Engineers India Ltd

BSE: 532178
NSE: ENGINERSIN
About EIL

• Engineers India Ltd (EIL) is a leading global engineering

consultancy and EPC company owned by the Govt. Of India
Stock Snapshot operating under the administrative control of the Ministry of
Petroleum and Natural Gas (MoPNG).
 Market Cap: ₹ 7,100 Cr. • EIL primarily provides engineering consultancy and EPC
services focused on the oil & gas and petrochemical industries.
 CMP: ₹ 127
• The Co. operates in diverse business lines such as Refinery
 Book Value: ₹ 35 and Petrochemical, Pipelines, LNG Projects, Storage terminals
 Face Value: ₹ 5 and Strategic Storage, Upstream Oil and Gas Projects,
Metallurgy and Infrastructure.
 Equity capital: ₹ 281 Cr.
• Engineers India Limited (EIL) and CHEMPOLIS OY, Finland
 Promoter holding: 51.2% have signed a strategic alliance for the conversion of Biomass
 OPMs: 9.25% to Green fuels. This agreement shall pave the way to pursue
business development in the sunshine area of Renewables i.e.
 Enterprise Value: ₹ 6,046 Cr.
Cellulosic 2G Ethanol Technology.
 ROCE: 24.5% • The Co. has received several new consultancy orders with
diverse project scope from domestic as well as overseas
clients like HPCL, Gujarat State Petronet Ltd, IFTAS, NLC India
Ltd, Deepak Chem Tech Ltd., Petronet LNG Ltd.
• The Co. has an R&D unit in Gurugram which has developed
40+ processes technologies. It has 33 live patents and 35
patent applications.
• It has Technology collaboration with Research Organizations
of IOCL, BPCL, HPCL, GAIL and Research Institutes like CISR-
IIP, CSIR-NCL, ICT, IITs.

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 Investing Snapshot
Order Wins of past few Quarters:

• Received a contract of INR 320 crores for the EPCM Services

India’s leading Engineering
Consultancy & EPC -Navratna
company
1965 - Established as a JV
between GoI and Bechtel.
for the Greenfield 4000 TPD Urea and Ammonia project in
Nigeria.
• Executing their coal gasification project for Neyveli Lignite
Corporation and expects a PMC order next year.
• Won an order for Owner’s Engineering Services for
Adani's 30,000 MTPA Polysilicon project.
• Involved in the coal-to-methanol project of Neyveli Lignite
Corporation.

1967 - Wholly owned GoI • Studies are being carried out in coal gasification and green

company hydrogen sectors.

• Various small pilot projects are being studied with the
potential for major project implementation in the future.

Margins:

• The consultancy segment has a margin of segment

profit of 20%.
• EPC business has a 2-3% margin, but the company is
working on change orders to increase EPC margins.

Investments:

• Government set a target for coal gasification, which

will result in INR 30,000-35,000 crore investments in
the next 3-4 years.
• Company has not had talks with oil companies regarding the
INR 300 billion investment announced in the budget, but will
pitch in once investment plans are finalized.
• Expects to have more clarity on the investments by each OMC
in Q1 of the next financial year.

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17th July 2023
 Financial Performance:
Business Focus:
The Co. has an R&D unit in
Gurugram which has
developed 40+ processes
technologies and it has 33
live patents and 35 patent
applications.
Order Inflow:
17th July 2023
• Engineers India Limited (EIL) reported a turnover of INR3,284
crores, the highest in the last 10 years.
• The company earned a profit after tax of INR342.15 crores.
• The company's order inflow increased significantly to
INR4,708 crores in the financial year '22-'23.
• EIL's core focus is on oil and gas, specifically in the
petrochemical sector.
• The company is foraying into renewables and nuclear power.
• EIL is targeting the petrochemical complex sector and has
already moved into sectors like green hydrogen, bioethanol,
biofuels, coal gasification, and fertilizer.
• The company is focusing on international markets and has
strengthened its Middle East office.
• EIL is targeting African countries for projects in LNG, fertilizer,
and oil and gas.
• The company is shifting its focus from being a purely
domestic company to overseas companies and is also
focusing on infrastructure projects.
• The company aims to maintain its current business and
improve results, with a target to secure at least as much
business as in the current financial year.
• The INR1,600 crores of orders received includes both
consultancy and turnkey projects.
• Mix of order inflow expected to be 50% consultancy and 50%
turnkey.
• Consultancy assignments primarily focused on processing
facilities and pipeline facilities in the oil and gas sector.
• Company targeting niche projects in institutional buildings,
data centers, airports, and bullet train project in the
infrastructure segment.
• Biofuels and hydrogen are new areas of focus, with
emphasis on technology-intensive projects and
substantial engineering work.
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EIL has Increased focus on
exports market and
strengthening its presence in
Middle East with increasing
manpower to target more
projects.
17th July 2023
Profitability:
• The company aims to maintain a range of 27-30%
margin for consultancy and 4% margin for EPC.
• Hydrocarbon projects will continue to lead, but the company
is increasing its focus on Energy Transition and has secured
business worth 10% of the overall business in this segment.
• The company is cautious about entering new niche areas and
conducts due diligence before bidding for projects.
• Profitability threshold not specified, but the company focuses
on projects with substantial engineering manhours and
technology intensity.
Capital Allocation Policy:
• EIL's capital allocation policy follows the DP guideline and the
company has distributed around 49% of PAT as dividend.
• No material investment is envisaged as of now.
Key Points:
• The company expects to maintain the guidance of INR4,000
crores to INR5,000 crores of order inflow in '23 and going
ahead.
• EIL has a strong technical edge in international markets and
maintains a focus on consultancy services.
• The company competes with private consultants in the
government sector and secures jobs through tendering.
• Turnkey projects have low margins due to evenly distributed
risks between client, consultant, and contractor.
• The company has temporary investments in liquid mutual
funds to meet immediate working capital requirements.
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 New Projects:

• Company is targeting opportunities in green hydrogen,

gasification, and emissions control in the steel sector.
• Company has tied up with another technology player for
building salt caverns and is looking at potential projects in this
The Company is working
area.
towards new growth areas
• Second-generation ethanol plant in Numaligarh is under
such as green hydrogen,
advanced stage of construction, and the company is looking at
Biofuel (1st bamboo based
more such projects in the Northeastern region.
refinery order), Coal
• Company is getting DFR jobs for integration of refineries with
Gasification, defence, infra
petrochemical plants.
segment (data centres,
• Company is looking for investment opportunities in standalone
Airports, bullet train) etc in
projects with lower CapEx and higher revenues.
consultancy segment.

Highlights:

• Company expects to cover the dip in profit in the coming

quarters.
• Company is negotiating with clients for change orders, and the
impact will be seen in upcoming quarters.
• Company is confident of achieving a consultancy
margin of 25-28% and 3-4% in LSTK business.
• Company will continue to reward shareholders with dividends.
• Revenue from Ramagundam Fertilizers on a standalone basis
is over 100%, and revenue from RFCL will be over and above
this figure.
• ABRPL has a capacity of 185 KLPD of ethanol and has the
option to produce additional value-added products like acetic
acid and propanol.

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 Diversified Portfolio: Involved in Nation Building since
Inception
• Oil & Gas/ SPR
• Fertilizer & Gasification
• Mining & Metallurgy
• Bio-fuels
• Gas/LNG Infra
• Airports & Defence
• Water & Waste Water
• Ports & Harbour
• Urban Infra
• Clean Energy
Service Offering - From Concept to Commissioning

The Management targets Technology Licensing

to maintain Consultancy • Conceptualization of Process

• Process Modelling & simulation
EBIT margin of 27% and • Bench / Pilot Studies
Turnkey margins of 3 to • Technology Development & Licensing

4% for FY24. Process Design

• Pre-feasibility studies
• Technology and licensor selection
• Conceptual design & feasibility
• Process design package
Project Management
• Integrated Project Management services
• Project Control - Planning & Scheduling, Monitoring,
Costing
Construction Management
• Materials /warehouse management
• Quality assurance and health, safety &
• environment
• Progress monitoring/ Scheduling
• Mechanical completion
• Site closure
Supply Chain Management
• Supplier and contractor management
• Expediting and inspection
• Vendor development
Specialized Services
• Environment engineering
• Heat and mass transfer
• Plant operations and safety management

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17th July 2023
 Technology at the forefront of Consultancy Services

• R&D Center with multiple pilot and demo facilities at

Gurugram
• Developed more than 40 Process Technologies
• 34 active Patents, 40 pending grant
• Technology collaboration with Research Divisions of IOCL,
BPCL, HPCL, GAIL, Research Institutes like CISR-IIP, CSIR-
NCL, ICT and Educational Institutes like IITs, NITs
• 60% of process technologies in refineries already
indigenized.
• Tremendous technology absorption capacity has been
Engineers India Limited (EIL)
successfully demonstrated.
reported a turnover of
• 100% Engineering indigenization in high tech domain of oil
INR3,284 crores, the highest
& gas achieved
in the last 10 years.
• Facilitating further development of indigenous capabilities
through Start-up India (EngSUI)

Leadership in Refineries & Petrochemicals in India

• 20 out of 23 Refineries in India have EIL Footprints

• Installed 10 out of the 11 mega petrochemical complexes in
India.
• Built combined refining capacity of more than 165 MMTPA
(3.3 million BPD) in India
• Engineered 10 grass-root refineries.
• Forayed into new areas such as underground caverns for
storages
• Product upgradation leapfrogging to BSVI product quality
for MS and Diesel pan India
• Integrated Refinery and Petchem Work in progress on
Rajasthan Refinery & HMEL

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 Sustainable Green Energy, Decarbonization & Renewable

GREEN HYDROGEN
• Futuristic & Zero emission fuel will decarbonize Industry
• Executing projects for various clients
• Integrate GH2 in Refinery, Fertilizer, CGD

The company expects to • Hydrogen blending in gas grid and its utilization in Industrial

maintain the guidance of corridors

INR4,000 crores to INR5,000

crores of order inflow in '23 BIO FUELS

and going ahead. • Key for Fossil Fuel Import Reduction

• 20% Ethanol in MS by 2023-24
• 5% Bio-Diesel in Diesel by 2030
• Huge potential for 1G/2G/3G Ethanol to meet objective
• EIL is Implementing first of its kind Bio Refinery project – ABRPL
• Strategic Alliance with Campolis

TOWARDS NET – ZERO

• CCUS: Capturing CO2 from FG
• Waste Plastic to Fuel
• Technology Assimilation & Absorption
• R&D efforts with Norwegian Geological
• Institute (NGI) for subsurface CO2 storage

Preferred Consultant for New Initiatives

• Executing projects for GAIL and BORL in Green Hydrogen
segment
• PMC services for 1200 TPD Lignite to Methanol project of
NLC
• Feasibility Study for Syn Gas to Value added Products for
JSPL

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17th July 2023
 Business Break up

EIL's capital allocation

policy follows the DP
guideline and the company
has distributed around
49% of PAT as dividend.

Order Book Break up

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17th July 2023
 Financial Snapshot

The company is shifting its

focus from being a purely
domestic company to overseas
companies and is also focusing
on infrastructure projects.

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17th July 2023

EIL has more than five
decades of experience in C&E
services across various
sectors especially in
hydrocarbon space with
significant track record
across the entire oil and gas
value chain.
17th July 2023
Key Risks
• Concentrated order book: EIL, under the administrative
control of MoPNG majorly undertakes engineering work for the
oil and gas segment and hence, the order book is concentrated
with 94% of the total orders in the said segment. The order book
is concentrated with the top five orders accounting for 65% of
the order book.
• PBILDT margin has declined, the same is expected to normalize
for the entire fiscal with revenue booking from change in scope
of project and contribution from higher-margin C&E services.
Our View
• With Experienced and professionally qualified management, Dominant
position in the field of C&E services with proven designing and
engineering expertise, solid orderbook position, Low counterparty risk
due to its reputed clientele and Robust financial position we see EIL
would continue to maintain its margin profile leading to a stable
growth in earnings going forward making it a great addition to your
long term portfolio in the range of 118-130.
•
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17th July 2023