Patel Engineering Limited — Q1 FY26 earnings call

Call held 11 Aug 2025

Management summary

Patel Engineering reported a strong Q1 FY26, with consolidated revenue growing 12% YoY to ₹1,233 crores and net profit surging 56% to ₹75 crores. The company secured new orders worth ₹2,250 crores, bringing its order book to ₹16,285 crores. Management highlighted a focus on hydropower projects, debt reduction, and maintaining EBITDA margins of 13-14%, targeting ₹5,000 crores+ revenue for FY26.

Highlights

  • Consolidated revenue of ₹1,233 crores, up 12% YoY.

  • Consolidated net profit grew by 56% to ₹75 crores.

  • Consolidated EBITDA margin stood at 13.4%.

  • Order book as of June 30, 2025, was ₹16,285 crores.

  • Received new orders worth ₹2,250 crores in Q1 FY26.

  • Total debt reduced by ₹76 crores to ₹1,527 crores in Q1 FY26.

  • Targeting ₹5,000 crores+ revenue for FY26 with 5-10% growth.

  • Aiming for an order book of ₹20,000-25,000 crores by FY26 year-end.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹1,233 Cr
    YoY +12%
  • Consolidated Net Profit
    ₹75 Cr
    YoY +56%
  • Consolidated EBITDA
    ₹165 Cr
  • Consolidated EBITDA Margin
    13.4%
  • Total Debt (June 30, 2025)
    ₹1,527 Cr
  • Order Book (June 30, 2025)
    ₹16,285 Cr
  • Book-to-Bill Ratio
    3.3×

Q1 FY26

  • Debt Reduction
    ₹76 Cr
  • Order Inflow
    ₹2,250 Cr

What they filed

Q1 FY27: revenue up 3.9%, net profit up 21.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,174 1,206 1,612 1,233 1,208 +3%1,239 +3%1,421 −12%1,281 +4%
EBITDA162 184 218 165 159 −2%145 −21%215 −1%180 +9%
Net profit73 82 38 81 73 +0%72 −12%44 +16%98 +21%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentTunnelingIrrigation
Revenue Mix19%19%
Order Book Mix7%20%

Guidance & targets

Order Book

  • Order Book Target Order Book · this year-end (FY26) · High confidence around INR25,000 crores
    Our target is to increase the order book to around -- by INR25,000 crores by this year-end.

    — Kavita Shirvaikar, Managing Director

  • Incremental Order Book Addition Order Book · this year (FY26) · High confidence another INR 8000 crores to INR 10,000 crores
    So we expect another INR 8000 crores to INR 10,000 crores addition in the order book.

    — Kavita Shirvaikar, Managing Director

Debt

  • Debt Reduction Debt · Current year (FY26) · High confidence around INR150 crores to INR200 crores
    Current year, our target is to reduce around INR150 crores to INR200 crores debt.

    — Kavita Shirvaikar, Managing Director

Revenue

  • Turnover Target Revenue · this year (FY26) · High confidence INR5,000 crores plus
    See, I'll tell you, this year, our target is to cross the INR5,000 crores plus turnover.

    — Kavita Shirvaikar, Managing Director

  • Revenue Growth Revenue · FY '26 · Medium confidence 5% to 10%
    But now since we have accelerated, we said we are confident to achieve the 5% to 10% growth.

    — Kavita Shirvaikar, Managing Director

  • Long-term Revenue Growth Revenue · from FY '27 onwards · Medium confidence around 10% to 15%
    considering that from FY '27 onwards, we are hopeful to achieve around 10% to 15% growth going forward.

    — Kavita Shirvaikar, Managing Director

  • Long-term Revenue Target Revenue · next 4, 5 years · High confidence Double the revenue size
    Yes, internal target is like next 4, 5 years, we want to double from here.

    — Rahul Agarwal, CFO

Profitability

  • EBITDA Margin Profitability · quarterly / going forward · High confidence 13% to 14%
    Now, coming to the EBITDA margin, in beginning only we said our EBITDA margin will be 13% to 14%, and quarterly, it will vary based on the project execution, which work we do. So that we will continue to -- we are confident that we will be able to maintain that kind of margin.

    — Kavita Shirvaikar, Managing Director

Order Inflow

  • Order Inflow Target Order Inflow · this year (FY26) · High confidence around INR8,000 crores
    so we are fairly estimating that around INR8,000 crores work we should be able to get.

    — Kavita Shirvaikar, Managing Director

Bidding Pipeline

  • Identified Projects for Bidding Bidding Pipeline · this year (FY26) · High confidence around INR40,000 crores to INR50,000 crores
    and further identified projects of around INR40,000 crores to INR50,000 crores, for which bids are expected to be submitted this year.

    — Kavita Shirvaikar, Managing Director

Risks & concerns

  • Arbitration claims locking up capital

    medium

    ₹3,000 crores in claims with an expected 50-60% recovery over 5-7 years, impacting capital efficiency.

    Analyst acknowledged

  • Project delays and funding bottlenecks

    low

    Management states that government is proactive in resolving issues and land acquisition is done before LoA, mitigating this risk.

    Analyst acknowledged

  • Environmental and approval risks in hydro projects

    low

    Management states government has taken steps like ensuring 90-100% land acquisition before issuing LoA.

    Analyst acknowledged

  • Monsoon/weather impact on execution

    low

    Management states they are prepared for monsoon impacts on project execution.

    Analyst acknowledged

Areas of evasion (2)

  • Specific timeline for promoter pledge reduction
  • Exact breakdown of PSP projects in the pipeline

Q&A highlights

3 direct
Diversification into new infrastructure segments and backup plans for project delays/funding bottlenecks. Direct
So going forward also, looking at the current opportunity available in the sector itself where we have a expertise and government plan going forward, like, as I mentioned in my speech also that due to Indus water treaty, the hydro power and dam and everything is government is also completely focusing and long stuck projects also getting clearance faster.

Addresses strategic growth beyond core hydro and how the company plans to mitigate execution risks, highlighting government support and focus on hydro.

Asked by Sucrit D Patil

Order book ramp-up, size of bidding pipeline projects, and government focus on pump storage. Direct
See after the Indus water treaty, government's focus is in large dam and clearance of large dam and hydropower projects. Because as you rightly said, there is a because of the large ticket size, it takes time for the approval and all the process, but once approved, but they are expediting. And we see now going forward next 2 quarters, lot of projects are coming for the bidding, actually.

Provides insight into the government's renewed focus on large hydro projects, the typical size of projects in the bidding pipeline (₹1,000-3,000 crores), and the expected pace of bidding.

Asked by Chirag Shah

Arbitration claims (₹3,000 crores) recovery timeline and impact on capital efficiency. Direct
So what I was saying is that expected is 50%, 60% for the claims plus interest, so that overall number is pretty high. And we expect to recover these over the next 5 to 7 years because slowly, slowly it will start coming in every year because it goes through various stages of courts and everything.

This is a significant amount of locked-up capital, and management provides a clear expectation for recovery percentage and a realistic, albeit long, timeline, which impacts the company's balance sheet and ROE.

Asked by Janish Shah

2 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Overview

Patel Engineering reported a robust start to FY26, with consolidated revenue reaching ₹1,233 crores, marking a 12% year-on-year growth. Net profit saw a significant increase of 56%, climbing to ₹75 crores from ₹48 crores in Q1 FY25. The consolidated EBITDA margin stood at 13.4%, with standalone EBITDA margin at 13%. This strong performance was attributed to accelerated execution across project sites despite early monsoon impacts.

Order Book and Inflow Dynamics

As of June 30, 2025, the company's order book was ₹16,285 crores, excluding a recently received ₹240 crore LoA for the Teesta V Hydropower Project. In Q1 FY26, Patel Engineering secured new orders totaling ₹2,250 crores, including a 240MW hydropower project (₹711 crores), Kondhane Dam (₹1,319 crores), and Nira Deoghar irrigation project (₹200 crores share). The current book-to-bill ratio stands at a healthy 3.3, providing strong revenue visibility.

Debt Reduction and Financial Health

The company demonstrated significant progress in debt reduction, with total debt decreasing by ₹76 crores in Q1 FY26 to ₹1,527 crores. This includes ₹981 crores in working capital debt and ₹546 crores in term debt. Overall debt plus contractee advances reduced by ₹122 crores. Finance costs also decreased from ₹84 crores in Q1 FY25 to ₹73 crores in Q1 FY26, and the debt-to-equity ratio improved from 0.42 to 0.40. Management targets a further debt reduction of ₹150-200 crores for the full FY26.

Hydropower Focus and Growth Opportunities

Patel Engineering continues its strong focus on the hydropower sector, which constitutes 61% of its current order book and 55% of Q1 FY26 revenue. The company is actively bidding for projects from a pipeline of ₹40,000-50,000 crores, with 60% of this pipeline expected to be hydroelectric projects. Management anticipates securing ₹8,000-10,000 crores in new orders this year, aiming for an order book of ₹20,000-25,000 crores by FY26 year-end. The government's renewed focus on large dam and hydropower projects, especially after the Indus water treaty suspension, presents significant opportunities.

Operational Achievements and Execution Pace

Operational highlights for the quarter include completing Powerhouse Unit 1 and a 155-meter surge shaft at Arun III Hydropower Project in Nepal. In India, the company achieved breakthrough of the main access tunnel at Kwar Hydropower Project and completed all civil works for the 12.5 km water conductor system at Subansiri Hydropower Project. Significant tunneling progress was also made at the PGRW project in Mumbai (1,972 meters) and T-7 tunnel project in Sikkim (over 3 km of lining work), indicating strong execution momentum.

Arbitration Claims and Capital Efficiency

The company has approximately ₹3,000 crores in arbitration claims and awards. Management expects a recovery of 50-60% of this amount, plus interest, over the next 5 to 7 years. While this capital is currently locked, management noted that new claim build-up is not happening due to government initiatives to settle issues during execution. This long-term recovery is expected to improve the company's ROE and overall capital efficiency.

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