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