⚡ At a Glance
Patil Automation, born in 2015, builds robotic welding, assembly, and automation systems for auto OEMs. With 99% revenue from the auto sector and a fat expansion plan underway, it hopes to ride the EV boom. But with a tight balance sheet, rising working capital needs, and 22x P/E — is it precision-engineered for returns?
1. 🛠️ What Does Patil Actually Do?
No, they don’t make robots that serve chai.
Patil Automation is an industrial automation solutions provider, building robotic lines and welding systems for auto companies. Think Maruti, Tata, M&M, or even Tier-1 ancillaries who need:
- 🚗 Spot/MIG/TIG Welding systems
- 🦾 Robotic work cells & fixtures
- 🏗️ Conveyor-integrated assembly lines
- ⚙️ Special-purpose pressing/welding machines
Basically, they’re the ones making machines that make machines. And that’s not an exaggeration.
2. 🧩 Product Mix – Welding Is the Hero
🔧 H1FY25 Revenue Breakdown:
| Segment | % Share |
|---|---|
| Welding Lines | 70.23% |
| Assembly Lines | 22.37% |
| Maintenance/Services | 4.37% |
| Special Purpose Machinery (SPM) | 1.08% |
| Material Handling Machines | 0.86% |
| Misc. (scrap/spares) | 1.10% |
They’re not trying to be everything. They’re very clearly the go-to automation partner for car factories. But that’s also where the risk lies…
3. 🚘 Customer Concentration – 99% Auto
🏭 Industry-Wise Revenue (H1FY25):
| Sector | % Share |
|---|---|
| Automotive | 99.10% |
| Non-Automotive | 0.86% |
| Scrap | 0.04% |
So basically, if auto OEMs even cough, Patil might get pneumonia. But that hasn’t stopped them from riding the tailpipe of growth so far.
4. 🌍 Where Do They Operate?
🗺️ State-Wise Revenue Split:
| State | % Share |
|---|---|
| Maharashtra | 54.2% |
| Haryana | 19.8% |
| Karnataka | 16.4% |
| Tamil Nadu | 4.5% |
| Others | <2% |
Heavily Maharashtra-centric, but decent OEM spread.
5. 🏭 Facility & Capacity – Running Hot
| Unit | Area (sq. ft.) |
|---|---|
| Unit I | 50,536 |
| Unit II | 58,464 |
| Total | 1.09 lakh |
| Capacity | 2,304 units/year |
| Utilization | 83.5% (H1FY25) |
⚙️ Expansion in progress — 59,046 sq. ft. added across 3 new units to take total capacity to 3,454 units/year.
💰 Cost = ₹67.09 Cr
💡 Funded by IPO money
6. 📈 Financials – Are the Robots Profitable?
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 63 | 94 | 78 | 115 | 118 |
| Net Profit (₹ Cr) | 1 | 5 | 4 | 8 | 12 |
| Operating Margin | 5% | 9% | 7% | 11% | 13% |
| ROCE | – | 29% | 17% | 25% | 30% |
| ROE | – | 29% | 17% | 25% | 36% |
| Cash from Ops (₹ Cr) | – | -1 | 0 | 7 | 1 |
🧯 Margin improvement is real — OPM rose from 5% → 13% in 4 years.
🧠 Net Profit CAGR: 50% (FY22–FY25) — but base is still small.
⚠️ Cash Flow from Ops in FY25 was just ₹1 Cr. Because…
7. ⚠️ What’s the Catch?
🚩 Rising Working Capital:
- Debtor Days → 57 (decent)
- Inventory Days → 123 (⚠️)
- Payable Days → 45 (low)
- Cash Conversion Cycle = 135 days → up from 33 days in FY23
They’re making good machines, yes. But they’re also sitting on inventory for months while waiting for customer payments.
💣 Other Risks:
- 99% exposure to auto cycles — not EV proof
- IPO being used mostly for capex → less for liquidity
- P/E of 22.4x on trailing earnings — not cheap for a low-scale player
8. 📦 IPO Details
| Field | Value |
|---|---|
| IPO Size | ₹69.6 Cr |
| Market Cap | ₹262 Cr |
| Listing Date | June 23, 2025 |
| Valuation | 22.4x P/E |
| Use of Funds | Capex, Loan Repayment, GCP |
No shady pre-IPO placements. No promoter pledges. Fairly clean structure.
🧠 EduVerdict: Tesla Dreams or Toolroom Reality?
✅ What Works:
- 🎯 Clear industry focus: welding + automation for auto
- 🔩 Robotic workcell expertise = high-margin niche
- 🧠 High ROCE/ROE + improving margins
- 🛠️ Real demand, with OEM clients
❌ What Sucks:
- 🫠 Fully auto-dependent, no sector hedge
- 💸 Inventory bloat + weak cash conversion
- 🧱 Scale is still modest — expansion is capital intensive
- 💰 IPO valuation slightly stretched
TL;DR for Lazy Investors:
- 🤖 Makes robotic welding + assembly lines for auto factories
- 🧾 70% revenue from welding, 99% from automotive
- 📈 Solid ROE (36%) & margin gains, but cash flow weak
- 🧱 Capex underway, funded by IPO
- ⚠️ Valuation is rich for its scale, but potential is real
Final EduVerdict: Well-Built, But Needs More Torque
Patil Automation isn’t hype. It’s a real business doing real work with real robots. The problem? It’s still not scalable enough to justify its 22x P/E.
We like the growth narrative. We respect the margins. But unless the EV boom directly lifts automation capex, post-listing upside may remain… welded in place.
✍️ Written by Prashant | 📅 June 15, 2025
Tags: Patil Automation IPO, Robotic Welding India, SME Listings 2025, Auto Ancillary Automation, Pune Engineering IPO, EduInvesting SME Series
