Target: ₹250

CMP: ₹187.85

We upgrade Engineers India (EIL) to ‘Buy’ from ‘Accumulate’ given the recent correction in the stock price, with an unchanged SoTP-derived TP of ₹250, valuing the Consultancy/Turnkey segments at a P/E of 25x/10x on FY26.

EIL is well-positioned to capitalize on the large pipeline of refinery & petrochemical capex in India, which is driven by rising oil & petchem demand and the government’s focus on reducing petchem imports. The company is also strongly focused on enhancing its green energy business by engaging in projects in green hydrogen & ammonia production, biofuels, and coal gasification. It also aims to diversify its business towards non-oil segments such as infrastructure.

Meanwhile, on the international front, EIL is focusing on key oil & gas markets such as the Middle East and Africa. Increased execution of a strong order book worth over ₹11,000 crore, and rising share of high-margin Consultancy segment in the mix will aid EIL’s profitability. However, the pace of execution will be a key monitorable.

We believe EIL’s long-term growth prospects remain intact given the healthy order book & project pipeline, opportunities in energy transition, growing exports business and lean balance sheet. The stock is trading at a P/E of 28.2x/20.5x on core FY25/26E EPS. Upgrade to ‘Buy’

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