Patel Engineering (PATEN)

The present installed capacity is largely in the states’ sector (about
55%) and this is followed by the central sector (33%), and the
balance by the private sector. Going forward, most of the
investments would come from the private sector due to paucity of
funds by state and central governments, and the increased ability of
the private sector to mobilize funds for these projects.
Exhibit 5: Planned capacity additions (MW)
Thermal Hydro Total
Year Incr. add Cum. Add Incr. add Cum. Add Incr. add Cum. Add
FY08 13,000 114,000 2,000 40,000 15,000 154,000
FY09 18,000 132,000 2,000 42,000 20,000 174,000
FY10 7,000 139,000 4,000 46,000 11,000 185,000
FY11 4,000 143,000 7,000 53,000 11,000 196,000
FY12 3,000 146,000 4,000 57,000 7,000 203,000
Total 45,000 19,000 64,000
Source: ICICIdirect, Research
Additional power requirement in India will be nearly 70,000-75000
MW in the 12 th Five Year Plan (2012-17) under different economic
scenarios. Majority of the additional requirement will come from
hydro and thermal power, where Patel has significant presence.
Exhibit 6: Total capacity addition required in 12th Five Year Plan
GDP/Electricity
Installed Additional capacity
GDP growth
Elasticity Peak demand
capacity
required
8% 0.8 215700 280300 70800
8% 0.9 224600 291700 82200
9% 0.8 224600 291700 82200
9% 0.9 233300 303800 94300
10% 0.8 232300 302300 92800
10% 0.9 244000 317300 107500
Source: ICICIdirect, Research
Exhibit 7: Thermal power capacity expansion (MW)
70000
60000
50000
40000
30000
20000
10000
0
Source: ICICIdirect Research
8th Plan 9th Plan 10th Plan 11th Plan
4 | P age
The government’s initiatives
of “Power for All” and other
programmes would require
significant capacity additions
from private sector players
The demand supply mismatch is
going to continue going forward
and Patel could leverage its
experience to further strengthen its
market position.
This huge plan by the Central
government augurs well for Patel
Engineering, due to its track record
in the thermal sector and would
benefit from these government
initiatives