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Engineers India Limited Q4 FY'24 Earnings Update
Financial Performance • Turnover: INR 3,232 crores for FY'24 (down from INR 3,284 crores in FY'23). • Q4 Turnover: INR 790 crores. • Profit After Tax: INR 91 crores (up from INR 50 crores in the previous quarter). • Consolidated Profit: INR 445 crores (29% year-on-year increase). • Order Inflow: INR 3,406 crores for FY'24; current order book at INR 7,823 crores. • Debtor Days: Improved from 39 to 35.
Conference Call Highlights • Stake Monetization: No current plans to monetize a minority stake; viewed as a long-term investment. • Revenue Shortfall: Expected INR 4,500 to INR 5,000 crores; achieved approximately INR 3,400 crores due to contract negotiation delays. • Future Business: Secured INR 1,800 crores; potential for an additional INR 3,000 to INR 4,000 crores. • EPC Margins: Slight downturn in turnover but improved margins reported.
Project Updates • RFCL Project: Profit contribution increased from INR 2 crores to INR 85 crores. • Interest Costs: Rise attributed to a client settlement involving INR 55 crores in interest. • Joint Ventures: Expectation of over INR 100 crores from RFCL project in FY'25.
International Orders and Market Presence • International Orders: Smaller order from Nigeria; ongoing negotiations for larger contracts. • Middle East Presence: Growing consultancy opportunities noted.
Competitive Landscape • Domestic Market: Concerns about competitive intensity affecting margins; current margins range from 22% to 24%.
Future Outlook • Dividend Income: INR 30 crores from Numaligarh; future dividends from RFCL anticipated. • Ongoing Projects: Two projects in Barmer nearing completion; larger expansion projects depend on future developments. • Capital Allocation: Commitment to dividends and rewarding shareholders reaffirmed.
Engineers India Limited Q3 FY'24 Earnings Conference Call Summary
Financial Performance • Turnover: INR 856 crores for Q3, a 10% increase from the previous quarter and 3% year-over-year. • Profit After Tax: INR 50 crores, up 4% from the same quarter last year. • Nine-Month Turnover: INR 2,442 crores, with significant increases in profit before and after tax. • Unexecuted Order Value: INR 7,990 crores.
Project Updates • IOCL Paradip Project: Not yet in the entry phase; expected to materialize next financial year. • BPCL Petchem Initiatives: In early stages of re-evaluation. • Coal Gasification: Slow progress; many projects still in feasibility stage.
Business Strategy • Turnkey Business EBIT Margins: Projected between 3% to 5% due to ongoing ONGC projects. • Focus on Infrastructure: Strategic shift towards niche infrastructure projects, including government buildings and data centers. • EPC Orders: Vary by company strategy; some prefer EPCM for certain units.
Future Orders and Initiatives • Petrochemical Sector: Negotiating contracts for three projects, including sustainable aviation fuel at IOCL's Panipat refinery. • Solar Technology Collaborations: Feasibility studies underway; potential orders expected next financial year. • Consultancy Revenues: Anticipated turnover of over INR 3,500 crores for the current year, with 10% growth expected next year.
International Expansion • Projects in Nigeria and MENA: Ongoing projects in Nigeria; plans to expand into other African countries and reenter Saudi market. • Non-Oil and Gas Initiatives: Proposals in the defense sector under discussion with the government.
Energy Transition • Current Contribution: Energy transition contributes about 7-8% of revenue; expected to increase to 15-20% in coming years. • Green Hydrogen Projects: Confidence in capabilities to undertake projects, with significant business potential.
Vision and Future Outlook • Vision 5K '25: Ongoing efforts to increase order book and revenue; achieving the vision requires time and consistent effort. • Competitive Positioning: EIL's cost advantage and experience in the Indian market favorably position it for international business. • Talent Retention: Attrition rate below 2%, with competitive strategies in place.
Conclusion • Management expressed satisfaction with results and thanked participants for their engagement.
Engineers India Limited Q2 FY24 Earnings Conference Call Summary
Key Financial Highlights • Q2 Turnover: INR 777 crores (slight decrease from previous quarter) • Half-Year Turnover: INR 1,586 crores (nearly unchanged from prior year) • Profit Before Tax (PBT): Increased by 68% year-on-year • Profit After Tax (PAT): Increased by 59% year-on-year • Order Book: INR 8,188 crores
Management Insights • Margin Adjustments: Fluctuations expected quarterly; target around 3% in turnkey segment. • Order Pipeline: Aiming to secure similar business levels as last year, focusing on oil and gas, mining, and infrastructure. • Consulting Margins: Stable annual margins despite quarterly fluctuations.
Project Updates • PMT Order for Petronet CDH: Still under consideration. • International Expansion: Focus on markets like Guyana and Algeria; balancing overseas and domestic business. • Green Hydrogen Projects: Ongoing projects and a memorandum of agreement with NTBC for energy transition.
Future Growth Projections • Turnover and Profit Growth: Projected 10% increase in turnover and net profit for the current year. • Turnkey Segment Margins: Currently 2%-3%, with efforts to improve profitability. • Major Investments: Significant investments in Ramagundam fertilizer and Numaligarh refinery projects.
Emerging Opportunities • Petrochemical and Refinery Projects: Pipeline worth INR 30,000 to INR 40,000 crores. • Green Hydrogen Sector: Anticipated consultancy opportunities worth INR 4,000 to INR 5,000 crores.
Coal Gasification and Tenders • Coal Gasification Projects: Engaged with Coal India and Navili Lignite Corporation; feasibility stage ongoing. • Upcoming Tenders: IOCL's PVC-ECM consultancy tender expected next year.
International Business and Strategic Alliances • Order Activity: Most international projects involve private investments, particularly in Nigeria and Algeria. • Strategic Alliance with Sunrise Group: Initial engagements progressing for solar technology and defense projects.
Conclusion • Project Pipeline: Bidding for projects worth INR 40,000 to INR 50,000 crores across various sectors. • Future Outlook: Optimism about growth in project size and maintaining margins in the EPSM segment. • Closing Remarks: Expressions of gratitude and well wishes for Diwali.
Financial Performance • Turnover: INR 808 crores (up from INR 805 crores YoY) • Profit Before Tax: INR 153 crores • Profit After Tax: INR 114 crores • Growth: Significant growth compared to the previous year
Renewable Energy and Alternative Fuels • Projects: Involvement in bio-refinery projects, including bamboo-based refinery • Revenue from Energy Transition: INR 63 crores (8% of total revenue) • Strategic Alliance: Partnership with an Australian group for solar CSP projects
Competitive Landscape and Market Opportunities • ONGC Order Expectations: Difficult to provide specific targets due to competition • Hydrogen Gas Sector: Significant potential, but quantification is challenging • Consultancy Opportunities: Estimated at 2-3% of project costs
Project Updates • Ramagundam Fertilizer Project: Operating at full capacity and generating profits • Consultancy Revenue Growth: Projected growth of 5% to 10% for FY '24 • Future Projects: Focus on coal bed methane and coal-to-ethanol initiatives
Margin Improvement Strategies • Consultancy Margins: Targeting 25% to 27% • EPC Business: Efforts to improve profit margins through change orders • Operating Margins: Acknowledgment of challenges but optimism for improvement
Future Outlook • Projected Turnover: INR 1,500 to INR 2,000 crores with 5% to 10% growth • International Market Expansion: Targeting INR 3,500 to 3,600 crores for the next fiscal year • Investment Strategy: No immediate plans for new investments; future opportunities evaluated on a case-by-case basis
Conclusion • Management's Optimism: Expressed gratitude for engagement and confidence in performance improvements.
Financial Performance • Turnover Increase: • Total turnover for FY 2023: INR 3,284 crores (14.5% rise YoY). • Q4 turnover: INR 866 crores, profit of INR 159 crores (up from INR 48 crores in Q3). • Consolidated Profit: • Reported profit: INR 346 crores (147% increase YoY). • Order Inflow: • Total order inflow: INR 4,708 crores, including international projects.
Strategic Focus • Core Sector: • Emphasis on oil and gas, particularly petrochemicals. • Diversification: • Expanding into green hydrogen, biofuels, and defense. • Growth Target: • Aim for 15-20% growth in top line over the next few years.
Project Management • Project Timelines: • Major consultancy orders: 3-3.5 years; smaller projects: 6 months to 1 year. • Energy Transition: • 10% of business focused on energy transition initiatives. • Order Mix Goal: • Targeting a balanced mix of 50% consultancy and 50% turnkey projects.
Sector-Specific Updates • Petrochemical and Refinery: • Ongoing opportunities and specific projects in the pipeline. • Defense Sector: • Exploring modernization projects. • Coal Gasification: • Engaged in pre-project activities.
Financial Clarifications • Mega Refinery Project: • Ongoing environmental consultancy; timeline uncertain due to location changes. • Change Orders: • 50% of a specific change order executed, with provisions exceeding INR 500 crores.
Growth Strategy • Niche Segments: • Targeting institutional buildings, biofuels, and hydrogen; avoiding low-margin sectors. • Project Progress: • Slow tender activities in Kaveri basin and Panipat due to political issues.
Financial Health • Consultancy Segment: • Write-back of INR 70 crores confirmed; cumulative provision of INR 500 crores explained. • Cash Balance: • Approximately INR 1,100 crores as of March 31, with INR 950-1,000 crores available post-advances.
Future Outlook • Growth Projections: • Targeting double-digit growth in top line and net profit margins. • Order Book: • Current order book: INR 7,600 crores; anticipated order wins: INR 4,000 to INR 5,000 crores.
Capital Allocation • Dividend Distribution: • Adhering to guidelines, currently exceeding 49% of profits. • Investment Plans: • No significant new investments planned.
Profit Margins • Overall Target: • Projected profit margin of around 15% over multiple years. • Segment Margins: • Consultancy: 27%; LSTK: 2.5-3%.
Conclusion • Management's Confidence: • Confidence in technical strength and competitive pricing in international markets. • Gratitude: • Expressions of thanks from management and the moderator at the end of the call.
Engineers India Limited Q3 FY23 Earnings Conference Call Summary
Financial Performance • Turnover Increase: 17% rise in turnover for nine months ending December 31, 2022. • Total Turnover: INR 2,418 crore, driven by consultancy and turnkey segments. • Net Profit: INR 16.12 crore for the quarter despite a loss from the RFCL project.
New Business Contracts • Contracts Secured: New business contracts worth INR 1,600 crore. • Future Outlook: Anticipation of additional contracts by the end of the financial year.
Key Projects and Developments • Polypropylene Unit: Plans for a new unit and expansion in the petrochemical sector at BORL. • Coal Gasification Projects: Ongoing projects, including one with Neyveli Lignite Corporation. • Adani Project: Engineering assignment for Adani's polysilicon project underway.
Operational Insights • RFCL Capacity Utilization: Issues due to scheduled maintenance; operations have stabilized. • Profit Target: Standalone profit target of INR 340 crore. • Order Intake Expectation: Targeting INR 4,000 crore by FY23 end, focusing on ammonia and petrochemical investments.
Strategic Focus Areas • Refinery Modifications: Ensuring adequate feedstock for petrochemicals. • EPC Margins: Current margins at 2-3%, with plans to improve through change orders. • Green Hydrogen: Established a dedicated team for green hydrogen opportunities. • Energy Transition Projects: Optimism about order flows in this sector.
Shareholder Commitment • Dividends and Share Value: Commitment to dividends and improving share value with a strong order book.
Conclusion • Gratitude Expressed: Thanks exchanged between management and participants; call officially ended.