InvestorQ : Short term outlook on Engineers India
Bhaskaran made post

Short term outlook on Engineers India

Answer
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vani Patil answered.
1 year ago


It is hard to take a very short term view for PSU stocks, but can give a slightly medium-term view of the business? EIL stock is trading at P/E ratio of 14x FY20 core earnings, which is a reasonable valuation for a high value-add business like EIL.

The domestic market expected to remain buoyant due to the ambitious target set by Ministry of Petroleum and Natural Gas of expanding India’s refining capacity to 440 MMTPA from 247 MMTPA by 2040. Demand from hydrocarbons has been strengthening and the current demand-supply statistics implies that India may have to import refined oil in the next few years. That is a huge opportunity for EIL.

Order inflows are likely to be driven by the brown-field expansion of refineries, integration of petrochemical plants with existing refineries and also green-field refinery expansion which includes the Maharashtra Refinery. EIL has also received in-principle approval for Numaligarh Refinery in Assam expansion of capacity.