ICICI Securities: ISGEC Heavy Engineering On A Strong Footing Despite Headwinds
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ICICI Securities Report
ISGEC Heavy Engineering Ltd. is currently at an inflection point in terms of transition towards higher proportion of turnkey contracts and execution of projects in diversified segments like emission control, factory construction, coal handling, etc., which are relatively new segments for the company.
The working capital intensity is likely to increase in the near term due to change in mix towards engineering procurement and construction and flue gas desulfurization; however, we believe, the company has strong balance sheet to manage the same.
Delay in the sale of the Philippines factory and high remuneration by promoters (approximately 11% of profit before tax) are certain risks keeping the valuation at lower levels.
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