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Patel Engineering net profit up 25.82%

Business

Patel Engineering Ltd has announced a 25.82% rise in consolidated net profit at Rs77.03 crore in the half-year ended September 30, 2009 compared to Rs 61.22 crore in the corresponding period last year. Meanwhile, consolidated revenues grew by 25.07% to Rs 1,250.98 crore compared to Rs 1000.20 crore in the corresponding period ended September 30, 2008.
For the half-year ended September 30, 2009, the EBIDTA margins stood at 17.52% compared to 15.20% in the corresponding period last year. Higher share of hydropower and irrigation projects with better control on construction cost helped the company to improve the margins. The earning per shares stood at Rs 12.92 for the half-year ended September 30, 2009.

Q2FY10 Performance
Consolidated revenue grew 37.61% rise at Rs 607.98 crore for the second quarter ended September 30, 2009 (Q2FY10) compared to Rs 441.81 crore in the corresponding quarter last year. During the quarter, consolidated net profit grew by 26.76% to Rs 40.69 crore compared to Rs 32.10 crore in the corresponding quarter last year.

QIP Issue
The company has allotted 72,18,061 fully paid up equity shares of Re 1 each on October 26, 2009 by way of Qualified Institutional Placement (QIP) at a price of Rs. 477.03 per equity share (including a premium of Rs. 476.03 per equity share), aggregating to Rs 344.32 crore. The fund raised by the company would be used for various expansion plans, its subsidiaries, joint ventures and other bodies corporate where the company may hold a stake, meet longterm working capital requirements, repay debts and for any other permissible uses.

Order Book Position
As on September 30, 2009, company’s order book position stood at Rs 9,900 crore, including L1 position of around Rs 3,000 crore. Orders from hydropower sector constitute around 48% of the total order book position and 43% from the irrigation segment. Meanwhile, the company has bid for projects of approximately Rs 9,572 crore, of which hydro power projects constitutes 92.80%.

Update on asset ownership business
The company is scaling up its asset ownership business in power and real estates. In its power vertical; it is in process of setting up a 1,320 MW thermal power plant at Nagapatnam District in Tamil Nadu and 90 MW hydro power project at Gongri, Arunachal Pradesh. The company hopes to achieve financial closure for the Nagapatnam project by Q1FY11 and start work thereon.

Meanwhile, the company has a historical land-bank of over 1,100 acres in various states. It has developed a commercial office, Patel Corporate Park located in Mumbai. Further, the company has received formal approvals from the Ministry of Commerce and Industry, Department of Commerce, SEZ Section for setting up two IT and ITES SEZ projects on land measuring 63.01 acres and 25.37 acres respectively.

Management comments
“With the economy now showing signs of recovery, the infrastructure sector is witnessing govt’s commitment to encourage fast-track development and attract private investment especially in power segment, the company is poised to exploit these emerging opportunities to the fullest extent, said Mr Rupen Patel, Managing Director, Patel Engineering while commenting on the business outlook.
He also added, “The various operational measures taken in the area of risk management, project management, value engineering, supply chain, etc in the last few months are stabilising and we hope to have a better second half. Further, we expect a number of infrastructure, power and irrigation tenders being awarded in the coming months.”

About Patel Engineering Ltd
(BSE: 531120, NSE: PATELENG, Bloomberg: PEC IN, Reuters: PENG.BO)
An ISO 9001-2000 certified company set up in 1949, Patel Engineering is a construction company specialising in hydro-power generation and irrigation segment. It has executed projects in the field of tunnelling, underground works for hydroelectric & irrigation projects, nuclear and thermal power projects, bridges and marine works and public health projects.
Patel Engineering has till date completed over 175 km of tunnelling work, 78 Dams, and 40 hydroelectric projects in India and over 30 micro tunnelling projects in India and US. Patel Engineering is one of the few Indian companies in this segment, which have presence in the US market.
The company has two wholly-owned subsidiaries namely, ASI RCC Inc and Westcon Microtunnelling Inc. for undertaking and executing complex projects in various parts of the world.

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