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EIL Shifts to High-Margin Consultancy, Profit Soars
3 Sep
Summary
- Consultancy share of turnover rose to 62% in Q1 FY27.
- Profit jumped 141% to Rs 157.94 crore on lower revenue.
- Company is diversifying into nuclear and data centers.
Engineers India Limited (EIL) is experiencing a profitable shift by increasing its focus on high-margin consultancy services. Consultancy's share of EIL's turnover grew from 44% in Q1 FY23 to 62% in Q1 FY27, while turnkey project revenue declined.
This business mix change led to a 141% profit surge to Rs 157.94 crore in Q1 FY27, even as consolidated revenue fell by 6% year-on-year. The enhanced profitability is due to consultancy segment margins at 24-25% compared to 7.5% for turnkey projects.
Beyond its traditional oil and gas focus, EIL is now applying its engineering expertise to nuclear power, coal gasification, and data centers. This diversification into new markets offers expanded opportunities for growth.
The company entered FY27 with a Rs 14,424 crore order book, 73% of which is consultancy. EIL targets at least 10% revenue growth and Rs 8,000 crore in order inflow for FY27, with consultancy projected to exceed 55% of turnover.
EIL maintains a strong balance sheet with minimal debt and significant reserves. Its return on net worth (RoNW) has risen to approximately 22%, reflecting improved financial health. Current market valuation reflects expectations of continued business improvement.
