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Patel Engineering Ltd.

BSE: 531120 Sector: Infrastructure
NSE: PATELENG ISIN Code: INE244B01030
BSE 00:00 | 24 Jun 23.00 0.20
(0.88%)
OPEN

23.50

HIGH

23.50

LOW

22.20

NSE 00:00 | 24 Jun 22.90 0.10
(0.44%)
OPEN

23.30

HIGH

23.50

LOW

22.10

OPEN 23.50
PREVIOUS CLOSE 22.80
VOLUME 130254
52-Week high 34.95
52-Week low 13.82
P/E 13.61
Mkt Cap.(Rs cr) 1,102
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 23.50
CLOSE 22.80
VOLUME 130254
52-Week high 34.95
52-Week low 13.82
P/E 13.61
Mkt Cap.(Rs cr) 1,102
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Patel Engineering Ltd. (PATELENG) - Chairman Speech

Company chairman speech

Dear Shareholders

Once again the nation and the entire world has been impacted by the second wave of theCoronavirus disease with very severe consequences causing a large number of deaths in ourcountry. Studies have identified different strains of the virus including double mutantand triple mutant strains which threatened to play havoc on the country's healthcaresector. New disease like the black fungus caught us all unaware. The COVID-19 pandemic hasimpacted everyone on an individual and at a corporate level.

It has been more than a year now since the entire world has been battling with thedreaded virus and it has surely made us realize the power of Mother Nature. At this pointin time it is very essential that we all take utmost precaution and take all necessarysafety measures to keep ourselves and our loved ones strong and healthy both mentally andphysically. We at Patel Engineering have strived hard to take care of all ouremployees/their families and have rolled out vaccination drives for all people associatedwith the Company including their families and the extended contract workers at our sites.

At a Corporate Social Responsibility front the Company has contributed in variousactivities pertaining to local area development works at our sites viz water supply roadmaintenance etc on continuous basis. Additionally we have provided certain facilities andreliefs to the locals by supplying transportation during covid times medicines maskssanitising materials and beds for quarantine etc. The last one and a half years has hadits share of ups and downs. Intermittent lockdowns and restrictions which were enforcedhad an impact on the economy at large. However the Government of India has been focusingon the infrastructure sector in order to ensure world class infrastructure in our country.In FY 21 infrastructure activities accounted for a 13% share of the total FDI inflows ofUS$ 81.72 billion. In the union budget of 2021 the Government has allocated 34.5% more(BE to BE) than last year for infrastructure development and given equal emphasis to allphysical infrastructure including roads and highways railways urban infrastructurepower port shipping airways petroleum and natural gas.

The Budget 2021 has given much-needed impetus to infrastructure development reducingtrade and transaction costs and improve factor productivity. Moreover the focus on roadsand railways will create a uni_ed market in India for the seamless movement of goods andhuman resources. The National Infrastructure Pipeline (NIP) for FY 2019-25 is afirst-of-its-kind by the government to provide world-class infrastructure to citizens andimprove its quality of life. It also aims to improve project preparation and attractfurther investments into infrastructure. Furthermore the Bill for setting up of aNational Bank for Infrastructure Financing & Development (NaBFID) is now passed by theLok Sabha. It envisages setting up a new government-owned Development FinancialInstitution (DFI) to facilitate the flow of long-term funds for infrastructure projects.The objective also includes the issuance of guarantees and facilitating the development ofa bond and derivative market. Proposed tax breaks will enable increasing thecost-effective resource-raising.

Infrastructure projects are predominantly financed by banks. The Short term resource(liability) base of banks vis--vis long gestation period of projects (assets) makes anasset liability mismatch endemic in such bank finance. An institution to provide fundswith a commensurate tenor of assets and liabilities is expected to present a viablealternative for funding infrastructure. The success of NaBFID in improving bond/debtmarket vibrancy will well be an important and a positive step in the continuation ofIndia's endeavor in developing a robust financial structure for the infrastructure sector.

As only fundamentally strong companies in private sector currently remain viable afterthe revenue loss due to Covid in the previous year we are bullish about an uptick in theprivate investments in the sector in the medium term. India's GDP at the backdrop ofbetter infrastructure in future should also see significant improvement in the comingyears which is expected to give a big push to investments in this sector. We couldhopefully see a big revival due to reforms in the infrastructure space in India when bothpublic and private investments gain momentum in tandem.

We are confident that our Company is poised to capitalise on such momentum and look ata steady growth going forward. Even during these Covid times the Company has continued toreceive fresh orders of approx. Rs 2900 crore in FY 21 and Company's order book as ofMarch 31 2021 stands at Rs 14466.83 crore. The new orders shall give a good boost to theoverall growth of the Company improving its profitability which has been sluggish in therecent past due to the impact of the COVID-19 Pandemic.

The lenders have also shown faith in our growth story and supported us throughout theCovid period. I am happy to inform you that we are one of the few companies that has beenable to surpass the test of the robust norms of the Kamath Committee formed by RBI toundertake a one-time resolution plan to overcome the impact of Covid and has beensupported by lenders with the availability of adequate working capital limits required foroperations of the Company and obtain fresh orders. To enhance shareholder value the focusof the Company still remains to keep monetizing its non-core assets receive arbitrationawards/claims and dispose of real estate wherever possible to reduce its debt improveliquidity and profitability of the Company.

The performance of FY 21 was bound to be low as the Company was hit by the COVID-19Pandemic. But we expect to come back strongly in FY 22 and years proceeding. On aconsolidated basis revenue from operations declined by 24% to Rs 1994.79 crore in FY 21from Rs 2617.21 crore in FY 20. Consequently the Company has incurred a net loss of Rs298.22 crore in FY 21 in contrast to a net profit of Rs 4.43 crore in FY 20.

On a standalone basis the revenue from operations was lower by 26% to Rs 1719.12crore in FY 21 compared to Rs 2333.06 crore in FY 20. Hence the Company incurred a netloss of Rs 142.15 crore in FY 21 as against a net profit of Rs 34.50 crore in FY 20.

With the vaccination drives undertaken by the government the impact of COVID-19 isexpected to phase out slowly and hence the economy is expected to revive in FY 22. Thankyou shareholders for your much-needed support and co-operation.

Yours truly

Rupen Patel

Chairman & Managing Director

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