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Patel Engineering Ltd
NSE: PATELENG BSE: 531120 INE244B01030 Industrials Infra 🔎 Screen
₹2,615 Cr
Market Cap
9.6
P/E
0.70
PEG
13.5%
ROCE
9.7%
ROE
0.27
D/E
13.3%
OPM
+36.0%
% from 52W High
26
α RS
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📈 Price History
Ratio Health
Excellent
Good
Average
Poor
By Category
Shareholding
About

Patel Engineering Ltd is engaged in the construction of dams, bridges, tunnels, roads, piling works, industrial structures and other kinds of heavy civil engineering works in areas like hydro, irrigation & water supply, urban infrastructure and transport.

✓ Strengths 4
  • Company has reduced debt.
  • Stock is trading at 0.62 times its book value
  • Company has delivered good profit growth of 49.0% CAGR over last 5 years
  • Company's working capital requirements have reduced from 111 days to 81.8 days
! Concerns 8
  • Though the company is reporting repeated profits, it is not paying out dividend
  • Promoter holding is low: 31.5%
  • Tax rate seems low
  • Company has a low return on equity of 9.30% over last 3 years.
  • Contingent liabilities of Rs.2,681 Cr.
  • Promoters have pledged 86.6% of their holding.
  • Company's cost of borrowing seems high
  • Promoter holding has decreased over last 3 years: -7.94%
Key Ratios Snapshot
📊 Sector Averages
📈 Growth Pattern
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3-Statement Financial Model
Bear / Base / Bull projections · DCF fair value · Reverse-DCF
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Strong quarter with PAT up 118% YoY to ₹71.5 Cr, driven by margin expansion and debt reduction, though flattish revenue growth and exceptionals temper the beat. quarter Investor Presentation One-Pager? Mar 2026
Revenue
₹1,421 Cr
Consolidated Q4; FY26 full year ₹5,102 Cr (+0.2% YoY)
EBITDA Margin
15.14%
Q4 FY26; up from 13.41% full year FY25
PAT
₹71.5 Cr
+118% YoY vs ₹32.8 Cr in Q4 FY25; includes exceptionals of ₹86 Cr impairment/provisions
Order Book
₹15,119 Cr
As of Mar 31, 2026; 63% hydropower, 10% urban infra
What Went Right
  • Debt reduced by ₹458 Cr to ₹1,187 Cr, debt-to-equity improved to 0.27 from 0.43
  • Record tunnelling progress of 812 meters/month at CIDCO project, achieving 6.2 km breakthrough
  • New orders of ₹4,400 Cr in FY26, including ₹1,300 Cr Kondhane Dam and ₹900 Cr Renuka Ji Dam
  • FY26 PAT up 21% YoY to ₹294 Cr, despite exceptional provisions
  • Non-core asset monetization realized ₹185 Cr (land ₹135 Cr, arbitration ₹50 Cr)
What to Watch
  • Revenue growth minimal: FY26 revenue ₹5,102 Cr vs ₹5,093 Cr (+0.2%), missing earlier expectation of meaningful uptick
  • Exceptional items of ₹86 Cr: impairment of hydro subsidiaries (₹56 Cr) and provision on toll road stake sale (₹30 Cr)
  • Promoter stake diluted to 31.48% from 39% due to non-participation in rights issue; pledge reduction guidance remains vague
  • Lost the large Dibang hydro project (₹16,000 Cr) to a new entrant on aggressive pricing
  • Interest cost remains elevated at 11-12% effective rate, with ₹70 Cr annually spent on non-fund-based limits
Management Guidance
  • FY27 revenue growth of 10%
  • FY27 order inflows of ~₹8,000 Cr
  • Non-core asset monetization target of ₹150-200 Cr in FY27
  • Promoter pledge reduction target of 15-20% (timeline unspecified, to be updated post next quarter)
Investor Lens
The investment thesis remains intact given a strong order book (₹15,119 Cr) and a massive opportunity pipeline (₹20,000 Cr immediate, ₹40,000 Cr next year) in hydro, tunnelling, and water infrastructure. However, execution concern persists – FY26 revenue was essentially flat, and the company relies on asset sales and arbitration awards for cash flow. The impairment charges on hydro subsidiaries and the weak bid conversion on large projects are red flags. Key to watch: conversion of the L1 order (₹1,600 Cr in Nepal), improvement in revenue growth to 10% in FY27, and concrete steps on promoter pledge reduction. Debt reduction is positive but a large portion came from rights issue rather than operations.
From investor presentation · AI-generated analysis · Not investment advice
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📊 MIXED Revenue dips 11.8% YoY but margins improve; PAT up 15.8% YoY
Revenue
Revenue for Q4 Mar 2026 stood at ₹1,421 Cr, down 11.8% YoY but up 14.7% QoQ. The YoY decline reflects weak demand, while sequential recovery may indicate seasonal pickup.
Profitability
Net profit rose 15.8% YoY to ₹44 Cr, aided by margin expansion and a lower base. EPS improved to ₹0.42 from ₹0.36. However, PAT fell 38.9% QoQ due to high tax and negative other income.
Margins
Operating profit margin improved to 15% from 14% YoY, driven by cost control. Sequentially, OPM rose from 12% in Dec 2025, highlighting operating efficiency gains.
Cash Flow
Cash flow data not provided in the report.
Balance Sheet
Borrowings stood at ₹1,560 Cr with a debt-to-equity ratio of 0.4, indicating moderate leverage. Reserves of ₹3,849 Cr provide a strong equity base against total assets of ₹9,620 Cr.
Key Risks
High effective tax rate of 44% suppresses net profit. Other income turned negative at ₹53 Cr, potentially from one-off losses. Revenue decline YoY signals execution or order book challenges.
Outlook
The QoQ revenue recovery and margin improvement are positive. However, sustaining growth and managing tax and other income volatility will be key for future performance.
Generated by AI · Mar 2026 results · Not investment advice
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Revenue by Segment

Segment Q3FY26 Q4FY26 Trend
Civil Construction
1,238
EBIT 56
1,421
EBIT 162
others
0
EBIT -1
0
EBIT 1
Real estate
1
EBIT 3
1
EBIT -7
Total 1,239 1,421

Source: NSE Integrated Filing XBRL (Reg. 33 Ind AS). Values in ₹ Crore.

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Investment Risk:
Investing in securities, including equities and mutual funds, involves inherent risks, including the potential loss of principal. All investments are subject to market fluctuations, regulatory changes, and other risks that may affect their value. Past performance is not indicative of future results. This report is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This report does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a SEBI-registered investment adviser or other qualified financial professional before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

Conflict of Interest Disclosure:
The author and/or analyst may currently hold or have previously held positions in the securities or financial instruments discussed in this report. Any such positions, if material, are disclosed to the best of the author's knowledge and are not intended to influence the objectivity or independence of the analysis. This research is produced independently and is not sponsored, endorsed, or commissioned by any company, institution, or third party.

Information Sources:
The analysis and opinions expressed herein are based on publicly available information, including but not limited to company filings with the BSE/NSE, annual reports, management commentary, investor presentations, data from the Reserve Bank of India (RBI), SEBI, industry publications, and other reliable financial data sources. Information is believed to be accurate as of the date of publication but may be subject to change without notice. Readers are encouraged to independently verify all information before acting upon it.

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