Buy Patel Engineering with an investment horizon 18-24 months: Deven Choksey, KR Choksey Securities

Deven Choksey, MD, KR Choksey Securities, in a chat with ET Now talks about Patel Engineering.

Can you walk us through the target that you have for Patel Engineering?

It is important to know that the companies which are into the project execution segment or infrastructure play, they may not have consistency in form of results coming on a quarter to quarter basis. So those investors, who are looking at such companies, must know this fact little bit more in detail.

Having said that, the larger amount of visibility is seen in this company’s case because of higher amount of order books that they have and next two to three years are going to be robust years for this company, particularly more because in the hydropower segment where the Government of India is expanding the capacity to 30000 megawatts from 13000. That could possibly result into higher amount of order book inflow from companies like Patel Engineering which has got a larger amount of specialisation in this particular space.

Along with that, you have the transportation segment wherein also a good amount of order inflows are expected to take place because of the rollout of road projects. So from both these sectors, this particular company is definitely positioned well. At the same time in the real estate sector, where they have about 1100 acres of land which is already in place, without much of a spending they will be probably expanding this into a larger amount of revenue book and the profits in coming two-three years. So that is again giving a good visibility.

Stock is not very expensive, that is comfort level and that is where one can probably buy into this company for an investment horizon of at least one and a half to two years now.