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Patel Engineering sees 20-25% revenue growth in FY10

Patel Engineering sees 20-25% revenue growth in FY10
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First Published: Mon, Jan 11 2010. 05 38 PM IST
Updated: Mon, Jan 11 2010. 05 38 PM IST
Mumbai: Engineering and construction firm Patel Engineering expects 20 to 25% revenue growth in 2009-10, helped by the government’s focus in various infrastructure segments, a top official told Reuters on Monday.
The Mumbai-based firm, which has an existing order book of about Rs70 billion, expects about Rs30 billion more of orders in the current quarter, anaging director Rupen Patel, told Reuters over the telephone.
“Primarily, if you look at the government spending, the bulk of the government spending, 85% spending is in power, water and urban infrastructure. We operate in all those segments,” he said.
Infrastructure bottlenecks, have long been a drag on Asia’s third-largest economy, knocking an estimated 2 percentage points off its growth. The country requires $500 billion investments in infrastructure till 2012.
“I see a robust (orderbook) growth of at least 35%, because the economy is growing at 8 percent and infrastructure segment should grow double of that...,” Patel said.
Patel Engineering is also in the process of setting up of two power projects — a 1,000 MW coal-based thermal project in Tamilnadu and a 90-MW hydro project in Arunachal Pradesh.
“I have already acquired the land and got permissions, but the last environmental permission is pending. I am waiting for the coal committee meeting to take place,” said Patel, adding that the total project cost to be around Rs50 billion .
The company is also in the process of acquiring a coal mine in Indonesia with reserves of over 100 million tonnes to fuel the thermal power plant, he said.
“We are still interested in the Indonesian mine, as we require coal for blending. You will probably hear about it in the next four months.”
The 90 MW hydro project would require a total investment of Rs8 billion that would be financed through 75% debt and 25% equity, he said.
“We should achieve financial closure in the second quarter, because all the permissions are in.”
Acquisitions
Besides the coal mine, Patel Engineering is also in process of buying sewerage treatment and water treatment firms overseas.
“I look at technology primarily...Normally, I had taken over smaller companies in the past and grown them, as opposed to taking over a big company.”
He expects to fund the acquisitions via a combination of debt and internal accruals, but has no immediate plans to raise money from the market.
Patel Engineering shares closed down 0.34% at Rs467.35 in a weak Mumbai market.
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First Published: Mon, Jan 11 2010. 05 38 PM IST