Fresh investments can be considered at current levels. Investors can book profits at levels around 30 per cent higher than now. After a high of Rs 180 in February 2001, the Engineers India stock has retraced to Rs 94. The earnings performance for 2001 was not impressive. Further, there was no clear indication if the company is to come up for disinvestment.
Cash flows depend largely on the availability of projects in the core sector.
Though the company has announced intentions to diversify, the benefits may take time to accrue. At current levels, there is no incentive for investors to trim their exposures. Rather, there might be some interest in the company on expectations of disinvestment. In this backdrop, shareholders can stay invested and consider trimming exposures at the Rs 130 levels. Unless, of course, the uptrend is driven by sizeable disinvestment to a strategic investor.