

    asked by Mohit Kumar, ICICI Securities

    2 min read5 chapters

    Detailed Narrative

    01

    Record Order Book and Inflow Momentum

    Engineers India achieved an all-time high order book of ₹11,353 crores as of December 31, 2024. This was bolstered by a massive 130% YoY increase in order inflows during the first nine months of FY25, totaling nearly ₹7,000 crores. The order book is balanced between high-margin Consultancy (₹5,554 crores) and Turnkey/LSTK projects (₹5,799 crores), providing strong revenue visibility for the next 3-4 years.

    02

    Segment Margin Dynamics and Operating Leverage

    The company reported a significant expansion in operating margins to 11% in Q3 FY25, up from 7% in the previous quarter. Management highlighted that the Consultancy segment maintains sustainable margins of approximately 20%, while the Turnkey segment operates at 5-6%. The 72% QoQ jump in operating profit to ₹81 crores demonstrates strong execution and the benefit of a higher mix of consultancy work during the quarter.

    03

    Diversification into Sunrise Sectors

    EIL is actively reducing its dependence on the traditional hydrocarbon sector by expanding into infrastructure, metallurgy, and green energy. The infrastructure segment's contribution to assignments has grown from 25% to 44%. New focus areas include data centers, coal gasification, green hydrogen, and green ammonia, with active projects already underway for clients like NTPC and various steel manufacturers.

    04

    International Expansion Strategy

    The Abu Dhabi office is emerging as a key growth hub, consistently securing mid-sized consultancy projects from the ADNOC group. Management expects this office to grow further next year as they increase manpower and focus. While the Nigeria (Dangote) segment is currently focused on stabilization rather than expansion, EIL is aggressively bidding for new consultancy assignments in Algeria, Kuwait, and Bahrain to diversify its international revenue base.

    05

    Strategic Investment in Numaligarh Refinery (NRL)

    Management clarified its investment position in NRL, stating a total commitment of ₹835 crores (₹700 crores initial plus ₹135 crores additional). To date, approximately ₹800 crores has been paid, with only ₹35 crores remaining. This investment is part of EIL's broader strategy to participate in the capital requirements of key energy infrastructure projects in India.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.