Patel Engineering Limited announced its results for Q3 FY’26, highlighting robust operational performance and strategic financial moves. Consolidated revenue for Q3 reached INR 1,239 crores, with 9-month revenue up 5.74% year-on-year to INR 3,681 crores. The company emphasized execution milestones, secured new orders, and successfully completed a INR 400 crore rights issue aimed at debt reduction, bringing the debt-to-equity ratio down to 0.33x.
Patel Engineering Posts Q3 FY’26 Results
Patel Engineering Limited disclosed its financial and operational performance for the quarter and nine months ended December 31, 2025. Management highlighted sustained momentum in the infrastructure sector, bolstered by the Union Budget 2026’s increased capital expenditure focus on hydro and pump storage projects.
Operational Milestones Achieved
The company noted significant operational achievements during the quarter, including the commissioning of Unit 2 and 3 of the Subansiri Hydropower Project, completion of Surge Gallery-2 excavation at Kwar, and breakthrough achievements in the Head Race Tunnel at Parnai Hydropower Project. These milestones underscore the firm’s technical depth in complex hydro and tunneling environments.
Financial Strengthening Strategy
A key strategic focus involved strengthening the balance sheet. The company successfully closed a INR 400 crores rights issue, which was 1.1x subscribed, primarily to reduce debt. Furthermore, Patel Engineering monetized non-core assets, realizing approximately INR 185 crores during the quarter. Total debt as of December 31, 2025, stood at INR 1,433 crores, down from INR 1,603 crores in March 2025.
Financial Highlights (Consolidated)
- Q3 Revenue: INR 1,239 crores
- Q3 EBITDA: INR 145 crores (Margin 11.7%)
- Q3 Profit After Tax: INR 71 crores (Margin 5.69%)
- 9-Month Revenue: INR 3,681 crores (Up 5.74% YoY)
- 9-Month EBITDA: INR 469 crores (Margin 12.73%)
- Debt to Equity: 0.33x
Order Book Visibility
As of December 31, 2025, the order book stands at INR 15,123 crores, providing multiyear visibility. The company has bids worth approximately INR 12,000 crores under evaluation. Management remains confident in securing INR 8,000 crores to INR 10,000 crores in new orders in the coming year, maintaining strict margin discipline. The current sector focus remains heavily tilted towards hydropower and pump storage, aligning with national clean energy targets.
Q&A Insights
Order Inflow and Guidance
Management stated that order inflow for the 9 months was around INR 3,000 crores. While recognizing a slight slowdown in achieving the full-year target, confidence remains based on the INR 12,000 crores in bids awaiting opening and a projected pipeline of over INR 50,000 crores over the next year. FY’27 revenue growth is guided around 10%, with margins targeted around 13%.
Dibang Project Update
Regarding the large Dibang Project, the company confirmed they were not L1 following an aggressive bid by another party. The difference between their bid and the L1 was estimated at almost INR 1,000 crores.
Gongri Project Model
The recently signed Gongri Hydropower Project is under a BOOT model, involving 4 years of construction followed by a 40-year power sale. The tariff structure aims to be a cost-plus PPA to ensure costs are covered and a reasonable margin is achieved, with an expected revenue of around INR 300 crores per annum post-completion.
Capital Allocation and Capex
Funds from non-core monetization and arbitration are prioritized for term loan repayment, with the goal of becoming a net cash company by FY ’27 (excluding working capital debt). Capex for the next 1-2 years for current EPC projects is budgeted between INR 100 crores and INR 150 crores.
Margin Outlook and Costs
The margin guidance is set at 13% to 14%, a slight moderation attributed to competitive intensity observed in some large bids. Management stated that the exceptional item related to new labor codes was a one-time adjustment. Cost optimization through IoT pilots is expected to yield savings of approximately 0.5% of revenues annually, starting from FY ’27.
Source: BSE
