Patel Engineering Targets 20% Revenue Growth For Next Five Years

Patel Engineering Ltd. is aiming for revenue growth of 15-20% over the next five financial years, on the back of elevated opportunities in the hydropower sector, according to Managing Director Kavita Shirvaikar.

The government has been ramping up expenditures on hydropower projects across the country. Last week, the government approved hydro projects worth Rs 4,136 crore in the northeast. 

“Looking at the opportunity in this sector, we are confident of maintaining our revenue growth of 15-20% in the next five years,” Shirvaikar told NDTV Profit.

Patel Engineering expects to add Rs 10,000 to Rs 15,000 crore to its current order book value of around Rs 18,000 crore in the next one year, she said.

The company has already identified opportunities and is actively participating in bidding for new projects. 

“We have identified around Rs 50,000 crore worth of projects that we are going to bid on in the near future,” Shirvaikar noted.

In April this year, the company raised Rs 400 crore via its qualified institutional placement at a floor price of Rs 59.50 per share. "This will meet our working capital requirements for the projects."

Patel Engineering recently signed a Memorandum of Understanding with state-run Rail Vikas Nigam Ltd. to jointly develop hydro and other infrastructure projects. 

As part of the deal, the companies will jointly bid for large hydro projects and other infrastructure projects.

“The revenue share will also vary from project to project,” she said.

Revenue growth may remain lower in fiscal 2025 due to the long cycle for hydropower projects, Shirvaikar said.

“In 60% of hydropower projects, we have a time cycle of four to five years. Considering the overall time cycle, in FY25 we expect a 10% revenue growth,” the MD said.

The company, however, is on track to maintain a margin of 14-15% this fiscal, she said.