Long Term Call: Patel Engineering Ltd

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Patel Engineering Ltd. CMP 414.70. Twelve moths TGT 517.
Patel Engineering Ltd. is an infrastructure company engaged in civil construction. The Company's projects include heavy construction, earth and rock excavations, housing complexes, building projects, dams, tunnels, bridges, refineries, factories, steel projects, thermal and hydro power house, pre-stressed and pre-cast concrete, marine works, and public health works.
At the Trailing market price of Rs 413, Patel discounts its FY 11E and FY 12E earnings by 14.8X and 12.3X respectively. The stock is trading at 7.7X its expected EV/EBITDA for FY 12E. We have valued Patel based on the SOTP valuation. We recommend Investors to “Buy” the stock at current levels and Buy again if it falls in the range between 380-390 for a Target price Rs 517 in Twelve months