Engineers India Ltd.:
Please find below my research on EIL. I don't have answers for some of the questions that I am jotting down in the end. It will be great if people can help me answer them:
EIL executes projects either on a Lump Sum Turn Key (LSTK) or consultancy basis. Petroleum refining sector plays a dominant role in the company's business. EIL, with a strength of more than 3,000 qualified engineers, is regarded to be the best such company in Asia, besides those in Japan. It has developed indigenous capability in all aspects of the oil industry.EIL has to its credit, over 400 major projects successfully completed and has grown over the years to become a unique organization, the likes of which has not been created in any other developing country.Firm has no debt and generates copious amounts of cash flow. Company has solid, clean balance sheet. Cash makes up for Rs. 2000 Cr. approximately on a total assets size of approx. Rs. 3000 Cr. It is looking to grow internationally (mostly in middle east countries) and enter into new sectors like Nuclear, Water, Solar Power and Coal To Liquid. Government of India has 90% stake in the business. Management has lot of depth with long tenure in the company. Company has diversified customer base and next to nothing capital expenditure requirements.
Free Cash Flow/Total Enterprise Value yield works out to a juicy 15%.
Here is other financial info:
|Market Cap (mm)||64,387.40|
|Shares Out. (mm)||56.2|
|Dividend Yield %||1.60%|
|Total Revenue (mm)
||15,514.50||TEV/Total Revenue||2.9x||Price/Tang BV||4.7x|
|Net Income(mm)||3,511.50||Cash & ST Invst.(mm)||20,614.70|
|Market Capitalization(mm)||65,440.40||Total Debt||0|
|Total Enterprise Value(mm)||44,825.80||Total Assets||30,255.50|
|Capital Expenditure(mm)||-219.6||P/Diluted EPS Before Extra||18.6x|
|Net Income (mm)||1,252.5||1,271.7||247.1||641.6||822.5||1,180.2||1,428.2||1,451.3||1,980.2||3,511.5|
|Return on Assets %||8.4%||5.2%||7.8%||6.3%||5.8%||5.8%||9.2%|
|Return on Equity %||8.8%||10.6%||14.0%||15.4%||14.3%||17.7%||27.1%|
- What is EIL going to do with all the cash sitting on the Balance Sheet?
- Where do I find out how much order backlog the company has?
- Company doubled its revenue base between 2008 and 2009 fiscal year. Is it sustainable? Also, the increase in revenue base came from LSTK projects which happen to have lower margins. Is that trend going to continue in the future? Right now LSTK projects make up about 46% of the revenue and the rest comes from Consultancy. Consultancy assignments carry higher proft margins of about 30% while LSTK profit margins are much lower. LSTK profit margins range anywhere from 1% to 12%
- Who are EIL's competitors? I don't see any publicly listed company at least in mid-cap space.
- What is it that EIL does better than its competitors?