One of the infrastructure stocks engaged in the construction of dams, bridges, tunnels, roads, and piling works. The company has set a target of achieving 20% growth in revenue for the next five years
Stock movement
In Thursday’s trading session, Patel Engineering Limited‘s share jumped intraday high of 5.04 percent from the previous close of Rs. 50.17. The stock opened at Rs. 51.51 and is currently trading at Rs. 51.21, with a high of Rs. 52.70 and a low of Rs. 50.96. The market capitalization now stands at approximately Rs. 4,324.05 crore
What is the news
Patel Engineering Limited aims for 15-20% annual revenue growth over the next five years, driven by expanding opportunities in the hydropower sector, says Managing Director Kavita Shirvaikar.
The company plans to capitalize on the government’s increased focus on hydropower, especially following recent approvals for ₹4,136 crore in projects in the northeast.
Shirvaikar expressed confidence in the company’s growth prospects, stating, “Looking at the opportunity in this sector, we are confident of maintaining our revenue growth of 15-20% in the next five years.” She also highlighted that Patel Engineering has identified around ₹50,000 crore worth of projects to bid on in the near future, adding, “We have identified around Rs 50,000 crore worth of projects that we are going to bid on in the near future.”
Regarding the hydropower sector’s timelines, she explained, “In 60% of hydropower projects, we have a time cycle of four to five years. Considering the overall time cycle, in FY25 we expect a 10% revenue growth.” Despite this, she confirmed that the company will maintain its margin, stating, “The company, however, is set to maintain a margin of 14-15% for this fiscal year.”
Patel Engineering anticipates increasing its order book by ₹10,000 to ₹15,000 crore from its current level of approximately ₹18,000 crore over the coming year, according to her statement.
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Recent Developments
In April of this year, the company secured Rs. 400 crore through a qualified institutional placement, with a floor price set at ₹59.50 per share. “This will meet our working capital requirements for the projects.”
Patel Engineering recently entered into a Memorandum of Understanding with the government-owned Rail Vikas Nigam Ltd. to collaborate on hydro and infrastructure projects.
Under this agreement, the two companies will jointly bid on major hydro and other infrastructure projects.
Order book:
In Q2 FY25, Patel Engineering Limited’s order book stands at Rs. 17,260 crore, with hydroelectric projects dominating at 63.45% (Rs. 10,951.7 crore) across 15 projects. The order book is primarily concentrated in government sectors, with central government/PSUs accounting for 62.49% of orders. Project completion status shows a balanced distribution, with 30.27% of projects in the 50-70% completion range.
Recent quarter results and ratios
Patel Engineering Limited’s revenue has increased from Rs. 1,021 crore in Q2 FY24 to Rs. 1,174 crore in Q2 FY25, which has grown by 14.99 percent YOY. The net profit of Kalpataru Projects International Limited has also grown by 92.11 percent, from Rs. 38 crore in Q2 FY24 to Rs. 73 crore in Q2 FY25.
Patel Engineering Limited’s revenue and net profit have grown at a CAGR of 13.98 percent and 13.49%, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE should be 13.9% and 7.5%, respectively. The debt-to-equity ratio of the company is to be 0.40x, which shows the company is almost debt-free. Patel Engineering Limited’s EPS is to be Rs. 4.01.
Company Overview
Patel Engineering Limited was founded in 1949 and headquartered in Mumbai, India. The company is a prominent civil engineering and construction company. It specializes in a wide range of infrastructure projects, including dams, tunnels, hydroelectric projects, irrigation systems, highways, bridges, and urban infrastructure.
The company has executed over 250 projects across various sectors, demonstrating its extensive experience and capability in the construction industry.
Written By – Nikhil Naik
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