Stocks of Patel Engineering Limited jumped around 10.5 percent and currently trade at Rs 23.45. The scrip, in the past one-month period, has gained around 56 percent ranging from Rs 15.05 to the current price levels.
One of the probable reasons for the stock prices to go up is the recent Press Release filed by Patel Engineering with the exchange during the early trading hours today. The filing mentioned that the company, along with the JV Partners, has received a Letter of Acceptance (LoA) for 2 projects. The aggregate value of the projects is worth Rs 1,309.88 crores.
The first one is pertaining to the Tumkur Branch Canal (Package III) Micro Irrigation Project which the company got from Visvesvaraya Jala Nigam Limited (VJNL). The project involves survey, design, installation, and commissioning comprising gravity bulk feeders, supply & installation of Pumping Machineries, Electrical substations, Terminal Bay, etc.
Another one includes the Sher Micro Irrigation Project which the company got from the Water Resources Department, Government of Madhya Pradesh which involves the survey, designing, and construction of SHER Dams with all kinds of ancillary work including gravity main and pipe distribution network works in the State of Madhya Pradesh.
Ace Investor Mr. Vijay Kedia made a fresh buy of 10 Million shares (equating to 1.3 percent) in the company. The holding value of the investment stands at Rs 23.6 crores.
Patel Engineering Limited, founded in 1949, is one of the most integrated infrastructure and construction services conglomerates in India specializing in Transportation projects, Hydroelectric projects, Water Treatment projects, as well as Real Estate such as townships, buildings, malls, etc.
Digging into the financials, the company has been successful in improving its revenues and PAT figures with the recent representation in its statements showing a movement in the revenues from Rs 893 crores in Q2 to Rs 1,037 crores in Q3. Moreover, the PAT numbers improved from Rs 16 crores to Rs 38 crores during the same period.
The profitability metrics have also shown operational efficiencies in the recent period with some positive movements in the basic ratios pertaining to the return on equity (ROE) and return on capital employed (ROCE). The former transitioned from negative returns of 11.4 percent in FY20-21 to positive returns of 3 percent in FY21-22. The latter, during the same horizon, took a shift from 1.23 percent to 11.69 percent.
The debt-to-equity ratio of the company, on a positive note, reduced from 1.01 during FY20-21 to 0.97 in FY21-22 bringing down to the desired levels.
Written by Amit Madnani
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