Patel Engineering Ltd. is expecting new orders worth Rs 10,000 crore to Rs 12,000 crore in the current and next financial years, according to Chief Financial Officer Rahul Agarwal.
However, fiscal 2026 may be a bit flattish in terms of revenue, considering that the FY25 order inflow was sluggish due to the election year, he told NDTV Profit in a conversation on Friday.
"But the order inflow in FY26 and 27 looks good. What we expect is Rs 10,000 crore to Rs 12,000 crore of new orders coming in this year and maybe next year also," Agarwal said. "So, FY27 onwards, we see a good growth coming in terms of revenue."
The infrastructure and construction services company's consolidated net profit plunged 73% year-on-year to Rs 38.2 crore in the March quarter, while revenue jumped 20% to Rs 1,612 crore.
The return on capital stands at 14% to 15% and is expected to hold steady. The return on equity is expected to improve as profit rises with revenue growth, according to the CFO.
Order Book
Patel Engineering's order book currently stands at Rs 17,500 crore, with Rs 2,500 crore secured after March. "But these new orders will take some time to mobilise because six to eight months go into mobilisation. So, that revenue will start kicking in next year," he said.
The company plans to bid for projects worth Rs 50,000 crore in FY26, with an expected success rate of 18% to 20%. It expects to secure Rs 10,000 crore in order inflows from the bidding.
Hydropower, pump storage, irrigation and tunnelling make up 90% of Patel Engineering's order book, he said
"The opportunity is huge. There is almost 30 GW of work expected to come in for pump storage and also for hydro power, which is of a similar size.
"It is about picking and choosing. We will not pick everything. So, we are looking to build around Rs 50,000 crore," Agarwal added.
The company is targeting revenue growth of 10% to 15% and an Ebitda margin of around 14% in FY27. Its borrowing levels will remain steady, with some working-capital loans offset by debt repayments, according to Agarwal. "We are not anticipating a major increase in the debt."
Patel Engineering's book-to-bill ratio has improved from four to three. Agarwal expects the ratio to stabilise between three-and-a-half and four, given the four-to-five-year project cycles in hydropower and pump storage ventures.
The company, which generates approximately Rs 350 crore in free cash flow annually, plans to sustain its annual capital expenditure at Rs 150 crore to Rs 200 crore, he said.
"The capex will generally be funded through client advances. And whatever cash flow we generate, we will try to put it back in the business itself because there are a lot of opportunities coming in," the CFO added.
Shares of Patel Engineering closed 1.62% higher at Rs 43.16 apiece on the BSE on Friday, compared to a 0.24% decline in the benchmark Sensex.
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