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Volatility in turnkey margins
View Risks →Deepak Builders & Engineers India Limited — Q3 FY26
Engineers India reported a stellar Q3 FY26 with revenue of ₹1,194 crore (+59% YoY) and PAT of ₹302 crore (+243% YoY), driven by strong execution and a one-time reversal of ₹213 crore in provisions.
bullish
high
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Engineers India reported a stellar Q3 FY26 with revenue of ₹1,194 crore (+59% YoY) and PAT of ₹302 crore (+243% YoY), driven by strong execution and a one-time reversal of ₹213 crore in provisions. EBITDA margin expanded to 28% (vs 11% in Q2), partly due to the reversal. Order book reached a record ₹15,670 crore (67% consultancy), with YTD order inflow of ₹7,700 crore. Management guided for FY26 revenue exceeding ₹4,000 crore and expects to sustain similar order inflow levels. Key risks include volatility in turnkey margins (guided 6-7%) and dependency on client investment decisions for pipeline conversion.
इंजीनियर्स इंडिया ने तीसरी तिमाही में शानदार प्रदर्शन किया। कंपनी की कमाई ₹1,194 करोड़ रही, जो पिछले साल से 59% ज्यादा है। मुनाफा ₹302 करोड़ हुआ, जो 243% बढ़ा। इसकी वजह अच्छा काम और ₹213 करोड़ के पुराने प्रावधानों का वापस मिलना है। कंपनी की कमाई पर खर्च का अनुपात 28% रहा, जो पिछली तिमाही के 11% से काफी बेहतर है। ऑर्डर बुक ₹15,670 करोड़ के रिकॉर्ड स्तर पर पहुंच गया, जिसमें 67% सलाहकारी सेवाएं हैं। इस साल अब तक ₹7,700 करोड़ के नए ऑर्डर मिले हैं। प्रबंधन का अनुमान है कि पूरे साल की कमाई ₹4,000 करोड़ से ज्यादा होगी। जोखिम की बात करें तो टर्नकी कॉन्ट्रैक्ट में मुनाफा 6-7% के आसपास रह सकता है और नए ऑर्डर ग्राहकों के निवेश फैसलों पर निर्भर करेंगे।
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Read Transcript →Quarter Snapshot
Order Book
₹15,670 crore
+25% QoQ
Highest ever order book, comprising ₹10,700 crore consultancy and ₹5,000 crore turnkey.
Order Inflow (YTD)
₹7,700 crore
+88% YoY
Includes ₹3,250 crore Dangote refinery order in January 2026.
Consultancy Segment Profit Margin
22-25%
Stable
Management reiterated sustainable margin range for consultancy business.
EPS (Q3)
₹5.37
+168% QoQ
EPS improved from ₹2.04 in Q2 FY26, driven by higher profitability.
What Changed vs Last Quarter
NEW
FY27 revenue minimum ₹4,000 crore
Next year's revenue target set at a minimum of ₹4,000 crore, with potential upside.
NEW
Turnkey margin guided at 6-7%
Long-term EBITDA margin for turnkey segment expected around 6-7%, with quarterly fluctuations.
UPDATED
FY26 revenue to exceed ₹4,000 crore
Management expects full-year revenue to cross ₹4,000 crore, with Q4 being a strong quarter.
UPDATED
Order inflow to sustain at 8,000+ crore annually
Management expects to maintain order inflow of ₹8,000 crore or more in coming years.
DROPPED
FY26 revenue growth of 25%+
Management expects full-year revenue growth of 25% or more, implying turnover of ~₹3,800-3,900 crore.
DROPPED
Consultancy segment profit margin of ~25%
Management expects to maintain consultancy segment profit margin around 25% on an overall basis for FY26.
DROPPED
LSTK segment profit margin of 6-7%
Management guided for LSTK (turnkey) segment profit margin to be maintained at 6-7%.
NEW RISK
Volatility in turnkey margins
Turnkey margins are volatile; Q3 saw 11% but management guided 6-7% long-term, implying potential compression.
NEW RISK
Dependence on client investment decisions
Order inflow pipeline depends on PSU investment decisions; delays could impact future order book growth.
NEW RISK
One-off provision reversals distort profitability
Q3 PAT included ₹213 crore provision reversal; such reversals are routine but unpredictable, making earnings lumpy.
NEW RISK
Execution risk on large orders
Large orders like Dangote refinery have 3-4 year cycles; execution delays could impact revenue recognition.
RISK GONE
Ramagundam fertilizer plant losses
Associate Ramagundam fertilizer plant incurred losses of ~₹25 crore in Q2 due to a 45-day shutdown, impacting consolidated PAT.
RISK GONE
Overseas consultancy revenue conversion
Despite a large overseas order book, overseas consultancy revenue declined to ₹70-75 cr quarterly run rate from ₹85-100 cr last year, raising execution concerns.
RISK GONE
Provision write-back volatility
Q2 EBITDA was boosted by a ₹35 cr provision write-back; net provision impact was negative ₹12 cr, indicating potential volatility in margins.
🤫 Topics management stopped discussing
Mentioned in Q1 FY26, Q2 FY26
Management expects to maintain consultancy segment profit margin around 25% on an overall basis for FY26.
Mentioned in Q1 FY26, Q2 FY26
Management expects full-year revenue growth of 25% or more, implying turnover of ~₹3,800-3,900 crore.
Fast read
Guidance and risk preview
Management expects full-year revenue to cross ₹4,000 crore, with Q4 being a strong quarter.
Turnkey margins are volatile; Q3 saw 11% but management guided 6-7% long-term, implying potential compression.
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