Companies with order books that surpass their market capitalization provide an attractive investment opportunity. This circumstance arises when a company’s future contracted revenue exceeds its existing stock market worth. It frequently signals potential undervaluation or market skepticism about the company’s capacity to fulfill orders profitably.
This tendency is especially prevalent in industries with lengthy project cycles, such as infrastructure, defense, and heavy engineering. Investors evaluating these companies must analyze aspects such as execution capability, profit margins, and industry dynamics to determine whether this disparity represents a fair investment opportunity.
1. ITD Cementation India Limited
ITD Cementation India Limited is a prominent player in the construction and engineering sector in India, primarily focusing on heavy infrastructure projects. Below is an overview of the company, including its history, operations, and corporate philosophy. With a market capitalization of Rs. 8,894 crores, ITD Cementation India Limited’s share price closed at Rs. 518 per equity share.
As of September 2024, ITD Cementation India Limited demonstrates a robust order book of Rs. 17,986 crore, which is higher than the market capitalization of Rs. 8,894 crore. The company secured new orders worth Rs. 3,850 crore in FY25, serving a diverse clientele including Government (50%), PSU (11%), and Private Sector (39%).
The company’s portfolio is diversified across sectors, with Maritime Structures leading at 32.4% (Rs. 5,834 crore), followed by Urban Infrastructure at 19.7% (Rs. 3,549 crore), Industrial Structures and Buildings at 17.2% (Rs. 3,095 crore), Highway, Bridges, and Flyovers at 14.2% (Rs. 2549 crore), and Hydro, Dams, Tunnels, and Irrigation at 10.8% (Rs. 1942 crore).
ITD Cementation India Limited’s revenue from operations has increased by 51.60 percent from Rs. 5,091 crore in FY23 to Rs. 7,718 crore in FY24. The company’s net profit has increased from Rs. 125 crore in FY23 to Rs. 274 crore in FY24, which has grown by 119.2 percent.
2. Patel Engineering Limited
Patel Engineering Limited was founded in 1949 and headquartered in Mumbai, India. The company is a prominent civil engineering and construction, including dams, tunnels, hydroelectric projects, irrigation systems, highways, bridges, and urban infrastructure. With a market capitalization of Rs. 4,316 crores, Patel Engineering Limited’s share price closed at Rs. 51.1 per equity share.
As of September 2024, Patel Engineering Limited presents a strong order book of Rs. 17,260.7 crore, which is higher than the market capitalization of Rs. 4,316 crore. The
company orders serving a diverse clientele including central government (62.48%), state government departments (34.47%), and international (3.05%)
The company’s portfolio is diversified into hydroelectric leading at 63.45% (Rs. 10,951.7 crore), followed by Irrigation at 21.21% (Rs. 3,661.2 crore), the tunnel at 10.46% (Rs. 1,804.6 crore), the road at 1.78% (Rs. 307.5 crore), and others at 3.10% (Rs. 537.5 crore).
Patel Engineering Limited’s revenue from operations has increased by 16.78 percent from Rs. 3,891 crore in FY23 to Rs. 4,544 crore in FY24. The company’s net profit has increased from Rs. 183 crore in FY23 to Rs. 290 crore in FY24, which has grown by 58.47 percent.
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3. KEC International Limited
KEC International Ltd is a leading global player in the infrastructure sector, specializing in Engineering, Procurement, and Construction (EPC) services. The company is part of the RPG Enterprises group and has established a significant presence across various sectors and geographies. With a market capitalization of Rs. 26,776 crores, Patel Engineering Limited’s share price closed at Rs. 1,006 per equity share.
As of September 2024, Patel Engineering Limited presents a strong order book of Rs. 34,088 crore, which is higher than the market capitalization of Rs. 26,776 crore. The company’s order book has received orders domestically by 67% and internationally by 33%.
The company’s portfolio is diversified across sectors, with T&D leading at 55%, followed by civil at 27%, railways at 11%, renewables at 3%, cables at 2%, and oil and gas at 2%.
K E C International Limited’s revenue from operations has increased by 15.23 percent from Rs. 17,282 crore in FY23 to Rs. 19,914 crore in FY24. The company’s net profit has increased from Rs. 176 crore in FY23 to Rs. 347 crore in FY24, which has grown by 97.16 percent.
Written By – Nikhil Naik
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