Patel Retail Limited

Consumer Cyclical — Department Stores · NSE

₹236.00−₹0.58 (−0.25%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Patel Retail Limited operates a chain of retail supermarkets in India.

IndustryDepartment Stores

SectorConsumer Cyclical

Annual revenue₹1,037 Cr

How does it make money?

Turns over ₹1,037 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. 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?Some evidence

ROCE of 15.9% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE25.9%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +3% while net margin moved +132% 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+3%

Margin effect+132%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

57/ 100

Average

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

Valuation

77/ 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

18.1x

1.3Y Median

26.2x

16 monthly readings · mean 25.4x · range 16.2x–34.6x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 31% below its 1.3y median of 26.2x. 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 74% below the peer median of 69.2x.

vs. its own history

Cheap

26.2x median over 16 months · -31%

vs. sector peers

Cheap

69.2x median of 4 peers · -74%

vs. generic bands

Fair

15x–35x

EV/EBITDA

11.4x

PEG

0.54

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 4.3% to 8.0% over 3 years.
Debt is being paid down
Total debt is down 11% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 22.8% to 10.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 30.9% to 15.9% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 56% against revenue up 3% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 239% against revenue up 3% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹101 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 4.3% to 8.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 31% 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 74% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

Sales are being booked faster than collected
Receivables are up 56% against revenue up 3%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 0.9% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 22.8% to 10.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1EBITDA margin holds above 6%✓ 8.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹101 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 0.9% CAGR
Latest reported year was 69.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 2.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 15.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

4 good · 6 neutral · 1 weak

Market Cap

₹788 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

18.1x

Fair

Fairly valued against the generic band

P/B Ratio

2.17x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹13.02

Profitable

Profitable on a per-share basis

ROE

10.7%

Moderate

Moderate capital efficiency

ROCE

15.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.45x

Low

Conservative leverage

Revenue Growth (YoY)

69.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

2.5%

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

-₹101 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

4.7%

Weak

Thin margins leave little room for error

Net Margin

3.5%

Average

Average bottom-line conversion

Current Ratio

2.25

Comfortable

Healthy short-term liquidity

52W Range Position

74%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

221.2 / 221.6

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

74.9

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,008 Cr	₹803 Cr	₹813 Cr	₹1,037 Cr	+0.9%
EBITDA	₹43 Cr	₹56 Cr	₹62 Cr	₹83 Cr	+24.2%
EBITDA Margin	4.3%	7.0%	7.6%	8.0%	—
PAT (Net Profit)	₹16 Cr	₹23 Cr	₹25 Cr	₹39 Cr	+33.6%
EPS	₹4.9	₹6.75	₹7.57	₹13.03	+38.5%
ROE	22.8%	23.9%	18.8%	10.7%	—
ROCE	30.9%	37.1%	32.1%	15.9%	—
Total Debt	₹184 Cr	₹188 Cr	₹183 Cr	₹163 Cr	-3.8%
Free Cash Flow	-₹17 Cr	₹13 Cr	₹16 Cr	-₹101 Cr	—

🟡 Revenue has been broadly flat over 3 years (0.9% a year).

🟢 EBITDA has grown at 24.2% a year over 3 years.

🟢 EBITDA Margin has risen from 4.3% to 8.0% over 3 years (+3.7 pts).

🟢 PAT (Net Profit) has grown at 33.6% a year over 3 years.

🟢 EPS has grown at 38.5% a year over 3 years.

🔴 ROE has fallen from 22.8% to 10.7% over 3 years (-12.1 pts).

🔴 ROCE has fallen from 30.9% to 15.9% over 3 years (-15.0 pts).

🟢 Total Debt has shrunk at 3.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹620 Cr

Total Liabilities

₹256 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

-₹83 Cr

Capex

-₹17 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

74.4%

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

2 mixed4 general

Patel Retail (PATELRMART) Share/Stock Price Live, NSE

TechGraph, 08 Oct

Should You Be Adding Patel Retail (NSE:PATELRMART) To Your Watchlist Today?

Simply Wall Street, 10 Oct

PATEL RETAIL LTD. Fact Sheet, PATEL RETAIL LTD. Financial Results

Equitymaster, 01 OctResults

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

Patel Retail Opens 54th Store In Kalyan; Shares Fall 1.43%

HDFC Sky, 28 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Is Patel Retail the Best Stock in Its Sector? A Look at the Numbers

Univest, 05 Oct

Small-cap retail stock jumps 4% from today's low. Details here

Livemint, 14 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

WeakBusiness Quality · Profitability · Risk

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. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; Revenue growth stays above 4% a year · see Key things to watch ↑