Shares of a company in Vijay Kedia’s portfolio zoomed 5% on Tuesday’s early trades to reach an intraday high of ₹ 58.80 apiece on the National Stock Exchange (NSE) after the company’s joint venture received an order worth ₹ 1275.30 crores from Madhya Pradesh Jal Nigam.
According to an exchange filing, Patel Engineering, a Mumbai-based infrastructure company has been declared the lowest bidder in a joint venture for a contract worth ₹ 1275.30 crores. Patel Engineering’s share in the joint venture is 35% or 446.36 crores.
This contract involves engineering, procurement, construction, testing, commissioning, trial run and operation & maintenance for 10 years of Narmada-Gambhir, District Ujjain and Indore Multi-Village Drinking Water Supply Scheme in a Single Package on a ‘Turn-key Job Basis’. The project is to be completed in a period of 24 months and further operations and maintenance for the whole scheme are to be carried out for a period of 10 years.
Patel Engineering is engaged in the business of construction of dams, bridges, tunnels, roads, piling works, industrial structures and other kinds of heavy civil engineering works in areas like hydro, irrigation & water supply, urban infrastructure and transport.
Ace investor Vijay Kedia through his company Kedia Securities Pvt Ltd holds 1.3 crore shares or a 1.68% stake in the company.
The company’s share price rallied 324.55% in the past six months to deliver multibagger returns as its share price increased from ₹ 13.85 to ₹ 58.80 apiece. If an investor had invested ₹ 1 lakh in the company’s shares six months ago, the value of their holdings would have been ₹ 4.24 lakhs today!
With a market capitalization of ₹ 4,125 crores, Patel Engineering is a small-cap company. It has a low return on equity of 6.96% and an ideal debt-to-equity ratio of 0.61. Its shares were trading at a price-to-earnings ratio (P/E) of 26.76, which is higher than the industry P/E of 7.80, indicating that the stock might be overvalued as compared to its peers.
Written by Simran Bafna
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