Engineers India Posts 21% Jump In Q2 Profit

New Delhi: State-owned Engineers India Ltd on Wednesday reported a 21 per cent jump in net profit for the September quarter and declared a 1:1 bonus share. 

Net profit in July-September rose to Rs. 93.75 crore, as compared to Rs. 77.21 crore in the corresponding period a year ago, the company said in a regulatory filing.

Turnover, however, decreased to Rs. 394.98 crore for the quarter ended September 30, from Rs.510.32 crore in Q2 of last fiscal year. 

EIL said its board at its meeting on Wednesday recommended the issue of bonus shares in the proportion of one new equity share of Rs. 5 each for every one existing equity shares of Rs. 5 each fully paid up of the company.

A bonus issue, also known as a scrip issue or a capitalisation issue, is an offer of free additional shares to existing shareholders. A company often distributes such shares as an alternative to increase the dividend payout. 

EIL had last issued a 2:1 bonus share in March 2010. A similar ratio bonus share was issued in December 1999 and August 1999.

The government had asked profit making public sector units to issue bonus share, do share split or pay special dividend to help capitalise its holding.

1.5 Million Engineering Pass Outs In India Every Year, Fewer Getting Hired

Engineering colleges have been springing up like wild mushrooms in India in the last few years. Their number has gone up from a not too modest 1,511 colleges in 2006-07 to an astoundingly high 3,345 in 2014-15. The state of Andhra Pradesh alone has more than 700 colleges

If these figures are anything to go by, it would be easy to be led into believing that opting for a degree in engineering would be a wise career move in India. The fact, however, remains that 20-33% out of the 1.5 million engineers in India are passing out every year run the risk of not getting a job at all, points out EconomicTimes. For those who do, the entry-level salary is pathetically low and has stagnated at that level for the last eight-nine years, though the prices of everything from groceries to vehicle fuel have shot up during the same period.

Whether it is the below-par quality of education provided by private colleges or the stagnating (if not shrinking) demand for the number of engineers, the huge number of engineering pass outs – which, incidentally, is more than the total number of engineers produced by the USA and China combined together, face a bleak future.

A large percentage of the ‘fortunate’ ones who do end up getting a job after an engineering degree take up jobs which are well below their technical qualifications since the supply far outnumbers the demand. They do not get jobs for which they are qualified or ‘suitable’ jobs, which makes the matters worse.

All the more threatening is the fact that the two key industries which hire engineers in India – the IT and ITes and the manufacturing sector- are also hiring a lesser number of them than before.

The rapid growth in the number of engineering colleges can be attributed to an ecosystem built around feeding the $110 billion outsourcing market and the huge demand for engineers in the IT sector in India itself.

Making matters worse is the fact that the start-up salary offered to fresh engineering pass outs is expected to stagnate at more or less the same level in the next 3- 5 years, said LiveMint last year. Entry level salary package for a software engineer which has hovered around Rs 2.75 lakh to Rs 3.25 lakh ($4,600- $5,400 per annum) since the last eight-nine years should not, therefore, hope for a turnaround or for better days.

The situation is grimmer for Tier II and Tier III colleges. The huge disparity between start out the salary for top colleges and the not so highly sought after ones, which has already been highly pronounced, is expected to widen further. While average startup salary for an IIT pass out is Rs 9-10 lakh ($15-16,000) per year, that of a second-grade college pass out is barely Rs 1.80-2 lakh ($3,000-3,300) a year.

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