Patel engineering remains focused on high margin orders

At a time when Capital Goods players are scrambling for orders, Patel engineering has said that it remains very selective in picking projects in line with its strategy to focus on high-margin business. Patel Engineering is one of the major construction players in the country with strong focus in hydel and irrigation projects.

Despite cherry picking orders, the company has an order book in excess of Rs 7,100 crore as end of Dec 2008. Of this, hydro sector accounted for 42%, irrigation 42% and transport 16%. Typically, hydro and irrigation projects command higher margins than transportation contracts. The company indicated that it is only bidding for orders that confirm to its internal target margin of about 15-16% for irrigation projects and 22% for hydel projects.  In addition to the above robust order book, the company has also been pre-qualified for projects worth over Rs 11,000 crore.

On March 24, 2009 the company has announced that it has bagged an irrigation order worth Rs 799 crore from Narmada Valley Development Authority (NVDA) for Bargi Diversion Project. The project will be executed totally by the company even though the order was bagged in consortium/ JV with SEW Constructions.   The scope of this contract involves execution of the Sleemanabad Carrier Canal (Bargi Right Bank Canal) of Bargi Diversion Project from RD 104 Km to RD 129 Km on turnkey basis comprising the work of survey, planning, geo-technical investigations, design, estimation, preparation of permanent land acquisition cases, construction of lined tunnel (about 12 Km in length and 10 m diameter) with cut and cover RCC transitions (about (900 m length), Construction of canals (about 13 km in length) by excavation, cement concrete lining, all in-line structures, commissioning & testing of the canal system .crackcrack