Stock Watch - Punj Lloyd

Punj Lloyd Limited is a transnational company specializing in the infrastructure and energy sectors. Their operations spread across the Middle East, Africa, the Caspian, Asia Pacific and South Asia.

Positives
..Strong and diversified order book to lead to robust growth in revenues and profits between FY08-FY10.
..Completion of legacy orders to improve margins going forward
..Joint ventures in different segments to open up new opportunities

Key risks and concerns
..Slowdown in order inflow may impact future revenue growth
..Steep increase in commodity prices may dampen the margins
..Increase in interest rates from current levels may impact profitability negatively

At current price of Rs.150, the stock trades at 9 times FY09 earnings. Long term investors can accumulate on declines for good returns.