Multibagger stock Patel Engineering spikes 6% after Q3 numbers, up over 200% in 2 years

Shares of Patel Engineering, a leading infrastructure and construction company, surged 6% in intraday trade on February 13 to ₹48.51 apiece following the release of its December quarter performance.

For Q3 FY25, Patel Engineering’s consolidated revenue from operations stood at ₹1,205.5 crore, up 13.62% year-on-year (YoY) from ₹1,061 crore in Q3 FY24. The company’s consolidated operating EBITDA increased by 29.50% to ₹184 crore, compared to ₹142.1 crore in the previous year.

Consequently, the operating EBITDA margin improved to 15.26% from 13.39% in Q3 FY24, while the net profit for Q3 FY25 rose to ₹80.4 crore from ₹70.2 crore a year ago. Additionally, the company successfully reduced its interest costs by ₹8.75 crore in the quarter.

As of December 31, 2024, Patel Engineering’s consolidated gross debt stood at ₹1,422.4 crore, down from ₹1,885.5 crore as of March 31, 2024, reflecting significant deleveraging efforts.

The company’s order book at the end of Q3 FY25 stood at ₹16,396.4 crore, with 63% of the projects belonging to the hydroelectric segment. The company currently holds 15 hydroelectric projects worth ₹10,428.3 crore, with key ventures including Subansiri HEP (2,000 MW), Dibang Multipurpose Project (2,880 MW), Kiru HEP (624 MW), Arun-III HE Project (900 MW), Shongtong HEP (450 MW), and Kwar HEP (540 MW), as per the company’s Q3 earnings filing.  

Looking ahead, the company is well-positioned to capitalise on India’s expanding infrastructure sector, supported by an ₹11.21 lakh crore budget allocation in the Union Budget 2025, accounting for 3.1% of GDP.

The hydroelectric sector offers healthy opportunities, with approximately 18,000 MW of hydropower projects currently under execution in India, of which the company is involved in constructing nearly 8,000 MW, its Q3 report showed. With a total installed capacity of 51.74 GW, India has surpassed Japan to become the world’s fifth-largest hydropower producer.

The country’s large hydro capacity has grown from 35.9 GW in March 2008 to 46.9 GW by August 2024, while small hydro capacity has expanded nearly fourfold to around 5.1 GW.

Meanwhile, the Government of India and the Arunachal Pradesh state government have collaborated to revive and execute 12 hydroelectric power projects with a combined capacity of 11,517 MW. This initiative aligns with India’s commitment to its Nationally Determined Contribution (NDC) target of achieving 500 GW of total energy capacity by 2030.

Stock down 30% in a year, but still up 218% in 2 years

Several high-flying small-cap stocks have come under selling pressure in recent months, erasing their impressive gains, with Patel Engineering being one such stock, declining 30% over the past year.

Despite such a steep fall, the stock remains up by 218% over the last two years. After experiencing persistent selling pressure from January 2022 to February 2023, which led to a 50% decline, the stock reversed its trajectory in the following months and sustained its upward momentum over the next 12 months.

Moreover, from its March 2020 low of ₹7.10 per share, the stock is currently trading with a 583% gain.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.