1. At a Glance
Patel Engineering is like that overachieving civil engineer who can build dams, bridges, tunnels — and also build your anxiety levels if you look at the contingent liabilities. With a ₹16,285 Cr order book, 177% profit CAGR over 5 years, and a P/E of just 8.6, the stock is cheaper than your chai break. But promoters have pledged 88.7% of their holding, meaning the real construction work might be happening in the lenders’ offices.
2. Introduction
If infrastructure is the backbone of the economy, Patel Engineering is one of the vertebrae — with a few cracks that need regular check-ups. Founded with a knack for taking on massive hydro, irrigation, and tunneling projects, the company has seen the highs of triple-digit growth and the lows of debt-laden restructuring phases.
From building dams to boring tunnels, Patel has mastered civil engineering’s heavy-lifting segment. But, like every good Indian thriller, the balance sheet comes with suspense — high borrowings, promoter pledging, and big contingent liabilities. The good news? FY26 has started with a strong Q1, net profit up ~56% and revenue up ~12%. The bad news? The rope bridge to stability still sways when the financial winds blow.
3. Business Model (WTF Do They Even Do?)
Patel Engineering earns
by constructing large-scale civil infrastructure.
Main segments:
- Hydropower Projects – Dams, tunnels, and water intake structures.
- Irrigation & Water Supply – Canals, lift irrigation schemes, pumping stations.
- Urban Infrastructure – Roads, bridges, metro tunnels.
- Industrial Structures – Heavy industrial civil works.
Revenue Source: Mostly EPC contracts from government & PSU clients. Payment schedules are milestone-based, which means cash flows can be erratic.
4. Financials Overview
TTM Figures:
- Revenue: ₹5,225 Cr
- Net Profit: ₹274 Cr
- EBITDA: ₹730 Cr
- EPS: ₹3.19
- ROE: 10% | ROCE: 15.3%
- Debt: ₹1,615 Cr
Key Trends:
- Sales CAGR (5Y): 14%
- Profit CAGR (5Y): 177% (helped by low base & debt restructuring).
- OPM stable at 14%.
- Borrowings reduced from ₹5,395 Cr in FY16 to ₹1,615 Cr in FY25 — slow but steady debt diet.
Fresh P/E Calculation:
Q1 FY26 EPS = ₹0.96
Annualized EPS = ₹3.84
At ₹38.7 →
