Shares of this smallcap company jumped around 3 percent in Wednesday’s trading session after receiving an order of Rs. 342.76 crores from the Government of Maharashtra. In one year, the shares have delivered a multibagger return of 123 percent to its shareholders.
With a market capitalization of Rs. 4,805 crores, the shares of Patel Engineering Ltd started Wednesday’s trading session on a flatter note at Rs. 55.90 compared to its previous close of Rs. 55.55. During the trading session, the shares hit a high of Rs. 57.90, gaining around 3 percent and are currently trading at Rs. 56.90 apiece.
Such a positive movement in the share price was observed after the company in an exchange filing announced that along with its JV Partner, it had been declared the lowest Bidder (L1) for an irrigation project of Rs. 342.76 crores from the Office of the Executive Engineer, Government of Maharashtra.
The scope of works includes the construction of water lifting arrangement work for the first stage from submergence of the Jigaon project including Civil, Mechanical, and Electrical components and allied works. The project is to be completed in 24 months and is to be executed in a Joint Venture, of which Patel Engineering’s share is 35 percent.
Coming onto the company’s financial statements, the revenue increased by 4 percent from Rs. 1,021 crores during the September quarter to Rs. 1,061 crores in the December quarter. In addition, the net profits zoomed by 82 percent from Rs. 38 crores to Rs. 69 crores during the same period.
As of December 2023, the company’s order book totalled Rs. 19,134.7 crores. Approximately 62 percent of these orders originated from Central Government or PSU entities, while 35 percent were sourced from State Government Departments. The remaining 3 percent of orders were secured from international markets. Moreover, the company’s share in the irrigation project stands at Rs 4,020 crores.
According to the BSE data, Ace Investor Mr Vijay Kedia entered the stock in December 2022 via Kedia Securities Private Limited and currently holds 1.2 crore equity shares equivalent to a 1.42 percent stake in this company. The current holding value of his investment amounts to Rs. 68.40 crores.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 3.78 percent during FY 21-22 to 6.78 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 9.26 percent to 10.64 percent during the same timeframe. Furthermore, the net profit margin increased from 2.63 percent during FY21-22 to 4.26 percent during FY22-23.
Headquartered in Mumbai, Patel Engineering was incorporated in 1949. The company is engaged in the 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.
Written By Vaibhav Patil
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