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Patel Engineering: TGT: 223 HORIZON: 1-30 Days
Investment Rationale
Patel Engineering, is a civil engineering major with strong
presence in hydro-power, irrigation and transportation
projects. PEL’s core competency lies in constructing hydropower
plants and up stream irrigation projects.
It is also present in real estate with a bank of 1127 acres,
which it proposes to develop in phased manner. There are
on going projects in Bengaluru and Mumbai at Jogeshwari.
It has also started booking revenue from the Bengaluru
projects and has also received good response for the
launched projects.
Its order book stands at Rs. 100bn including Rs. 10bn L1
orders giving future revenue visibility. Order book break up
mainly dominated by hydel 45% followed by irrigation 40%
its core segment.
The financial closure for the Nagapatnam 1050 MW thermal
project would be achieved soon after getting full clearance
from the Tamil Nadu government.
Most of the headwinds for the company like the order
backlog, poor results, disappointing order inflow, the
stretched balance sheet are all priced in the stock. Once
execution is streamlined with the recovery the stock is
expected to perform well with its order book in hand.
Risks
Delay in execution of projects and stretched working capital cycle
are key concerns.
Technical Comments
The stock is has seen base formation around 180 levels
with huge volumes. The stock has fallen from 400 levels
to 180 levels and now it is ready for strong pullback
rally. One can initiate long positions with stop of 175
levels for the target of 223 levels in coming days.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Patel Engineering: TGT: 223 HORIZON: 1-30 Days
Investment Rationale
Patel Engineering, is a civil engineering major with strong
presence in hydro-power, irrigation and transportation
projects. PEL’s core competency lies in constructing hydropower
plants and up stream irrigation projects.
It is also present in real estate with a bank of 1127 acres,
which it proposes to develop in phased manner. There are
on going projects in Bengaluru and Mumbai at Jogeshwari.
It has also started booking revenue from the Bengaluru
projects and has also received good response for the
launched projects.
Its order book stands at Rs. 100bn including Rs. 10bn L1
orders giving future revenue visibility. Order book break up
mainly dominated by hydel 45% followed by irrigation 40%
its core segment.
The financial closure for the Nagapatnam 1050 MW thermal
project would be achieved soon after getting full clearance
from the Tamil Nadu government.
Most of the headwinds for the company like the order
backlog, poor results, disappointing order inflow, the
stretched balance sheet are all priced in the stock. Once
execution is streamlined with the recovery the stock is
expected to perform well with its order book in hand.
Risks
Delay in execution of projects and stretched working capital cycle
are key concerns.
Technical Comments
The stock is has seen base formation around 180 levels
with huge volumes. The stock has fallen from 400 levels
to 180 levels and now it is ready for strong pullback
rally. One can initiate long positions with stop of 175
levels for the target of 223 levels in coming days.
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