Patel Engineering Limited

Industrials — Engineering & Construction · NSE

₹24.54−₹0.06 (−0.24%)

DalalBaazaar Score

61 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

The 60-second version of Patel Engineering Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Patel Engineering Limited, together with its subsidiaries, provides infrastructure and construction services in India and internationally. The company operates through EPC and Real Estate segments.

IndustryEngineering & Construction

SectorIndustrials

Employees4,364

Annual revenue₹4,678 Cr

How does it make money?

Turns over ₹4,678 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 4,364 employees supports ₹1.07 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.07 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 9.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.1%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 9.8% and earnings to grow about 13.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+9.8%

Est. earnings growth+13.5%

Analysts1

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +28% while net margin moved +15% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+28%

Margin effect+15%

DalalBaazaar Score

61/ 100

Good

Weighted across six categories. Every point is explained below.

✗ ROE of 6.1% is weak

Quality vs. Valuation

Company Quality

56/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

88/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

8.4x

3Y Median

13.3x

40 monthly readings · mean 16.2x · range 7.9x–30.2x

Sector Median

30.1x

median of 3 sector peers

🟢Current valuation is approximately 36% below its 3y median of 13.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 72% below the peer median of 30.1x.

vs. its own history

Cheap

13.3x median over 40 months · -36%

vs. sector peers

Cheap

30.1x median of 3 peers · -72%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

4.0x

PEG

0.62

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 31% over 3 years.
Very low debt
Debt/Equity of 0.27x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 31% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 36% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 72% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹450 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 15%✓ 17.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.
3Revenue growth stays above 6% a year✓ 8.6% CAGR
Latest reported year was 3.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹450 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

7 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹2,344 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.4x

Cheap

Cheap against the generic band

P/B Ratio

0.57x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.91

Profitable

Profitable on a per-share basis

ROE

6.1%

Weak

Weak capital efficiency

ROCE

9.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.27x

Low

Conservative leverage

Revenue Growth (YoY)

3.8%

Modest

Modest growth

Profit Growth (YoY)

8.0%

Modest

Slow profit growth

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹450 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

5.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

12.0%

Average

Average margins

Net Margin

5.6%

Average

Average bottom-line conversion

Current Ratio

1.45

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.64

Defensive

Steadier than the market

52W Range Position

16%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

25.9 / 27.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

12.6

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,655 Cr	₹4,222 Cr	₹4,507 Cr	₹4,678 Cr	+8.6%
EBITDA	₹600 Cr	₹748 Cr	₹890 Cr	₹804 Cr	+10.2%
EBITDA Margin	16.4%	17.7%	19.8%	17.2%	—
PAT (Net Profit)	₹183 Cr	₹290 Cr	₹248 Cr	₹269 Cr	+13.6%
EPS	₹2.29	₹3.28	₹2.8	₹2.84	+7.4%
ROE	6.4%	9.2%	6.5%	6.1%	—
ROCE	10.5%	14.0%	10.8%	9.0%	—
Total Debt	₹1,758 Cr	₹1,910 Cr	₹1,664 Cr	₹1,216 Cr	-11.6%
Free Cash Flow	₹534 Cr	₹529 Cr	₹189 Cr	₹450 Cr	-5.5%

🟢 Revenue has grown at 8.6% a year over 3 years.

🟢 EBITDA has grown at 10.2% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 17.2% over 3 years.

🟢 PAT (Net Profit) has grown at 13.6% a year over 3 years.

🟢 EPS has grown at 7.4% a year over 3 years.

🟡 ROE has held roughly flat at 6.1% over 3 years.

🔴 ROCE has fallen from 10.5% to 9.0% over 3 years (-1.5 pts).

🟢 Total Debt has shrunk at 11.6% a year over 3 years.

🔴 Free Cash Flow has shrunk at 5.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹9,522 Cr

Total Liabilities

₹5,080 Cr

Cash & Equivalents

₹380 Cr

Operating Cash Flow

₹560 Cr

Capex

-₹110 Cr

Shareholding (proxy)

Institutional Holding

2.3%

Insider Holding

33.8%

Corporate Actions

Ex-Dividend Date

01 Oct 2012

Analyst Consensus

Target Price (Mean)

₹33

+34.5% vs CMP

Target Range

₹33 – ₹33

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

1 positive4 mixed1 general

Patel Engineering Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

Patel Engineering PAT rises 25% in Q1FY27; order book stands at ₹14,636 crore

scanx.trade, 17 AugOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Patel Engineering Q2 FY27: Date and Expectations

Univest, 10 SeptResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Why Patel Engineering's (NSE:PATELENG) Earnings Are Better Than They Seem

Simply Wall Street, 23 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Patel Engineering Shares Rally 3% on Strong Q1 Profit

Equitypandit, 10 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Patel Engineering Scheduled to Meet Analysts and Investors on September 28

Sahi, 22 SeptAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

MiddlingBusiness Quality · Risk

WeakProfitability

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

1 of 5 tripwires tripped — Interest cover stays above 3x · see Key things to watch ↑