Patel Engineering Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Patel Engineering Ltd trades at ₹29.6, in a downtrend and 93 weeks into that stage. That is −4.3% against its own 200-day average. It sits at 39% of a 52-week range of ₹24 to ₹39. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 10 straight weeks.

Today the stock is in a downtrend — week 93 of stage 4, confirmed. At ₹29.6 it trades −4.3% versus its 200-day average and sits at 39% of its 52-week range (₹24–₹39).

Against the market, two honest reads. Cumulative: over the last 10.3 years the stock moved −25% while the NIFTY 500 moved +274% — behind the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 10 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

→ The trend is one thing; the bill is another. Are you paying up for it? Next: the P/E sits at the 15th percentile of its own range.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Patel Engineering Ltd trades at 7.0× P/E, near the bottom of its own range — cheaper only 15% of the time. Its long-run median P/E is 11.9×, measured across 7.9 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 7.0× is near the bottom of its own range — cheaper only 15% of the time, against a long-run median of 11.9× measured over 7.9 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +5.2% against a −22.4% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 3y, of the −12.3%/yr price move, ~+31.7%/yr came from earnings growth and ~−44.0 pp from the multiple (compressing). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is low against its own past, so the story rests on the earnings line underneath it, not the multiple.

→ Cheap or dear rides on the earnings. Are they actually growing? Next: the fundamental stage — where the business sits in its arc, and how growth has compounded.

Stage: Mixed Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Patel Engineering Ltd reads as mixed on its fundamental arc. Mixed — the growth curves are steadily positive, but ROCE at 10.4% is below the 15% bar this page requires to call it Consistent. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: when the curves disagree, the per-curve reads above matter more than any single verdict.

→ The stage names the trajectory. Next: the revenue line that produces it, quarter by quarter.

4-Factor Sector Score

57.2/100 — rank 3 of 17 in Infra - Construction & Contracting · 94% evidence confidence

Patel Engineering Ltd scores 57.2 out of 100 against the 17 companies it is compared with in Infra - Construction & Contracting, ranking 3. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 16.4 + 15.2 + 17.8 + 7.8 = 57.2. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Patel Engineering Ltd reported ₹1,421 Cr of revenue in the Mar 26 quarter, −11.8% year on year. Over 10 years it has compounded at 2.4% a year. The last full year, FY26, came in at ₹5,103 Cr. The last four reported quarters add to ₹5,101 Cr.

Patel Engineering Ltd reported ₹1,421 Cr of revenue in the Mar 26 quarter, −11.8% year on year. Over 10 years it has compounded at 2.4% a year. The last full year, FY26, came in at ₹5,103 Cr. The last four reported quarters add to ₹5,101 Cr.

FY26 revenue came in at ₹5,103 Cr (+0.2% on the year), capping 10 years at 2.4% compound. The latest quarter (Mar 26) printed ₹1,421 Cr, −11.8% year on year.

Pace check: the last four quarters averaged +1.4% growth against the decade's 2.4% — the current year is running in line with its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +0.1% over the last 4 quarters against +6.0%/yr over the last 8 — rolling over; TTM profit +8.9% vs −3.5%/yr — accelerating.

→ Revenue slipped — did margins hold as it scaled? Next: 15.0% this quarter (+1.0 pp YoY).

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Patel Engineering Ltd's operating margin is 15.0% in the Mar 26 quarter, +1.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 7.0% to 23.0%. The current quarter sits inside that band.

Patel Engineering Ltd's operating margin is 15.0% in the Mar 26 quarter, +1.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 7.0% to 23.0%. The current quarter sits inside that band.

The latest quarter's operating margin is 15.0%, +1.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 7.0%–23.0%.

Why the margin moved: operating margin went +1.6 pp year on year while gross margin went +4.9 pp — the gain came mostly from the gross line: input costs and pricing.

→ Margins held — did that reach the bottom line? Next: profit +15.8% in the latest quarter.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Patel Engineering Ltd earned ₹44.0 Cr of net profit in the Mar 26 quarter, +15.8% year on year. Full-year FY26 profit was ₹269 Cr. That is 3.1% of the quarter's revenue. The same quarter a year earlier earned ₹38.0 Cr.

Patel Engineering Ltd earned ₹44.0 Cr of net profit in the Mar 26 quarter, +15.8% year on year. Full-year FY26 profit was ₹269 Cr. That is 3.1% of the quarter's revenue. The same quarter a year earlier earned ₹38.0 Cr.

Mar 26 profit was ₹44.0 Cr, +15.8% year on year. On the full year, FY26 printed ₹269 Cr (+8.5%).

Why profit moved: revenue contributed −11.8% and the margin +1.0 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit +12.7% vs revenue +1.4%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

→ Profit rose — but did the cash follow? Next: 200% of the last 3 years' profit arrived as cash.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 200% of Patel Engineering Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹560 Cr of operating cash against ₹269 Cr of profit. After ₹69.0 Cr of capital spending, ₹491 Cr was left as free cash.

FY26: operating cash of ₹560 Cr against reported profit of ₹269 Cr, leaving free cash of ₹491 Cr after ₹69.0 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 200% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 200%: the cash cycle tightened 151 days between FY21 and FY26 — cash that used to wait in the cycle now reaches the bank sooner.

Router verdict: no single sink dominates — the next section checks both the working-capital cycle and the capital spending.

→ So follow the cash to where it goes. Next: a −72-day cycle and ₹241 Cr of building.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Patel Engineering Ltd's cash conversion cycle runs −72 days in FY26, down from 79 days in FY21. Capital spending ran ₹241 Cr over the last 3 years. At FY26 sales of ₹5,103 Cr each day of that cycle holds about ₹14.0 Cr, so roughly ₹−1,007 Cr sits inside the business at any moment.

FY26: debtors at 43 days, inventory at 95 days — roughly 3.1 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of −72 days, tighter than FY21's 79.

The full loop: cash goes out to suppliers and production on day 0; stock waits 95 days to sell; customers pay about 43 days after that; and suppliers themselves are paid at 210 days — netting out to the −72-day cycle.

In money terms: at FY26 sales of ₹5,103 Cr, each day of the cycle holds about ₹14.0 Cr — so the −72-day loop keeps roughly ₹−1,007 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹241 Cr over the last 3 fiscal years against ₹302 Cr of depreciation — spending at or below maintenance level. Capital work-in-progress stands at ₹126 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: neither the cycle nor the build-out is hoarding the cash — the machine is reasonably clean.

→ Does all this activity actually earn its cost of capital? Next: ROCE is 14% and the ROIC − WACC spread is −1.1 pp.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Patel Engineering Ltd earns a ROCE of 14% in FY26. That is up from a trough of 6% in FY20. Return on invested capital clears the cost of that capital by −1.1 percentage points, so growth here is not yet paying for the capital it uses. The wiring behind it is 5.3% net margin on 0.54× asset turns.

FY26 ROCE is 14%, recovered from a FY20 trough of 6% — the full ladder below shows the fall and the climb, undoctored.

🚨 Why the return is what it is — the wiring (FY26): 5.3% net margin × 0.54× asset turns × 2.14× balance-sheet leverage ≈ 6.1% on equity. Margin does its share; leverage is a meaningful part of the equation.

The capstone test — ROIC − WACC: 10.9% − 12.0% = a −1.1 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. Negative — growth at these returns destroys value until the returns recover.

→ Returns like these — is the balance sheet borrowing to make them? Next: debt-to-equity is 0.27.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Patel Engineering Ltd carries total debt of ₹1,216 Cr against shareholder equity of ₹4,442 Cr as of Mar 26, a debt-to-equity of 0.27 — effectively unlevered. On the annual view that ratio went from 0.93 in FY22 to 0.27 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Mar 26: total debt of ₹1,216 Cr against shareholder equity of ₹4,442 Cr — a debt-to-equity of 0.27. On the annual view, debt-to-equity went from 0.93 (FY22) to 0.27 (FY26). The returns on this page are earned, not borrowed.

→ Who owns this, and are they adding or leaving? Next: Promoters cut 4.6 points over 8 quarters.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Promoters cut 4.6 points of Patel Engineering Ltd over 8 quarters, the biggest move on the register. That takes promoters to 31.5% of the company. Domestic institutions moved −1.5 points over the same window, to 4.8%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Promoters: −4.6 points over 8 quarters to 31.5%; Domestic institutions: −1.5 points over 8 quarters to 4.8%; Foreign institutions: −0.4 points over 8 quarters to 3.3%.

🚨 Why the register moved: promoters drove it (−4.6 points), alongside domestic institutions (−1.5 points) — distribution into the market’s bid.

→ One last check: does the safety math agree? Next: the balance-sheet safety line.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Patel Engineering Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

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