Patel Engineering in green

Patel Engineering announced today morning that it has emerged as the lowest bidder (L1) for City and Industrial Development Corporation (“CIDCO”) and Visvesvaraya Jala Nigam Ltd (“VJNL) for works including design and construction of a long treated water tunnel from Sai Village to Vindhane Village in Raigad District and for Survey, Design, Supply, Install, Test and Commission a Micro Irrigation System under Tumkur Branch Canal in the state of Karnataka.

The Micro Irrigation project with a total value of Rs. 471 crore is to be executed with a JV partner, of which Patel’s share in the new order is worth Rs 240 crore while the Water Tunnel Project worth Rs 556 crore is to be executed without any joint venture partnership.

Majority of the Company’s order book comprises of projects which are awarded by Central / State Governments or other Government undertakings/ Public Sector Undertakings.

Mr Rupen Patel, Chairman and Managing Director of the company said, “With these orders we reach a total L1 of 1,802 cr. Recently we were also declared L1 for projects in MP and Maharashtra too to a tune of Rs 1,567 crore, our share being Rs. 1,006 crore, which were also catering to Irrigation Systems. We are thankful to the CIDCO and VJNL management to declare us L1 for their projects and will work towards delivering the projects in 60 and 24 months, as stipulated in the bid. This would take our share of order wins in this financial year to more than 5,400 crore. Our orderbook including all the L1 orders of Rs. 1,802 crore would stand at Rs 18,600 crore which gives us a good revenue visibility for the next 4-5 years.”

The market mood is currently negative and that is why this good news is not reflected in the stock price on announcement of this news. Nevertheless, the stock price earlier rose 2.5% to Rs.14.15 and is now trading status quo at Rs.13.80, closer to its 52-week low of Rs.13.55 than its 52-week high of Rs.26.80, indicating the potential upside from this level.