Sadbhav Engineering extends gains on achieving financial closure of a major project

Sadbhav Engineering gained 2.3% to Rs 513 after the company said it had achieved financial closure of a major road construction project.

20,691 shares changed hands in the counter on BSE.

The stock had bounced back from lower level from early this month. From Rs 401.35 on 12 December, the stock surged almost 25% in a short while to Rs 501.45 by 28 December.

In early August 2006, Sadbhav had bagged a Rs 560-crore road construction project to improve and widen the Sardar Patel Ring Road around Ahmedabad from the city's urban development authority. It has now achieved financial closure of this project.

Within the construction sector, Sadbhav Engineering’s focus areas are irrigation, construction of roads, highways and mining, including excavation of overburden and mining of minerals. In November 2006, Sadbhav Engineering was awarded the projects worth Rs 216.34 crore by the Government of Andhra Pradesh Irrigation and CAD Department.

For Q2 September 2006, Sadbhav reported net profit of Rs 2.55 crore on revenue of Rs 50.54 crore. It had net profit of Rs 5.12 crore on revenue of Rs 94.57 crore in Q1 June 2006.

Recently, Sadbhav’s board had proposed raising up to Rs 100 crore through placement with qualified institutional buyers. Assuming that the institutional placement is made at the current market price, it would result in about 17% equity dilution. The company’s current equity base is Rs 10.90 crore. Face value per share is Rs 10.