In Friday’s trading session, the shares of one of the pioneers in integrated infrastructure and construction services in India surged 0.7 percent to hit an intraday high of Rs. 58.75 on BSE.
With a market capitalisation of Rs. 4,838.3 crores, the shares of Patel Engineering Limited opened in the green at Rs. 58.51, up by 0.3 percent, as against its previous closing price of Rs. 58.37.
Company Guidance:
Patel Engineering Limited is targeting revenue growth of 15-20 percent over the next five financial years, driven by increased opportunities in the hydropower sector, according to Managing Director Kavita Shirvaikar’s interview with NDTV.
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The government has been significantly increasing its investments in hydropower projects nationwide, recently approving projects worth Rs. 4,136 crore in the northeast.
Patel Engineering plans to expand its current order book, valued at nearly Rs. 18,000 crore, by an additional Rs. 10,000 crore to Rs. 15,000 crore within the coming year, according to Shirvaikar.
The company has identified new opportunities and is actively engaging in bidding for upcoming projects.
According to the Managing Director, the company has targeted projects valued at about Rs. 50,000 crore for future bids.
Earlier this year in April, Patel Engineering raised Rs. 400 crore through a qualified institutional placement (QIP) at a floor price of Rs. 59.50 per share. Shirvaikar explained that these funds will support the company’s working capital needs for its projects.
Shirvaikar also mentioned that revenue growth might be relatively lower in FY25 due to the extended duration of hydropower projects.
The Managing Director stated that 60 percent of hydropower projects have a time cycle of four to five years. Given this extended timeline, the company anticipates a 10 percent revenue growth in FY25. Despite this, the company is expected to maintain a margin of 14-15 percent in FY25.
Previous News:
On 29th August, Patel Engineering signed a Memorandum of Understanding (MoU) with Rail Vikas Nigam Limited (RVNL), initiating a strategic partnership focused on collaboratively undertaking hydro and other infrastructure projects, both domestically and internationally.
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This agreement establishes a framework for collaboration, enabling the company and RVNL to combine their strengths and capabilities in pursuing these hydro and other infrastructure projects.
Financials:
The company experienced a marginal decline in its consolidated revenue from operations, showing a year-on-year fall of 1.5 percent from Rs. 1,119 crores in Q1 FY24 to Rs. 1,102 crores in Q1 FY25.
However, its net profit increased during the same period from Rs. 43 crores to Rs. 55 crores, indicating a growth of around 28 percent YoY.
Presently, in India, nearly 18,000 MW of Hydropower is Under Execution out of which Patel Engineering is involved in the construction of around 8,000 MW.
Shareholding Pattern:
As per the latest shareholding pattern, the Promoters hold a 36.11 percent stake in the company, Foreign Institutional Investors (FII) hold a 3.68 percent stake, while Retail Investors and Domestic Institutional Investors (DII) hold a 49.59 percent and 6.22 percent stake in Patel Engineering, respectively.
As of June 2024 shareholding data available with the BSE, Vijay Kedia via Kedia Securities Private Limited holds 1.2 crore equity shares or equivalent to a 1.42 percent stake in the company.
Stock Performance:
The stock has delivered positive returns of nearly 0.8 percent in one year, but around 12 percent of negative returns year-to-date.
About the Company
Established in 1949, Patel Engineering Limited is a civil construction company specializing in the hydropower and irrigation segments. It is engaged in the construction of dams, bridges, tunnels, roads, piling works, industrial structures and other kinds of heavy civil engineering works.
The company has also executed a variety of infrastructure projects in technology-intensive areas like hydropower, irrigation & water supply, urban infrastructure, and transportation segments, especially in tunnels and underground works for hydroelectric and transportation projects primarily as civil contractors.
Written by Shivani Singh
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