Monday, April 22, 2013

Punj Lloyd Ltd: Breaks Out
The Punj Lloyd Group is a diversified international conglomerate offering engineering, procurement, and construction (EPC) services in energy and infrastructure along with engineering and manufacturing capabilities in the defence sector.
The company recently,  received an offshore project worth Rs.314 crore in Al-Khafji, Saudi Arabia from Al Khafji Joint Operations (KJO). Punj Lloyd said that the project is scheduled for commissioning in September 2014. KJO is a joint operation of two national companies -- Aramco Gulf Operations Company (AGOC) and Kuwaiti Gulf Oil Company (KGOC), for oil and gas exploration development and production in the offshore area of the partitioned neutral zone between Saudi Arabia and Kuwait.
The scope of work for the project entails detail design, engineering, procurement, testing, transportation and construction/installation of a new 20 inch OD crude transmission line, 40 km submarine rigid pipeline, mechanical completion, pre-commissioning, commissioning/start up, and performance testing, Punj Lloyd said. The scope of work also includes modification work at Ratawi Gathering Station, scraper launcher, tie-ins with existing facilities including utilities, valves and piping, riser and riser clamps, deck extension for installation of new facilities and onshore section at Al-Khafji from landfall to scraper receiver, scraper receiver, tie-ins with existing facilities including utilities, valves and piping. The purpose of this project is to install a new crude transmission line as replacement for the existing transmission line, Punj added. 
Punj Lloyd  certainly looks very interesting at the current marketcap of about Rs. 1766.75 Cr and Book Value of Rs.114.62. It is turning around and this time the turnaround is going to be for real. In the first nine months, it has shown a reasonably good performance on the topline though the bottomline has been a little disappointing. Very recently, Goldman Sachs Investments (Mauritius) 1 Ltd bought 4,000,000 shares at Rs 55.89. Also, based on its 9MFY2013 performance, Angel Broking has placed a revised EPS estimates for  FY2014 as Rs.3. Their FY13 EPS estimates were Re.0.4. Punj Llyod has been looking to reduce its debt through sale of its non-core assets and replacing Indian debt with foreign debt.The scrip today broke of its current range should now be moving towards Rs.62-64 in the coming days. CMP: Rs.53.20.