It has been a massacre of sorts for the stock of Punj Lloyd in the last three years. The free-fall of over 80 per cent from Rs 280 to Rs 54, from August 2008 till date, was driven by reasons other than just the global downturn. Highly-valued buyouts in Singapore and UK in 2006 were the trigger for the company's problems.

While the acquisition helped the company move up the value chain in terms of bidding for larger projects, legacy issues faced by the overseas units pulled down Punj Lloyd's earnings. Cost overruns in many of the foreign subsidiary's projects and consequent litigation with clients resulted in the company having to resort to massive write-offs from profits. Profits on a consolidated basis, therefore, fell steeply for several quarters beginning 2008, with intermittent losses.

The latest ended quarter, though has shown improvement in operational performance, with consolidated revenues jumping 40 per cent over a year ago. The company also hopes to be done with the nagging legacy issues as it has withdrawn financial support to one of its bleeding step-down subsidiary and commenced winding-up proceedings. This said, little signs of improvement in its arbitration proceedings in some projects, slow progress of its Libya orders and mounting working capital needs remain sore areas.

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