Vijay Kedia sold 1,20,00,000 shares of this penny stock under Rs 55 with Rs 1,79,019 million order book: Company Sold Remaining Equity Stake of Welspun Michigan Engineers Ltd

At the closing bell, shares of the company were trading at Rs 50.87 per share, up 3.73 per cent.

On Wednesday, shares of Patel Engineering Ltd gained 4.60 per cent to an intraday high of Rs 51.30 per share from its previous closing of Rs 49.04. The stock’s 52-week high is Rs 79 while its 52-week low of Rs 46.10. At the closing bell, shares of the company were trading at Rs 50.87 per share, up 3.73 per cent.

Patel Engineering Limited has announced its decision to divest its remaining 9.99 per cent stake in Welspun Michigan Engineers Limited. This strategic move aligns with the company's objective to optimize its investment portfolio and focus on core business activities. The sale is expected to be completed on November 7, 2024, and is anticipated to fetch a consideration of Rs 100 crore. The buyer, Welspun Enterprises Limited, is an unrelated entity, ensuring a transparent and arms-length transaction. While the divested unit had a negligible contribution to the company's consolidated turnover and income, it represented 0.54% of the consolidated net worth as of March 31, 2024.

Additionally, Patel Engineering Limited has been actively forging strategic partnerships to expand its reach and capabilities in the infrastructure sector. The company entered into a Memorandum of Understanding (MoU) with Rail Vikas Nigam Limited (RVNL) to collaborate on hydro and other infrastructure projects both domestically and internationally. By combining Patel Engineering's infrastructure expertise with RVNL's experience in rail and transport, the partnership aims to leverage synergies and capitalize on growth opportunities in the burgeoning infrastructure market. Additionally, Patel Engineering has signed another MoU with Ircon International Limited to explore and jointly execute mutually beneficial infrastructure projects in India and overseas, further solidifying its position as a key player in the global infrastructure landscape.

About the Company

Patel Engineering Ltd is engaged in the construction of dams, bridges, tunnels, roads, piling works, industrial structures and other kinds of heavy civil engineering works in areas like hydro, irrigation & water supply, urban infrastructure and transport. The company has a market cap of Rs 4,295 crore.

According to Quarterly Results, the company reported net sales of Rs 1,101.7 crore in Q1FY25 compared to net sales of Rs 1,118.61 crore in Q1FY24. The net profit increased by 26.1 per cent to Rs 54.72 crore in Q1FY25 compared to a net profit of Rs 43.40 crore in Q1FY25. In its annual results, the net sales increased by 16.8 per cent to Rs 44,544.1 crore and net profit increased by 110 per cent to Rs 301.6 crore in FY24 over FY23.

Order book: As of June 30, 2024, the company’s order book stands at Rs 1,79,019 million (Including L1 Orders). Segment-wise order book includes hydroelectric (61.53 per cent), irrigation (21.99 per cent), tunnel (10.54 per cent, road (2.45 per cent) and other (3.49 per cent). 

An ace investor, Vijay Kedia sold 1,20,00,000 shares or 1.42 per cent stake in the company in September 2024. As of September 2024, 88.7 per cent of promoters’ stake is pledged. Investors should keep an eye on this penny stock.

Disclaimer: The article is for informational purposes only and not investment advice.