Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Punj Lloyd: A brief overview - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jul 6, 2007

    Punj Lloyd: A brief overview

    Punj Lloyd Ltd. (PLL) is one of the largest engineering construction companies in India providing integrated design, engineering, procurement, construction (EPC) and project management services for energy industry and infrastructure projects. To augment its engineering and project management skills and transform itself into a complete EPC player, the company recently acquired Singapore based SembCorp and its UK based subsidiary Simon Carves. SembCorp has significant E&C capabilities ranging from master planning to detailed engineering design to project and construction management across a wide variety of segments including speciality buildings, industrial parks, airports, jetties, mass rapid transport systems and tunneling. Simon-Carves has significant EPC capabilities in petrochemical and refinery plants.

    Business segments
    PLL has four main business divisions. Here is a brief description of the same.

    Pipelines: Pipelines are the largest segment for PLL, accounting for about half of the companyís annual revenues. The company has extensive execution experience in pipeline construction, having laid around 7,730 km of cross-country pipelines in various regions across the world. It is one of the few companies in the world with expertise in laying large-diameter gas pipelines and operational experience in shallow water and swampy terrain. Given the capital intensity of the business, the company has increased focus on larger length and larger diameter pipelines. Margins in this segment are significantly higher on account of the lower competition and the companyís extensive experience in executing such projects.

    Storage tanks and terminals: In addition to strong capabilities in pipeline laying, the company has significant expertise in construction of storage & terminals. PLLís experience in tankage and terminals extends from the construction of cryogenic to floating and fixed roof storage tanks for oil, gas, and water, and EPC capabilities, including insulation in LNG Tanks. This enables it to offer a complete oil & gas transportation solution to clients. PLL has built more than 6 million cubic metres of storage capacity in its tankage and terminal construction business.

    Infrastructure and civil works: PLL provides engineering and construction services for various infrastructure projects including highways, flyovers, bridges and elevated roadways. Highway projects in the state of Assam and Rajasthan accounted for bulk of the infrastructure order book. In addition to rich execution experience in NHAI road projects, it has also executed projects for the Delhi metro system.

    Process plants and power projects: PLL has experience in executing contracts in a wide variety of applications including gas compressor and process facilities, specialised process facilities for refineries like sulphur recovery, crude distillation, hydrocrackers and vacuum distillation units. The company can undertake the entire gamut of activities like fabrication of steel structures, erection of heavy equipment, piping, instrumentation, insulation and fire proofing services.

    PLL is engaged in engineering and construction services for power plants. The company has also executed gas turbine based power plants and piping works for nuclear power plants. The power business is project specific and the value of each project is around Rs 18 bn to Rs 20 bn.

    Geographical presence
    PLL earns around 60% of its revenues form offshore operations and has significant presence in the Middle East, the Caspian region, Asia Pacific region and in South Asia. Going forward, the company intends to strengthen its foothold in strategically important locations like Africa. These regions have significant oil and gas reserves and enormous potential for large engineering construction projects in the energy and infrastructure sector.

    Order book position
    The consolidated order book position of PLL as on 31st March 2007 was around Rs 180 bn. Punj Lloyd has enjoyed huge order follows in the FY07 on account of buoyancy in segments like pipelines and terminals. These sectors have contributed about a half of order inflows during FY07. Expansion into newer geographies like Africa has helped the order intake momentum. Entry into upstream oil & gas through acquisition of SembCorp, which has significant expertise and pre-qualification, has broken L&Tís virtual monopoly in the domestic market. The company has increased the average order size from US$ 30 m in FY06 to US$ 100 m in FY07. This has also helped company to address the people problem.

    (Rs m) South-East Asia Middle East & Africa Rest of the world Total
    Petrochemicals 10,263 7,379 4,502 22,144
    Oil and gas 51,188 41,265 16,980 109,433
    Civil infrastructure and power 41,760 7,381 - 49,141
    Total 103,211 56,025 21,482 180,718

    * The order backlog is unexecuted value of orders as on 1st January 2007 and the value of orders received thereafter.

    We shall analyse the companyís financial history in the second part of this article.



    Equitymaster requests your view! Post a comment on "Punj Lloyd: A brief overview". Click here!


    More Views on News

    Sorry! There are no related views on news for this company/sector.

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 23, 2017 (Close)