Shares of Patel Engineering Ltd rose 7% on Friday following the announcement of an agreement with Rail Vikas Nigam Ltd (RVNL) for hydro and infrastructure projects.

The construction engineering company, in partnership with the Navratna Central Public Sector Enterprise (CPSE) RVNL, has signed a Memorandum of Understanding (MoU) to jointly pursue hydro and infrastructure projects in India and abroad.

Patel Engineering stock opened higher at ₹54.76 a piece on the BSE, climbing to the day’s high of ₹57.39 per share.

The company informed the bourses that the MoU establishes a framework for collaboration, combining the strengths and capabilities of both entities in undertaking hydro and other infrastructure ventures. This agreement allows both companies to explore collaborative opportunities across various capacities.

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Key highlights of the MoU include the joint execution of projects, flexible collaboration models, and focused efforts to achieve synergies between both parties. Under this arrangement, RVNL and Patel Engineering can work together on selected hydro and infrastructure projects as opportunities arise.

The partnership aims to integrate Patel Engineering’s extensive infrastructure experience with RVNL’s expertise in rail and transport infrastructure. Additionally, through the MoU, both parties can jointly or independently participate in tenders and project bids.

As of 12 PM on August 30, Patel Engineering shares were trading 6.08% higher at ₹56.90 per piece on the BSE. RVNL shares also saw an increase, trading 3.62% higher at ₹600.30 on the BSE.

Despite today’s gains, Patel Engineering’s stock has underperformed this year, down over 5% on a year-to-date (YTD) basis. In contrast, RVNL shares have surged by an impressive 230% during the same period.

Patel Engineering reported a robust performance in the first quarter of FY25, with net profit growing 25.81% year-on-year to ₹48.17 crore, compared to ₹38.39 crore in Q1FY24. However, its revenue from operations slipped marginally to ₹1,101.66 crore in Q1FY25 from ₹1,118.61 crore a year ago.