14-05-2025
Patel Engineering Ltd (BOM:531120) Q4 2025 Earnings Call Highlights: Record Revenue and ...
Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Patel Engineering Ltd (BOM:531120) achieved a milestone by surpassing INR 5,000 crore in revenue for the first time in its history, with a 12% increase compared to the previous year.
The company reported a significant increase in profit before tax and exceptional items, rising to INR 477 crore from INR 319 crore in the previous year.
Successful completion of several key projects, including Tunnel T15 and parts of Tunnel T14, as well as significant progress in projects across Jammu and Kashmir, Nepal, and other regions.
The order book as of March 31, 2025, stands at INR 15,217 crore, with a strong pipeline of projects in hydropower, irrigation, and tunneling sectors.
The company has reduced its consolidated gross debt from INR 1,886 crore to INR 1,600 crore, improving its debt-to-equity ratio to 0.42 from 0.6 in the previous year.
Net profit decreased to INR 242 crore from INR 264 crore in the previous year due to exceptional items related to the Viva Vishwa scheme.
The company expects flat revenue growth for FY 526 due to subdued order inflow in FY 525, impacted by elections.
Employee costs increased by 30% in the quarter, outpacing the 20% revenue growth, attributed to new hiring.
The company faces challenges in maintaining consistent margins due to variations in project execution and cost fluctuations.
High percentage of promoter holdings (89%) is pledged, raising concerns about financial flexibility.
Warning! GuruFocus has detected 3 Warning Sign with BOM:531120.
Q: What is the actual amount received from the Viva Vishwa scheme this financial year, and will similar provisions be expected in FY26? A: This financial year, we received around INR 350 crore from the scheme. The scheme was only up to this year, so no similar provisions are expected in FY26. (Respondent: CFO, Mr. Rahul Agarwal)
Q: Can you explain the increase in employee costs this quarter compared to revenue growth? A: There is no specific reason for the increase. On a yearly basis, the increase is around 8-9%. Some costs may have come in this quarter due to new hiring. For next year, it's better to consider the yearly number for growth projections. (Respondent: CFO, Mr. Rahul Agarwal)
Q: What is the outlook for order inflow and revenue growth in FY26? A: Due to subdued order inflow in FY25, we expect stable revenue in FY26. However, with new projects worth INR 2,000 crore already received, we anticipate growth from FY27 onwards. (Respondent: Managing Director, Ms. Kavita Shivakar)
Q: What opportunities arise from the suspension of the Indus Water Treaty, and how does it affect project timelines? A: The suspension is expected to expedite project clearances, particularly for hydropower projects. We anticipate faster project launches and clearances, enhancing visibility for the 30,000 megawatts of identified projects. (Respondent: Managing Director, Ms. Kavita Shivakar)
Q: What is the company's strategy for managing debt and finance costs in the coming years? A: We aim to reduce term debt by around INR 200 crore, although working capital debt may increase. Overall, we do not expect a significant rise in total debt, and finance costs are expected to remain stable. (Respondent: CFO, Mr. Rahul Agarwal)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
