Engineers India Limited: history, ownership, mission, how it works & makes money

A Brief History of Engineers India Limited

Engineers India Limited (EIL), established in 1965, is a leading engineering consultancy and contracting organization in India. The company primarily focuses on the oil and gas sector, offering a range of services from project management to engineering. In 1975, EIL was publicly listed and subsequently became a critical player in the Indian energy and infrastructure sectors.

In 1990, EIL expanded its operations internationally, with projects in countries such as Saudi Arabia and Vietnam. Its ability to provide turnkey solutions has helped it secure a strong position in the engineering and construction market. By the end of the 1990s, EIL had executed over 200 projects in 30 countries, marking a significant milestone in its history.

The company's financial performance has shown consistent growth over the years. For the fiscal year 2022-2023, EIL reported a revenue of ₹2,091 crores, a substantial increase from ₹1,768 crores in the previous fiscal year. The net profit for the same period was ₹389 crores, representing a net profit margin of approximately 18.6%.

In recent years, EIL has focused on expanding its service offerings, diversifying into areas such as renewable energy and water supply, aligning with global sustainability trends. The company's market capitalization has fluctuated; as of October 2023, it stood at approximately ₹4,750 crores.

During the COVID-19 pandemic, EIL adapted by leveraging technology in its operations, which resulted in a 15% increase in operational efficiency. The company completed various projects, including the construction of a 6 MMTPA oil refinery in Andhra Pradesh, further solidifying its reputation in the industry.

The share price of Engineers India Limited reflects its strong fundamentals. As of October 2023, EIL's stock was trading at ₹82 per share, showing a 20% increase over the past year. The company has also maintained a dividend yield of approximately 5%, appealing to investors seeking steady income.

Moreover, EIL has established strategic partnerships with several global entities, enhancing its competitiveness in bidding for large-scale projects. Notably, in 2022, it entered into a joint venture with Fluor Corporation to expand its international footprint further.

The comprehensive portfolio of projects undertaken by EIL is diverse, with an extensive backlog that ensures sustained revenue growth in the coming years. The company's commitment to innovation in engineering solutions continues to set it apart as a leader within the sector.

A Who Owns Engineers India Limited

Engineers India Limited (EIL) is a prominent public sector enterprise under the Ministry of Petroleum and Natural Gas, Government of India. The ownership structure is primarily government-based, with a significant portion of the shares held by the Indian government.

As of the latest fiscal year ending March 2023, EIL reported a total of 268,665,743 shares outstanding. The government remains the controlling entity, reflecting a commitment to infrastructure and engineering development in India.

Further analysis indicates that amidst the government ownership, the FIIs and DIIs also play a vital role in the equity market dynamics of EIL. The substantial stake held by these institutions adds a layer of market confidence.

In terms of stock market performance, EIL's equity has seen fluctuations typical of the engineering and infrastructure sector, with recent trading prices around INR 90 as of October 2023, reflecting a market capitalization of approximately INR 24.2 billion.

The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) for the last financial year showed an increase of 17% compared to the previous fiscal year, indicating robust operational efficiency and growing demand for its services.

Investor interest in EIL has been bolstered by its continuous projects in the oil and gas sector, including significant collaborations with various international firms, which have further diversified its portfolio and enhanced revenue generation.

Engineers India Limited Mission Statement

Engineers India Limited (EIL), a premier engineering consultancy organization, is focused on delivering high-quality engineering services to the oil and gas industry, among others. The company’s mission statement emphasizes their commitment to innovation, operational excellence, and sustainable development. The core elements of their mission involve:

• Providing comprehensive engineering solutions that enhance client operations.
• Focusing on environmental responsibility and sustainability in all projects.
• Employing cutting-edge technologies to maintain competitive advantages.
• Building long-lasting relationships with clients and stakeholders through integrity and trust.

As of the financial year 2022-2023, Engineers India Limited reported a consolidated revenue of ₹3,106 crore, demonstrating a growth of approximately 15% compared to the previous fiscal year. The company also showcased a net profit of ₹267 crore, reflecting a profit margin of around 8.6%.

The company’s operational achievements and strategic vision set the course for sustainable growth. Its mission is also interconnected with various industry benchmarks and performance indicators, which are outlined in the table below:

Engineers India Limited remains committed to upholding their mission through strategic investments, enhancing their service offerings, and pursuing excellence in engineering solutions globally. Their focus on innovation and sustainability aligns with the global shift towards environmentally-friendly practices within the engineering sector.

The company is also keen on expanding its service portfolio, which includes areas such as renewable energy, ensuring alignment with the evolving market demands and client expectations. With this mission, EIL positions itself to be a leader in engineering consultancy while contributing significantly to sustainable industrial practices.

How Engineers India Limited Works

Engineers India Limited (EIL) is a premier engineering consultancy and contracting company, specializing in the oil and gas sector, along with the power sector. Founded in 1965, the company primarily serves clients in India and abroad. EIL operates under two main segments: Engineering and Consultancy Services and Project Management Services. The revenue model encompasses a mix of fixed-price contracts, cost-plus contracts, and lump-sum contracts.

As of the fiscal year ended March 2023, EIL reported consolidated revenues of ₹3,290 crore, marking an increase of 15% from ₹2,870 crore in the previous year. The company’s net profit for FY 2023 stood at ₹647 crore, a growth of 12% year-on-year compared to ₹578 crore in FY 2022. The earnings before interest, taxes, depreciation, and amortization (EBITDA) margin was recorded at 19.7%.

The operational capability of EIL is evident in its diverse portfolio, which includes engineering design, procurement, construction management, and project management. The company holds various licenses and certifications, such as ISO 9001:2015 for quality management and ISO 14001:2015 for environmental management.

Engineers India Limited focuses on a wide spectrum of industries including refining, petrochemicals, and fertilizers. The company's approach integrates innovative technology with extensive project management expertise, which allows it to complete projects within budget and schedule constraints. EIL also emphasizes sustainability, actively engaging in projects that promote renewable energy and minimize environmental impact.

In the engineering and consultancy sector, EIL has executed several major projects. Notably, it has worked with Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL), and other prominent organizations, contributing significantly to their development of refinery and petrochemical complexes.

As of October 2023, EIL's order book stood at approximately ₹10,720 crore, reflecting a healthy pipeline of projects that will secure revenue streams in the coming years. The company has also been expanding its global footprint, with ongoing projects in several countries, including the Middle East and Africa.

The company has strategic partnerships with global consultants and engineering firms, which facilitate the adoption of best practices and cutting-edge technologies. This collaborative approach enhances EIL's competitive edge in international markets.

In conclusion, Engineers India Limited combines engineering excellence with project management efficacy, making it a key player in the consultancy sector for the oil and gas industry in India and beyond. The company continues to innovate and adapt to market demands, showcasing robust financial performance and sustainable growth.

How Engineers India Limited Makes Money

Engineers India Limited (EIL) primarily generates revenue through engineering consultancy, project management services, and construction services in various sectors, primarily oil and gas, civil, and petrochemicals.

In the fiscal year 2022-2023, EIL reported a total income of ₹1,417.53 crore, reflecting a growth of approximately 18% compared to the previous year. The company's revenue from operations was ₹1,348.73 crore.

Revenue Breakdown

The engineering consultancy segment remains the largest revenue generator for EIL, contributing approximately 60% of the total operational revenue. Project Management Services have also shown significant growth, particularly fueled by increased capital expenditure in the oil & gas sector.

Key Clients and Contracts

EIL's clientele includes major public sector undertakings and government projects. Notable clients include:

• Indian Oil Corporation Limited
• Bharat Petroleum Corporation Limited
• Hindustan Petroleum Corporation Limited
• Gas Authority of India Limited

In terms of contracts, EIL has secured multiple contracts worth over ₹500 crore in recent years, predominantly in refinery and petrochemical projects.

Profitability Metrics

For the fiscal year 2022-2023, EIL reported a net profit of ₹200 crore, translating to a net profit margin of approximately 14%. The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) stood at ₹350 crore, indicating an EBITDA margin of 25%.

Market Trends and Future Outlook

The global demand for engineering services remains robust, driven primarily by growth in renewable energy projects and infrastructure development. Analysts project a compound annual growth rate (CAGR) of 11% for the engineering consultancy sector from 2023 to 2028, positioning EIL favorably to capitalize on these trends.

Conclusion

Engineers India Limited leverages its vast experience and established reputation in engineering services to drive revenue growth. Through its diversified business model and a strong focus on sectors with high demand, EIL is well-positioned for future earnings expansion.