Prabhudas Lilladher has issued a buy rating on Engineers India with a target price of ₹271 in its research report dated May 23, 2026. The brokerage has revised its FY27E/FY28E EPS estimates downward by 6.3%/3.4% respectively, factoring in a cautious outlook on Middle East operations amid ongoing geopolitical disruptions. The stock is currently trading at a PE of 18.2x/15.0x on FY27/28E estimates.
Engineers India reported mixed quarterly results with revenue declining ~8% YoY against a higher base, while EBITDA margin contracted 523bps YoY to 16.4% against a higher base. The company maintains a healthy order book of ~₹151 billion with 72% contribution from the consultancy segment, providing healthy multi-year revenue visibility. Management has guided for FY27 order inflow of ~₹80 billion and consultancy revenue growth of 15-20%, supported by execution ramp-up in recently secured domestic and overseas consultancy projects.
Management highlighted a temporary slowdown in Middle East hydrocarbon project awards amid geopolitical tensions, with delays in greenfield project finalization and slower decision-making likely to impact large-ticket order inflows. However, Engineers India continues to strengthen its Middle East presence through long-term agreements with Saudi Aramco, which are expected to support recurring consultancy opportunities. Domestic consultancy opportunities remain healthy across refinery expansions, coal gasification, CBG, biofuel and infrastructure projects.
Overseas growth is expected to be driven by Africa supported by large Dangote refinery and fertilizer consultancy contracts. Infrastructure and energy-transition segments are gaining traction with increasing opportunities in data centers, institutional infrastructure and coal gasification projects, aiding diversification beyond the traditional hydrocarbon business. The company's long-term growth prospects remain intact given strong order book prospects in non-oil & gas and oil & gas projects, strong traction in overseas consultancy business from Middle East & Africa region, and opportunities in energy transition & infrastructure.
Prabhudas Lilladher has rolled forward to March 2028E and maintains its 'Buy' rating, valuing the Consultancy/Turnkey segments at a PE of 22x/10x March 2028E (22x/10x September 2027E earlier), arriving at a SoTP-derived target price of ₹271 (₹261 earlier). The brokerage believes the stock's long-term growth prospects remain intact given its lean balance sheet and diversified business model across multiple sectors. According to PL Capital's Amit Anwani, the transmission and distribution sector could continue strong growth for 3-4 years driven by rising investments in renewable energy, grid expansion and data centers, with large HVDC transmission projects expected over the next 12-18 months.
