Patel Engineering acquires Michigan Engineers

12 September 2006

Mumbai: Patel Engineering Ltd (PEL) has acquired a controlling stake in Michigan Engineers Pvt Ltd (MEPL), a Mumbai-based urban infrastructure company, for an undisclosed sum.

"The government is planning to spend Rs63,000 crore over the next five years on urban infrastructure. The acquisition of MEPL provides the perfect platform to leverage joint skills and bid for urban infrastructure and sewerage projects", Rupen Patel, managing director of the company, said in a filing with the Bombay Stock Exchange (BSE).

"This investment is a win-win situation for both MEPL and PEL. With the acquisition of MEPL, Patel Engineering, a pioneer in microtunelling in India, will now be able to provide end-to-end solutions in sewer rehabilitation and urban infrastructure space. By complementing and augmenting MEPL's technology-led focus on urban infrastructure projects. Patel Engineering will now focus on the explosive growth in urban infrastructure both in metros and Tier II cities", he added.

Construction major Patel Engineering Ltd has a received a Rs37 crore contract to revamp Mumbai's sewer lines. Under the project, awarded by the Municipal Corporation of Greater Mumbai (MCGM), Patel Engineering will rehabilitate Mumbai's sewer lines using GRP liners and trenchless technology.

For the quarter ended December 2005-06, Patel Engineering reported a topline growth of 22.1 per cent year-on-year at Rs170 crore as against Rs140 crore in the corresponding quarter of the previous year. Total turnover increased by 16 per cent yoy to Rs230 crore against Rs200 crore in the corresponding quarter of the previous year.

Operating margins as percentage of sales improved by seven per cent on the back of a six per cent fall in construction expenses. The company's bottomline zoomed 110 per cent yoy to Rs25.1 crore.