Order Book 4x of Market Cap Over Rs 16,000 Crore: Small-Cap Stock Wins Fresh Irrigation Order, Trades at Half Industry PE

PE ratio of 10.5, is trading at almost half the industry's PE, which stands at 19.7

Volatility continues to grip the Indian markets, with the India VIX surging past 16. However, stock-specific movements remain active, and one Small-Cap stock in focus on Tuesday, February 18, 2025, is Patel Engineering Ltd.

The stock, currently trading below Rs 45 with a price-to-earnings (PE) ratio of 10.5, is trading at almost half the industry's PE, which stands at 19.7. It touched an intraday high of Rs 45.20 in early trading, following a key announcement by the company.

Patel Engineering, in a joint venture, has been declared the lowest (L1) bidder for an irrigation project worth Rs 1,090.45 crore from the Maharashtra Krishna Valley Development Corporation. The company's share in this contract amounts to Rs 218.09 crore.

The project involves the construction of a Pipeline Distribution Network for the Nira Deoghar Right Bank Main Canal, spanning from Km 87 to Km 135, including its distributaries and minor off-takes between Km 65 to Km 135. The work is expected to be completed within 36 months and will be executed in a joint venture, with Patel Engineering holding a 20 per cent stake.

The contract includes:

• Excavation and refilling for pipe trenches
• Construction of related structures
• Supply, jointing, lowering, and laying of pipes
• Installation of various valves, chambers, and outlets
• Pipeline testing along with valves and outlets
• Operations, repairs, and maintenance for five years post-completion

As per the latest update, Patel Engineering's order book stands at Rs 16,396.4 crore (Rs 1,63,964 million), with 63.6% of this comprising hydroelectric projects worth Rs 10,428.3 crore. Notably, the company’s total order book is 4 times its market capitalisation.

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