Patel Engineering Sets Ambitious Growth Targets

Ashwin Thakker

— 2 min read
  • FY26 Revenue Target: Over INR5,000 crores, targeting 5%-10% growth.
  • EBITDA Margin Outlook: Expected to remain stable at 13%-14%.
  • FY26 Order Book Target: Incremental INR8,000-INR10,000 crores addition, aiming for INR25,000 crores total.
  • Long-Term Revenue Growth: Targeting 10%-15% from FY27 onwards; aiming to double revenue in 4-5 years.
  • FY26 Debt Reduction: Target of INR150-INR200 crores; INR75 crores already achieved in Q1.
  • Significant Bidding Pipeline: INR40,000-INR50,000 crores identified for this year, with ~60% in hydroelectric.

Patel Engineering commenced FY26 with a strong performance, reporting a 12% Q1 revenue growth and a 56% surge in net profit. This initial momentum positions the company for significant future expansion. Management outlined robust plans for order book growth, consistent margins, and strategic debt reduction, signaling a confident outlook in India's burgeoning infrastructure sector, especially in its core expertise areas.

Expanding Order Book Fuels Future Growth

Patel Engineering's order book reached INR16,285 crores by June 30, 2025, boosted by INR2,500 crores in new orders in Q1 FY26 and early Q2. Management projects an incremental INR8,000 to INR10,000 crores in orders by year-end, targeting INR25,000 crores total. This growth is underpinned by a robust bidding pipeline of INR40,000-INR50,000 crores for FY26, with approximately 60% in hydroelectric projects. The company foresees 5%-10% revenue growth for FY26, increasing to 10%-15% from FY27, with an internal ambition to double revenue in 4-5 years.

“Our target is to increase the order book to around -- by INR25,000 crores by this year-end.” - Ms. Kavita Shirvaikar

Steady Margins and Deleveraging Efforts

Patel Engineering anticipates stable EBITDA margins of 13%-14% for FY26, sustained by selective bidding in less competitive hydroelectric segments. The company significantly reduced its total debt by INR76 crores in Q1. Management targets a further INR150-INR200 crores debt reduction this year, with most term debt expected to be repaid by FY27. They also foresee recovering 50%-60% of INR3,000 crores in arbitration claims over 5-7 years. This disciplined approach aims to strengthen the balance sheet and boost net profit through lower interest costs.

“The EBITDA margins are generally in the range of 13% to 14%... the net profit is expected to increase.” - Mr. Rahul Agarwal

Patel Engineering's Q1 FY26 performance lays a strong foundation for future growth. The company's strategic focus on expanding its order book, maintaining stable margins, and aggressive debt reduction efforts underscore a confident outlook. With a robust project pipeline and clear financial targets, Patel Engineering is well-positioned for sustained profitability and an enhanced balance sheet in the coming years.

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