Thursday, July 10, 2008

Engineers India Limited:

© EIL, 90.4% owned by government (becomes preferred vendor by oil & gas PSUs), provides high-end engineering services under Project Management Consultancy and Lump Sum Turnkey Contracts to refineries, petrochemical complexes, offshore oil & gas, pipelines, fertilisers, power, ports & terminals and metallurgy.

© High quantum of capex in hydrocarbon sector - oil & gas exploration & production, pipelines, refineries, petrochemicals, etc. going to be growth drivers.

© EIL will be leveraging knowledge / designing / engineering base and project management skills in India & overseas thru 30 : 70 JV with Technimont, Italy for UAE (from FY 09) and 50 : 50 JV with Tata Projects to undertake EPC work in India and abroad in areas of oil & gas, fertilizers, power, infrastructure, etc.

© These JVs to enable EIL to bid and execute large LSTK assignments exceeding US $ 500 million overseas.

© Company has strong order book of Rs 5,500 crore (incl. Rs 2,000 crore of LSTK) executable over 3 years and with two JVs, there will be a step-change in its operations.

© Rising crude oil prices globally but without increase in selling price of petrol, diesel and LPG has resulted in oil R&M companies witnessing severe financial crisis and hence, these companies are / may be delaying their expansion projects. This would adversely impact EIL as these companies are major its clients.

For FY 2008, sales were up by 29.2% to Rs. 737.75 crore. OPM% enhanced smartly to 27%. Other income rose by 25.8% to Rs. 135.57 crore. Consequently, PBT (before extra ordinary items) surged by 33.2% to Rs. 323.8 crore. Further boosted by 22% lower extra ordinary expenses of Rs. 30.21 crore, PAT grew @ 36.1% to Rs. 194.6 crore.

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