1. At a Glance
Patil Automation Ltd is a ₹520 Cr SME-listed player that builds welding and line automation systems for auto OEMs. It’s profitable, debt-light, and ROE-positive—but also blessed with 154 debtor days and a PE of 46. All this to automate your Maruti’s birth. Question is—can it scale like it sells?
2. Introduction with Hook
Imagine if Iron Man quit Avenger-ing and started building assembly lines in Pune. That’s Patil Automation—a hardcore industrial techie making sure robots do the dirty work in your car factories.
- FY25 Sales: ₹118 Cr
- Net Profit: ₹12 Cr
- ROE: 26%, ROCE: 24.5%
- Recent win? ₹19 Cr battery pack assembly order
But hold up. While automation is sexy, capital cycles, high receivables, and SME status aren’t. Is this the next unicorn or a temporary tech tease?
3. Business Model (WTF Do They Even Do?)
Patil Automation designs, manufactures, and installs automation systems for manufacturing—particularly the automotive industry. Their lineup includes:
- Robotic Welding Lines
- Assembly Automation
- Testing Stations
- End-of-line Systems
Core clientele?
- Auto OEMs
- Tier-1 suppliers
- EV component makers
It’s high-ticket B2B with 6–9 month execution cycles. Customised tech = sticky client relationships. But… cash flows are laggy.
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Sales | ₹78 Cr | ₹115 Cr | ₹118 Cr |
| EBITDA | ₹5 Cr | ₹13 Cr | ₹15 Cr |
| Net Profit | ₹4 Cr | ₹8 Cr | ₹12 Cr |
| ROE | 17% | 25% | 26% |
| EPS | ₹8.33 | ₹15.56 | ₹7.3 (post-cap expansion) |
Revenue growth: 2% YoY
Profit growth: 43% TTM
Bottom line growing faster than top line = margin improvement from scale and process optimization.
5. Valuation
Method 1: PE Multiple
- EPS (FY25): ₹7.3
- Industry SME automation PE: 25–35x
- Fair Value Range: ₹183 – ₹256
Method 2: EV/EBITDA
- EBITDA FY25: ₹15 Cr
- EV/EBITDA: 12–14x
- Implied EV: ₹180–₹210 Cr → Market Cap ≈ ₹500 Cr = Premium
Current Price = ₹238
Conclusion: It’s priced for growth, not comfort. If it doesn’t double revenue in 2 years, PE rerating is inevitable.
6. What’s Cooking – News, Triggers, Drama
- June 2025: ₹19.31 Cr EV battery pack order → highest ever single deal
- Corporate Governance Relief: Exempt from SEBI governance due to SME status
- Capital Expansion (FY25): Equity capital tripled—dilution dinged EPS
- High Receivables: 154 debtor days + WC spike = cash stress
Next trigger? Completion of battery pack project by Oct 2025. If executed well, could mean scale-up in EV vertical.
7. Balance Sheet
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity | ₹5 Cr | ₹5 Cr | ₹16 Cr |
| Reserves | ₹19 Cr | ₹27 Cr | ₹38 Cr |
| Borrowings | ₹33 Cr | ₹23 Cr | ₹23 Cr |
| Total Liabilities | ₹94 Cr | ₹92 Cr | ₹115 Cr |
| Fixed Assets | ₹14 Cr | ₹16 Cr | ₹13 Cr |
| Other Assets | ₹80 Cr | ₹75 Cr | ₹102 Cr |
Takeaway:
Equity capital increase (IPO/dilution), liabilities stable, but WC growing rapidly = scaling pain.
8. Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY23 | ₹0 Cr | ₹2 Cr | ₹16 Cr | ₹18 Cr |
| FY24 | ₹7 Cr | ₹-3 Cr | ₹-12 Cr | ₹-7 Cr |
| FY25 | ₹1 Cr | ₹-6 Cr | ₹8 Cr | ₹3 Cr |
Observations:
- Very little cash from operations
- High financing activity (equity/dilution)
- Investing ramping up—likely for new tech + infra
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 17% | 25% | 24.5% |
| ROE | 17% | 25% | 26% |
| Debtor Days | 87 | 57 | 154 |
| Inventory Days | 76 | 123 | 105 |
| CCC | 33 | 135 | 155 |
| PE (TTM) | NA | NA | 46.6 |
Verdict:
Return ratios are elite. But CCC of 155 days? That’s 5 months of waiting-for-payment hell.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA Margin | Net Profit | EPS |
|---|---|---|---|---|
| FY23 | ₹78 Cr | 7% | ₹4 Cr | ₹8.33 |
| FY24 | ₹115 Cr | 11% | ₹8 Cr | ₹15.56 |
| FY25 | ₹118 Cr | 13% | ₹12 Cr | ₹7.3 |
Margins expanding. But dilution post-FY24 IPO has hit per-share profitability.
11. Peer Comparison
| Company | CMP | PE | ROE | OPM | Sales | Market Cap |
|---|---|---|---|---|---|---|
| Kaynes | ₹6,023 | 137 | 11% | 15.1% | ₹2,722 Cr | ₹40,352 Cr |
| Jyoti CNC | ₹1,027 | 72 | 21% | 27% | ₹1,818 Cr | ₹23,364 Cr |
| Tega Ind | ₹1,772 | 59 | 15.5% | 20.7% | ₹1,639 Cr | ₹11,842 Cr |
| Patil Auto | ₹238 | 46 | 26% | 13% | ₹118 Cr | ₹520 Cr |
Clearly an outlier. Small size, high ROE, lower valuation—potential multibagger IF it scales like peers.
12. Miscellaneous – Shareholding, Promoters
| Holder | % |
|---|---|
| Promoters | 69.29% |
| FIIs | 2.93% |
| DIIs | 7.33% |
| Public | 20.45% |
| Shareholders | 2,205 |
Observations:
- Promoter holding solid
- FII + DII in a SME? Rare = confidence vote
- Free float still low = liquidity risk
13. EduInvesting Verdict™
Patil Automation is that nerdy engineering student who just got funding from an angel investor and now wants to build a factory of robots. High on talent, but still low on resources.
Why It’s Worth Tracking:
- Sticky customer base (OEMs, Tier 1)
- Expanding into EV automation (battery pack project)
- Consistent profitability, margin expansion
- ROE > 25%, ROCE > 24%
Why You Should Be Cautious:
- Valuation rich for current scale
- Receivable days and CCC = worrying
- SME stock = low liquidity, regulatory leniency
- EPS hit from capital dilution
Final Thought:
This is a classic smallcap engineering play. You’re either getting in before the boom—or buying a dream that never fully assembles. Watch Oct 2025 delivery milestone. That’s when Patil either automates wealth—or stalls.
Metadata
– Written by EduInvesting Research | 14 July 2025
– Tags: Patil Automation, SMEStocks, AutoAncillary, WeldingTech, EVAutomation, HighROE, PuneEngineers
