This might be due to inventory build up before festive season?

Invested in this stock, my tracking.

Patel Engineering – https://pateleng.com/

Q3/23 Earning call highlights. (Feb 23)

• Mr Rupen Patel has not participated.
• Orderbook @ 16K
• Land parcels are being sold to reduce debt.
• Right issue, 1:2 at Rs 11 premium on 6/2/23, another at 7:5 at 8 Rs premium in 2019.
• JVs and others loss making assets are being trimmed to improve financial health.
• Too many questions on finance cost, Debt, right issue, Management commitments etc

Q4/24 Earning call highlights (May 24)

• QIP of 400 Cr raised at Rs 56.53.
• Order book 18,600 Cr as on march end 24.
• 130 Cr recd as arbitration with Govt. @ 300 Cr still pending, will be recd in next 3-4 years.
• FY 25 R guidance -10-15%/FY 26 R guidance 20-25%
• Next 3-4 years, debt to be reduced to @700-800 Cr, current debt 2600-2700 Cr. 5-6 year back it was 5500 Cr.
• 10% Equity participation in new Indian start up working in TBM servicing.
• Debt to EBITA ratio current 3-3.5, to be reduced to 2.25 by FY 26.

08/07/24 – Patel Engineering crashes 12% after CMD Rupen Patel death, pares YTD gains. Patel Engineering stock price hit a record high of Rs 740 on January 4, 2008, and an all-time low of Rs 0.69 on October 13, 1995. Patel Engineering stock hit a 52-week high of Rs 79 on February 6, 2024, and a 52-week low of Rs 34.95 on July 10, 2023.

Q1/25 Earning call audio recording

Patel Engineering Ltd Q1 FY2024-25 Earnings Conference Call

• Order book 17700 CR, @ 4 time annual revenue
• FY 24 revenue 4544 Cr, FY 25 10%, FY 26 20% increase, margin 14-15%
• Death of main promoter Mr Rupen Patel on 7/7/24.
• Concall assurance of the continuation of legacy in bid, competency and business.
• 50000 Cr tenders being quoted, success ratio @20-22%, Available opportunity 1.5L Cr.
• Hydro, irrigation and tunneling main focus area.
• Lesser orders received in Q1 due to election.
• Reduced interest burden due reduced debt on account of money received from arbitration and QIP. QIP issued at 56.53, 10.03% discount of last closing price (400 Cr.)
• Future growth expected from pumped hydro storage
• Expected order inflow of 10-12K Cr in FY 25.
• Average broker price target 75 by FY 25 end.

30 Aug 2024, 11:12AM
Patel Engineering Shares Gain @ 6.5% to 57.30 After Tie-Up With RVNL For Hydro, Infra Projects.

Sep 20 2024 | 1:33 PM IST
Patel Engineering stock gains: Shares of Patel Engineering rose sharply on September 20, 2024. The share surged up to 4.89 per cent to hit an intraday high of 60.39 per share.
The rise in Patel Engineering share price came after the company said that it has bagged an order worth Rs 240.02 crore from NHPC.

17/10/24 – Ircon International signs a memorandum of understanding (MoU) with Patel Engineering (+@4%. To 56.50) to collaborate on identifying, pursuing, and executing infrastructure projects in India and overseas.

30/10/24
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. Price reacted to +4% to 51.50

Q2/25 Result 13/11/24 and earning call highlights
Wednesday, 13th November 2024, at 05:00 PM IST

Share holding pattern and changes in last 4 quarters.
Summary Jun 2024 Apr 25, 2024 Mar 2024 Dec 2023
Promoter 36.1% 36.1% 39.4% 39.4%
Pledged 88.67% 88.67% 88.67% 88.67%
Locked 0.0% 0.0% 0.0% 0.0%
FII 3.7% 8.5% 3.4% 2.8%
DII 6.2% 7.1% 4.5% 5.6%
Public 49.6% 43.9% 47.9% 47.4%
Others 4.4% 4.4% 4.8% 4.8%
Big investor – Vijay Kedia – 1.42%, Anil vishanji dedhia 1.48%

Major event specific to Patel Engineering to be tracked.

• L1 to order conversion
• Tracking by – ICICI direct, Hem Securities, Anand Rathi.

“October Sell-Off: Why FIIs Are Pulling Out of Indian Markets”

Unpacking the Factors Driving FIIs Away from Indian Markets.

October month was a turbulent month for Indian equities, experiencing significant volatility and rampant outflows across several key sectors. The above data shows pronounced decline in foreign investor sentiments as nearly all sectors experienced heavy investment withdrawals, reflecting heightened market uncertainty.

The above data shows sector wise net investments of FII’s from the month of July to October. Out of 24 sectors, ~60% of the sectors experienced outflows. In the second quarter of FY25 ie. from July to September, Indian equities saw a total inflows of 97,408 cr. Rupees , while in the alone month of October we experienced a massive outflow of 94,017 cr. Rupees.
This outflows show a period of market anxiety and if this sharp downturn trend continuous it could point to challenging economic environment ahead.
The most hit sectors in this period are:

1. Automobile and Auto Components :In the July month it gained a net investment of 6,148 Cr. and by the end of October it suffered a net outflow of 10,440 Cr. From a positive inflow to a major outflow indicating a significant investor retreat.
2. Capital Goods :In July it secured investments worth 4,927 Cr. and by October it suffered outflows worth 2,786 Cr. The investment swing is a -153% change , showing increasing volatility.
3. Chemicals :This sector was a good bet for the FPI’s as in the month of October it saw net inflows of 583 cr. as compared to net outflow of 512 cr. in the month of July.
4. Financial Services :This the most uncertain sector amongst all as it is the backbone of any economy and is very difficult to analyse. in the four month period the FII’s have withdrawn a staggering amount of 18,515cr. Alone in the month of October, the financial service sector have contributed 27.8% or one fourth of the total outflows of the net investments for the particular month, suffering the net decrease of 26,139 cr.
5. Healthcare :In the second half of October month only the healthcare sector experienced net inflow of >2000 cr. Overall this sector has gained a total of 17,469 cr. This shows that the FII’s are still bullish on this sector.
6. Oil, Gas & Consumable Fuels :This sector saw a stark contrast between early inflows and severe outflows in October. From 1,944 cr. in early July to -12,371 cr. in early October has affected all the companies in this sector severely. The main reason behind this can be contributed to the ongoing war between Israel and Iran which directly impacts the prices of the crude oil.

The reasons for the selloff in the month are given below

• US Presidential Elections Stirring Uncertainty.
  Global investors are keeping a close watch on the outcome, which could shake up economic policies worldwide. As the outcome was in favour of India not many economist believe it.
• China’s Stimulus TemptationOne of the big reasons for the FII exit is China stepping up with some pretty tempting stimulus measures. China wants to get global investors back, and with these new incentives, FIIs see potential for higher returns there.
• Premium Valuation of Indian MarketsHere’s where valuations come into play. The Indian market isn’t exactly cheap. The long-term median price-to-earnings (PE) ratio of the Indian market, since 2007, has been around 21.9. But before this recent market correction, the Nifty50 PE was over 24. In simple terms, the market was slightly overvalued compared to other emerging economies. FIIs are like seasoned bargain hunters, and when they spot better value elsewhere, they don’t hesitate to shift. With more attractive valuations popping up in global markets, India lost some of its appeal.
• Disappointing Q2 FY25 Earningsthe September quarter earnings were a real letdown. Indian companies posted net profit growth of only 3.6% in Q2 FY25, the slowest in 17 quarters. This sluggish growth came from weak revenue numbers and rising interest and depreciation costs. Even though expenses and other income crept up only a little, the market didn’t take this news lightly. There was panic amongst the retails investors.

Conclusion

The overall idea from analyzing the data is that market investments between July and October 2024 experienced significant fluctuations across different sectors, reflecting broader market volatility and changing investor sentiments due to various macro economic factors.
While things might be a bit shaky in the short run, India’s economy is actually pretty solid underneath all the drama. Don’t panic out and sell everything just because things get a little wild Just do your homework, spread your money around different investments and focus on sectors that seem to provide opportunity in the long run. Stay cool, stay smart, and keep your eyes on the bigger picture!