Engineers India rises over 12%

Engineers India put out a note on the Covid impact on its operations. It said:

a: The Company resumed partial services from 20th April, 2020, after implementation of standard protocols.

b: Presently, the Company does not foresee any significant impact on its fulfilment of obligations to the customers for existing contracts/arrangements, although there may be delays in the schedules for completion of contracts/arrangements.

c: Due to disruption in Supply Chain Management and unavailability of labour especially in Quarter-1 and Quarter-2 of current financial year, the execution of projects of clients may get delayed. However, this may have impact only in the medium term on Company's operations.

d: There may be delay in execution of ongoing projects due to outbreak of CoVID-19 due to re-scheduling of timelines. Further, some clients may revisit their Capex Plan and may defer some projects. However, above may have impact on demand for Company's services on medium term basis.

e: The Company is a debt free and is having adequate cash reserves to meet its capex requirements. Working capital limits from the Banks is in form of non-und based limits. As such there is no issue on serviceability of debt.

f: None of the assets have been impacted and we do not foresee any impairment of assets due to CoVID-19.

g: Given the current situation there may be delays in execution of certain projects and resultant impact on revenue and profitability going forward. However, the full impact with credibility of CoVID-19 is not ascertainable at this stage.

The market is pretty happy with this and finds it more optimistic, especially the ‘debt-free’ part. The stock opened 2.5% higher at Rs.74.10 and rose to an intraday high at Rs.81.45, rising 12.5%. Volumes are up over 2.5 times.