Brokerage house Religare Institutional Research maintained ‘Buy’ rating on on Engineers India shares after the company on Tuesday post market hours registered 50.07 per cent rise in its net profit at Rs 80.30 crore for the quarter ended June 30, 2016 as compared to Rs 53.51 crore for the same quarter in the previous year. However, net sales of the company slipped by 12.67 per cent year-on-year to Rs 341.82 crore for the quarter under review from Rs 391 crore in the same quarter last year.
At 3.01 pm, shares of the company were trading 4.42 per cent up at Rs 262.10. The scrip opened the day at Rs 252.10 and has touched a high and low of Rs 266.50 and Rs 252.10, respectively, in trade so far. Benchmark BSE Sensex was down 151 points at 27,908.24. Engineers India shares advanced 8.33 per cent on Tuesday.
Operating profit of Engineers India jumped 38.67 per cent year-on-year to Rs 127.90 crore.
According to Religare Institutional Research, Engineers India beats estimates as margins in the lump sum turnkey project (LSTK) segment were buoyed by provision write-backs. Importantly, management raised its FY17 order inflow guidance to Rs 3500 crore (from Rs 2000 crore at Q4FY16-end) on account of higher-than-expected orders for BS VI refinery upgrades.
“We think upside risks to FY18 estimates can stem from higher-than-expected margins as the business has high operating leverage. We have ‘Buy’ on Engineers India shares with a September 2017 target price of Rs 275.”