Patel Engineering, a civil construction company, has experienced a notable shift in its share performance over the past few weeks. After months of struggling to gain momentum, the shares of the company experienced a sudden increase from mid-April, with their value jumping from ₹14.80 apiece to ₹23.25 apiece in just three weeks, representing a remarkable gain of 57%.
At current levels, the stock is trading 75.67% higher than its 52-week low of ₹13.2 apiece and at a seven-month high.
The stock gained steam after ace investor Vijay Kedia bought a fresh stake of 1.3% in the company through his broking firm, Kedia Securities Private Ltd., in Q4 FY23. After the well-known investor's name appeared under the shareholding pattern of the company, the stock witnessed heavy buying.
In addition to that, the substantial orders secured by the company also contributed to the surge in its share price. During Thursday's trade, the stock soared 14.35% in intraday trade after the company announced that it had bagged two major orders along with a joint venture.
The orders include the Tumkur Branch Canal (Package III) Micro Irrigation Project and Sher Micro Irrigation Project. These projects are worth a combined total of Rs. 1,309.88 crore.
Patel Engineering's share in these projects is around Rs. 508.24 crore, with Rs. 158.68 crore coming from its 51% partnership in the Tumkur Branch Canal (Package-III) project and Rs. 349.56 crore from its 35% share in the Sher Micro Irrigation Project.
Back in March, the company won the bid for the Dibang Multipurpose Project worth ₹3,637.12 crore in Arunachal Pradesh from NHPC Limited, a Government of India Enterprise. The company's share in this order is nearly ₹1,818 crore.
"The Dibang Hydropower Project is India's largest-ever hydropower project, which will not only help generate 2,880 megawatts of hydropower once completed but also help with flood control and water storage," Rupen Patel, Chairman and Managing Director of PEL, said in the statement.
Earlier in February, the company secured two projects, a water tunnel, and an irrigation project worth a total of Rs. 1,026 crore in Maharashtra and Karnataka. During the same month, the company, along with its joint venture partners, emerged as the lowest bidder for projects worth Rs. 1,567 crore in Madhya Pradesh and Maharashtra.
These orders include the construction of a pressure irrigation system to supply water in Madhya Pradesh and the construction and commissioning of works comprising of civil and allied works under the lift irrigation scheme of Krishna Marathwada Irrigation Project in Maharashtra.
For the December-ending quarter, the company reported a consolidated net profit of ₹31 crore, a jump of 14.81% from a net profit of ₹27 crore in Q3 FY22. The revenue from operations surged to ₹1,037 crore in Q3, compared to ₹878 crore in a similar quarter last fiscal.
Patel Engineering Ltd. is a 73-year-old company established in 1949. It is engaged in the construction of dams, bridges, tunnels, roads, piling works, industrial structures, and other kinds of heavy civil engineering works.
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