Engineers India: Record ₹13,131 Cr Order Book Fuels 25% Growth Outlook

Introduction to EIL's Strong Position

Engineers India Limited (EIL) is positioned for significant growth, supported by a record-breaking order book that provides robust revenue visibility for the coming years. The company's strong performance is driven by a healthy pipeline of domestic refinery projects and an increasing share of overseas consultancy work. This has led to an upgraded revenue forecast and raises questions about a potential re-rating of its stock by the market.

Record Order Book Ensures Future Revenue

The cornerstone of EIL's positive outlook is its historic high order book, which stood at ₹13,131 crore as of September 30, 2025. This massive backlog is approximately 4.3 times the company's annual revenue, offering exceptional visibility and stability. Order inflows have been strong, with ₹3,765 crore secured in the first half of FY26. The company anticipates total orders for the fiscal year to exceed ₹8,000 crore. This momentum is partly fueled by a strategic push into international markets, which helps balance risks associated with domestic economic cycles.

Overseas Projects as a Key Growth Driver

International projects have become a crucial component of EIL's growth strategy. In the current fiscal year to date, the company has secured overseas consultancy projects worth ₹1,600 crore. This success not only diversifies the revenue stream but also enhances EIL's global footprint. Management anticipates securing further significant international projects, reinforcing its position as a competitive player in the global engineering and consultancy landscape.

Domestic Pipeline and Energy Transition

Domestically, EIL is set to benefit from major capital expenditure plans in the oil and gas sector. A strong pipeline of projects includes the IOCL Paradip refinery expansion, with Phase 1 underway and Phase 2 expected by FY27, and a feasibility study for the Andhra refinery. Furthermore, petrochemical and specialty chemical projects from clients like BPCL and IOCL are moving toward implementation, creating substantial opportunities. EIL is also actively participating in India's energy transition, with involvement in bio-refineries, hydrogen projects, coal gasification, and a recent coal-to-SNG (Substitute Natural Gas) assignment from NTPC.

Financial Performance and Upgraded Guidance

EIL's execution capabilities were evident in its Q2 FY26 results. The company reported a turnover of ₹900 crore, a significant increase from ₹676 crore in the same quarter of the previous year. Profit After Tax (PAT) grew by 45% to ₹115 crore. Based on this strong performance and a healthy order pipeline, management has upgraded its guidance for FY26, now projecting revenue growth of more than 25%.

Profitability and Segment Focus

EIL aims to maintain a balanced revenue mix between its two main segments. For FY26, the company projects a 50-50 split between consultancy and LSTK (Lump Sum Turnkey) projects. Profitability targets are set to maintain consultancy segment margins around 25% and LSTK segment margins between 6-7%. The consultancy business has already demonstrated strong performance, hitting a 28% margin in Q2.

Contributions from Strategic Investments

EIL's financial strength is further supported by its strategic investments. The company holds a 26% stake in Ramagundam Fertilizers and Chemicals Limited (RFCL), which is expected to generate an annual profit of ₹500 crore once stabilized, with profitability anticipated from Q3. Although a temporary shutdown at the Ramagundam project led to a ₹25 crore loss in Q2, operations have since normalized. Additionally, EIL's 4.37% stake in Numaligarh Refinery is expected to yield a dividend of approximately ₹20 crore in the upcoming quarter.

Stock Performance and Valuation

Despite the strong fundamental drivers, EIL's stock has experienced a correction, declining from a high of around ₹255 in July to its current level of ₹198 per share. At this price, the stock trades at 18 times its estimated earnings for fiscal 2027. Analysts consider this valuation reasonable, especially given the company's strong cash reserves of around ₹1,000 crore and a healthy dividend yield of approximately 2.5%.

Outlook and Potential for Re-rating

The combination of a record order book, upgraded growth guidance, strong execution, and a reasonable valuation presents a compelling case for Engineers India Limited. The company's strategic diversification into energy transition and overseas markets further strengthens its long-term prospects. These factors suggest a significant potential for a stock re-rating as the market recognizes the company's sustained performance and future earnings visibility.