BRICS PCG, in its report on Punj Lloyd, recommends a 'Buy'. The report states that although the company's FY06 performance was subdued as expected, the worst is over.As against the projection of consolidated sales remaining flat at Rs 1800 crore, the company has reported sales of Rs 1680 crore, which were 5.9% lower than FY05. The lower turnover was caused by the delay in road work to the tune of Rs 1200 crore in Rajasthan and Assam due to the issue of right of way.However, the adjusted net profit at Rs 54 crore, surpassed expectations of Rs 40.80 crore. Going forward, the company is expected to perform strongly.The report expects 109.1% growth in sales for FY07 and 25.1% growth in FY08. These figures do not incorporate the newly acquired Singapore $ 1 billion company SembCorp Engineering & Construction.This acquisition will transform Punj Lloyd into one of the largest EPC companies in the world. The impact of the takeover will be clearly visible during the year as it will be in a position to diversify and enter new business areas.
