Muted execution but margins improved significantly on YoY basis ENGINERSIN – 147 Change: 0.15 (0.10 %)
News: Revenue was largely flat YoY at Rs 808.3 crore as both the segments reported muted execution. Consultancy segment revenue (43% of total revenue) was down 1.4% YoY while turnkey segment revenue (57% of total) also increased by just 1.8% YoY. However, EBITDA margin improved substantially by 276 bps YoY to 8.5% mainly led by lower other expenses. EBIT margin of consultancy segment improved to 25.6% (vs 17.2% in Q1FY23) while turnkey segment EBIT margin remained at 2% (flat YoY). PAT increased by 125% YoY to Rs 113.6 crore led by significant improvement in margins and higher other income.
Views: Order backlog at 8102 crore as of June 2023 end remains healthy (2.4x of FY23 revenues). Total order inflow during the quarter was Rs 1265 crore (led by Rs 821 crore in turnkey segment and Rs 444 crore in consultancy segment). Consultancy segment which contributes ~61% of total order book,expected to witness significant recovery led by execution of existing contracts and healthy orders pipeline in domestic & international markets. Apart from the existing core areas, company is looking for newer growth segments like green hydrogen, ammonia, bio[1]fuels, coal gasification, defence etc in margin-accretive consultancy segment. Moreover, company is also focusing on gaining orders from international markets (which contribute ~50% to the total consultancy orders)
Impact: Neutral