Patel Engineering in Rs447 crore roads, sewerage projects

Mumbai: Construction major Patel Engineering Ltd has received two orders worth a total of Rs447 crore (Rs4.47 billion), involving road and sewerage projects in Karnataka and Mumbai, respectively, managing director Rupen Patel said in a statement issued to the BSE.

Patel Engineering and KNR Constructions will jointly build roads in Karnataka under a Rs410 crore (Rs4.1 billion) contract and revamp Mumbai's sewer lines in another Rs37 crore (Rs371 million) contract, the company's statement said.

The Karnataka project, awarded by the National Highways Authority of India, is for the design, construction, development, finance, operation and maintenance of NH-7 section in the Andhra Pradesh-Karnataka border on a BOT basis. The work on the project is expected to commence from December 2006.

Under the sewerage project, awarded by the Municipal Corporation of Greater Mumbai (MCGM), Patel Engineering will rehabilitate Mumbai's sewer lines using GRP liners and trenchless technology, the release added.

Patel Engineering expects the road project to generate total revenue of Rs1,186 crore (Rs11.86 billion).

"Patel Engineering is moving towards annuity-based projects in road construction and looking at opportunities in hydropower sector," Patel said in the statement.

For the quarter ended December 2005-06, Patel Engineering reported a topline growth of 22.1 per cent year-on-year at Rs170 crore (Rs1.7 billion) as against Rs140 crore (Rs1.4 billion) in the corresponding quarter of the previous year. Total turnover increased by 16 per cent yoy to Rs230 crore (Rs2.3 billion) against Rs200 crore (Rs2 billion) 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 (Rs251 million) from Rs11.9 crore (Rs119 million) in the corresponding previous quarter due to expansion of the operating margins. The company expects its margins to stand at 18-20 per cent for the full year.