India Inc: Patel Engineering

Puneet Wadhwa & Jitendra Kumar Gupta

Mumbai March 30, 2010


A robust order book, long-term revenue visibility and an upturn in the economy bode well for the construction firm.

Mumbai-based Patel Engineering has recently won the largest water-front project in Mauritius which includes development of an integrated township in the capital city of Port Louis.

The project is expected to generate a gross revenue of Rs 4,500 crore and will be completed in seven years. The company’s order book now stands at Rs 10,800 crore (including this project), or over four times its FY09 revenue, providing significantly higher revenue visibility.

Besides, the company is commissioning a 1200-Mw plant, for which it has recently got coal linkages for 50 per cent of its requirements. For the rest, Patel is in talk for mines in Indonesia and the deal is expected to be finalised soon. This is a positive development for the company as it has already acquired the land and can now go for financial closure.

The real estate business segment, too, has seen improved traction. It recently sold nearly 71 per cent of the 1,123 apartments in its Bangalore project. Further, it has a 51 per cent stake in a 2.2-million-square-feet residential project in Noida (near New Delhi) and has sold over 1,200 apartments.

The fundamentals are improving for the company in all major business segments. Analysts expect a net profit growth of 30 per cent in FY10 and 25 per cent in both FY11 and FY12.

On a consolidated earnings basis, the stock, at Rs 460, is trading at reasonable valuations of 14 times FY11 and 12 times FY12 estimated earnings. Considering its exposure to build-operate-transfer (BOT) assets, real estate and power, analysts value the stock at Rs 530-550 per share on a sum-of-the-parts basis.

With upcoming projects (Rs 2,000 crore of projects at L1 stage) and the upturn in the economy, especially in power and real estate segments, Patel’s fundamentals seem promising.


Source: Business Standard

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Patel Engineering bags $1bn project in Mauritius

Mar 26, 2010



In an interview with CNBC-TV18, Rupen Patel, MD, Patel Engineering, spoke about the latest happenings in his company and sector.

Here is a verbatim transcript of the exclusive interview with Rupen Patel on CNBC-TV18. Also watch the accompanying video.

Q: Can you confirm whether or not Patel Engineering has actually bagged a USD 1billion project in Mauritius and what this is about?

A: Yes we have bagged a USD 1 billion project in Mauritius. This project involves development of an integrated township within the capital city of Port Louis. This project involves construction of hotels, casinos, gaming centers and would have the largest waterfront development in the southern hemisphere.

Q: Is this a project that you have own as part of a consortium or is the entire project Patel Engineering’s now to see through?

A: It has won by Patel Engineering and its affiliate companies with expert help from outside, it was based on an internationally laid out RSQ.

Q: By when you would start work on this project?

A: The foundation stone is being laid by the Hon. Prime Minister on Monday and thereafter we would be submitting the plan for development and we will start construction immediately thereafter. The first phase of the project should complete in about three years and the total period is about seven years.

Q: Revenue flow would start from when?

A: A year from now on.

Q: What does this do to your total order book position what does it take it up to?

A: It was Rs 10,000 crore some time ago, so now it should increase to about Rs 3,000 crore or thereabouts.

Q: Because this is a government project have you had to offer any pricing discounts or any other kind of lower margin promise on this?

A: No. This project is in line with our target of going into African market, we had ventured into this country about three years ago.


Source: www.moneycontrol.com

Parliament dissolved; May elections

1 April 2010 | 00:02 | FOCUS News Agency



Antananarivo. Mauritius Prime Minister Navinchandra Ramgoolam on Wednesday dissolved parliament, saying his country would hold elections on May 5 this year, reports from Port Louis, the capital of Mauritius, said, Xinhua reported.
"This afternoon, I have informed the President of the Republic that I shall dissolve the National Assembly today. I have decided to call the country for the elections on May 5," the 62-year-old premier declared on state television and local radio.
Ramgoolam said he made the decision to end the speculations about the date of the elections as uncertainties were rising to threaten the national economy.
He had promised to make 2009 the year of the economy and 2010 the year of elections. "The hour of the democratic rendez-vous has arrived. I have arrived at the end of my mandate," he said.

Readying for rebound

By Jean Paul Arouff

PORT LOUIS Mar 31 (Reuters)

Mauritius' economy will grow faster than previously thought this year after weathering the global downturn well, the Central Statistics Office (CSO) said, supported by infrastructure spending and a rebound in key sectors.

Gross domestic product will grow 4.6 percent in 2010 with the high-profile hotel and restaurant sector seen expanding 5.1 percent -- against an overall rise of 3.1 percent last year, the CSO said on Wednesday.

The headline figure undercut a forecast of 4.7 percent to 5.0 percent for 2010 given to Reuters late on Tuesday by Finance Minister Ramakrishna Sithanen.

But it beat a forecast of 4.3 percent made in December by the CSO, which also revised upwards a previous estimate of 2.8 percent for last year.

Last week, the central bank's chief economist put the 2009 growth figure at 3.0 percent.

"(Last year's increase is) mostly due to higher growth in food manufacturing, textile manufacturing, construction and hotels and restaurants, partly offset by a lower growth in the sugar sector," the CSO said.

The manufacturing sector, comprising mainly textiles and food processing, is expected to grow by 2.1 percent this year, up from 1.1 percent in 2009, the statistics office said.

The construction sector is projected to grow by 8 percent against 6.5 percent, thanks in part to public infrastructure projects laid out in the last budget.
Best known for its luxury spas and white sand beaches, Mauritius' hotel and restaurant sector is expected to welcome 915,000 visitors this year, the CSO said.

Finance Minister Sithanen said he expected the tourism sector to grow at about 8-10 percent, and textile and clothing by 3-4 percent. Both are key drivers of the almost $10 billion economy and key sources of foreign exchange.

Earlier this month, Mauritius' Monetary Policy Committee (MPC) said it expected real economic activity to remain below potential over the next few quarters owing to a still subdued performance expected in export sectors.

The committee held the central bank's benchmark lending rate at 5.75 percent for the fourth straight quarter on March 23.

Economic analysts say the Indian Ocean island's economy, consistently one of Africa's strongest performers, has coped better than expected with the global downturn.

5% growth for 2010

By Hereward Holland

LONDON, March 30 (Reuters) -

Strong performance in the tourism and textile sectors will bolster the Mauritian economy to 4.7-5.0 percent growth in 2010, up from 3 percent the previous year, a top official said on Tuesday.

Dr Ramakrishna Sithanen, vice prime minister and minister of finance, said the economy of the Indian Ocean island was beginning to gain momentum following the global slowdown in 2009, with inflation creeping up to 3 percent by end of the year, from 2.1 percent in February.

"We are expecting growth of about 4.7 percent based on a slow recovery on the world market. If the recovery is more robust... then probably we are going to make 5 percent economic growth," he told Reuters on the sidelines of an investment conference.

"We think that tourism will grow at about 8-10 percent, and textile and clothing should grow by about 3-4 percent."

However, the Monetary Policy Committee told Reuters earlier this month real economic activity is forecast to stay below potential over the next few quarters owing to a still subdued performance expected in export sectors.

Mauritius, the top-ranked African country in the 2009 World Bank Doing Business Report, hopes to attract more tourists from Australia, Asia and eastern Europe as well as diversify its tourism portfolio, Sithanen said.

Tourism constituted 7.5 percent of the $10 billion economy in 2009, according to figures provided at the conference.

The island nation, which is a net food and energy importer, will continue to see a negative trade balance offset by foreign direct investment and tourist receipts, he said, resulting in a surplus balance of payments in 2010.

The current account deficit is expected to widen to 7.9 percent in 2010 from 7.7 percent in 2009, according to the central bank.

In 2009 Mauritius won first place in the Mo Ibrahim Index of African governance. The country is considering setting up a sovereign wealth fund from its balance of payments surplus and a highly successful pension scheme.

"We are thinking about whether it makes sense," he said. "We could invest abroad in order to optimise the return."