Patel Engineering Limited (NSE: PATELENG) Q3 2026 Earnings Call dated Feb. 16, 2026
Corporate Participants:
Kavita Shirvaikar — Managing Director
Rahul Agarwal — Chief Financial Officer
Rahul Agarwal — Head Strategy and Finance
Analysts:
Unidentified Participant
Harsh Patel — Analyst
Disha — Analyst
Aashkaa Trivedi — Analyst
Viraj Mahadevia — Analyst
Pritesh Chheda — Analyst
Jay Bharat Trivedi — Analyst
Bijal Shah — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Patel Engineering’s Limited Q3 and 9 months FY26 conference call hosted by Sharena Securities Limited. As a reminder, all participants lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference room to Mr. Harsh Patel from Share India. Thank you. And over to you Mr.
Patel.
Harsh Patel — Analyst
Thank you and good morning everyone. On behalf of Share India Security, I would welcome. I would like to welcome all the participants for Q3FY26 earnings conference call for Patel Engineering Ltd. We are pleased to have with us the management team represented by Managing Director Ms. Kavitas Sirwaikar. Chief Financial Officer Mr. Rahul Agarwal. We will have the opening remarks from the management followed by Q and A session. Thank you and over to you Ma’. Am.
Kavita Shirvaikar — Managing Director
Thank you. Good morning everyone and thank you for joining us for our Q3 and 9 month FY26 earnings call. Our results and investor presentation have been uploaded on the stock exchange and I hope you have had the opportunity to review them. Now let me begin with the industry outlook. The government’s focus on infrastructure remains very strong. The Union Budget 2026 has increased capital expenditure to 12.2 lakh crore, clearly reinforcing its commitment to infrastructure led growth. Hydropower and pump storage continue to be key priorities as India moves toward its 500 gigawatt clean energy target by 2030.
Project approvals have accelerated creating a healthy pipeline of opportunities. A recent example is the Sawalcote hydroelectric project being developed by NHPC Limited with a planned capacity of 1,856 megawatt. Projects of this can reflect the strong momentum in the hydro sector. In addition, enhanced funding support from Power Finance Corporation and Rural Electrification Corporation will improve access to structure and lower cost financing for hydro and transmission projects. Irrigation, river interlinking, Metrorail and tunneling projects are also gaining traction. Overall, the sector environment remains supportive and it aligns well with Patel Engineering’s core strengths. Now speaking about our operational performance, execution continues to remain our biggest strength.
During the quarter we achieved important milestones across multiple complex hydro and underground projects. The Subansari hydropower project in Arunachal Pradesh has made good progress. Unit 2 and 3 were fully commissioned in December 2025 and February 26, adding 500 megawatt of clean energy to the national grid. Work on the remaining units is going smoothly and they should be completed in the next few months. Completion of Sarj Gallery 2 excavation at Kvar crossing 10 lakh cubic meter of concrete pouring at Kiru A key dam milestone Again breakthrough achievement in the 9.2 kilometer headrest tunnel at Parnage Hydropower project Completion of the entire NATM tunneling scope at the PGRW underground water tunnel in Mumbai.
These milestones reinforce our technical depth and execution credibility in challenging hydro and tunneling environments. Now coming to financial Strengthening this quarter was equally significant from a strategic perspective. We signed the MoA for the 144 megawatt Congreg Hydropower Project under a boot model strengthening our long term asset portfolio. We monetized non core assets and realized approximately 185 crore during the quarter. We successfully completed a 400 crore right issue which was subscribed 1.1 times primarily aimed at debt reduction. Our focus remains clear strengthen the balance sheet, reduce leverage and enhance our capacity to bid for larger high quality projects.
Now speaking about order book and growth visibility as of 31st December 2025 our order book stands at 15,123 crore providing strong multi year visibility. We have bids worth approximately 12,000 crore which are under evaluation and expected to open in the coming months. Further, there is an identified pipeline of over 50,000 crores to come up bidding in the next one year. We remain confident of securing around 8,000 to 10,000 crore of new orders in the coming year while maintaining strict marching discipline. Growth for us will remain calibrated, selective and Profitability driven for Q3. FY26 consolidated revenue stood at 1239 crores, EBITDA was 145 crores.
Profit after tax stood at 71 crore for nine months. FY26 revenue increased to 3681 crores which was up 5.7 crores from corresponding previous last year. EBITDA at 469 crore with margin of 12.7%. Profit after tax for the nine month is 223 crore. Margins have moderated slightly compared to the previous period primarily due to project mix and execution phasing. However, we remain focused on maintaining operating discipline and improving efficiency as execution scales up. Now coming to our debt, our total Debt as of 31st December 2025 stands at 1433 crore reduced from 1603 crore in March 2025.
Overall serviceable debt has reduced by 200 crore during the nine months period. Debt to equity stands at 0.33x and finance costs have declined year on year. We remain to we remain committed to continue deleveraging alongside growth. I will now hand over to Rahul for the detailed financial performance.
Rahul Agarwal — Chief Financial Officer
Thank you Kavita and good morning everyone. I will now take you through the company’s performance for the financial quarter ended and nine months ended FY26 on a consolidated basis the revenue for the quarter is 1,239 crore. Operating EBITDA for the quarter is 145 crore, a margin of 11.7%. Profit after tax stands at 71 crore with a margin of 5.69%. On a standalone basis the revenue is 121 crore, operating EBITDA is 139 crore and the profit after tax is 89 crore. Sector wise revenue breakup for Q3 FY26 Hydro is 57%, Irrigation 22%, tunnelling 13%. Roads and others are another 8%.
Book to bill ratio currently stands at 3.08x providing strong revenue visibility. Moving to 9 months. Numbers for the 9 months a consolidated revenue 3681 crores up by 5.74%. Operating EBITDA is 469 crore with a margin of 12.73%. Profit after tax has increased by around 6.5% and stands at 223 crore with a margin of 6.06%. On a standalone basis revenue is 3652 crores an increase of 6.69% year on year. Operating EBITDA is 449 crores with EBITDA of 12.29%. Profit after tax is 223 crore with a margin of 6.09%. Coming to debt the overall debt as of 12-31-2025 is 14.33crore out of which working capital debt is 983 crores and remaining is termed at around 450 crores which is reduced by 170 crores from 1,603 crores as of March 25.
Total debt and contractee advances as of 31-12-25 is 2060 crore as compared to 2267 crores. Hence overall serviceable debt has reduced by 207 crore during the year. In 9 months. Finance cost for the quarter has reduced from 80 crores in the corresponding quarter last year to 68 crore this quarter. Overall debt to equity stands at 0.33 as of 31-12-25. Coming to working capital, our net working capital days is stable at 114 days. That was all on the Q3 FY26 results B from our side we are now happy to take any questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question May Press Star N1 on their Touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Disha from Sapphire Capital. Please go ahead. Hello Ms. Disha. Please proceed with your question.
Disha
Yeah, so I was the order inflow till now for the nine months. Around 3,000 crores. And I think previously we mentioned that we’re expecting 8,000 to 10,000 crores in flow for this year as well. So where has the slowdown been? Exactly. If you could throw some light on that.
Kavita Shirvaikar
So let me tell you. During the year we maintain a disciplined approach to bidding. See in a few last tenders pricing turned very aggressive and not to compromise and margin for this standard. Particularly in technically complex hydro and underground projects, our strategy remains focused on quality fodder 7 in volume gate growth. Importantly, we currently have approximately 12,000 crore worth of goods under revolution and a strong pipeline expected to open in the coming months. Based on current visibility, we remain confident of achieving our annual order inflow target while maintaining margin discipline. So next year. No next one year we expect to around addition of around 8 to 10,000 crore of new orders.
Disha
So for this year for Q4, what sort of order inflow are we expecting?
Kavita Shirvaikar
We cannot exactly tell you. Keep what time new projects will come up for bidding and what time it will get open. But we say another next six months we expect to get around 7 to 8,000 crore also.
Disha
Okay. All right. And what sort of. So I think we’ve done around three. Around around 3700 crores you’ve done so far. So what sort of execution are you seeing for Q4 and what sort of growth are we expecting for FY27?
Kavita Shirvaikar
See revenue as guided earlier, we expect to cross 5,000 crore this year. And however with the new orders of around 3000 crore already received and few more expected in the coming few, we expect FY27 to see around 10% growth in revenue. And considering. Yeah.
Disha
And margins around 13 14%.
Kavita Shirvaikar
Margins around 13%. Correct.
Disha
Okay. And the order blue, the order book mix will be more or less similar to what we have now.
Kavita Shirvaikar
See, I’ll tell you, Let me tell you. Our primary focus continues to be on hydropower and pump storage projects which forms the core of our expertise. India has an estimated hydropower potential of around 133 gigawatts of which only about 50 gigawatt has been harnessed so far, leaving significant untapped opportunities. In addition, the government has outlined an ambitious roadmap of nearly 100 gigawatt of pumped storage capacity by 2035, 36. And we expect substantial bidding activity in this segment over the next 12 years. We also see strong opportunities in irrigation and water resource management, especially river interlinking and canal projects where ordering captivity is picking up selectively.
We’ll continue to participate in tunneling and specialized underground works, particularly where technical complexity creates higher entry barriers. So overall we intend to focus on sectors where we have a strong capabilities and technical depth and the ability to maintain disciplined margins.
Disha
All right. And just a question on the execution. So I think you said, you mentioned that we’re expecting 10% sort of growth but our order book and the type of order wins that we are expecting is quite significant. So why only, why are we only guiding for a 10% growth? Do we see any headwinds in terms of execution?
Rahul Agarwal
So the order inflow when it happens? So because since these are hydro projects are generally five years tenure, so first year it is mobilization. So then the order execution will be low.
Disha
Okay, so then you expect to pick up pace from FY28 onwards. Okay. All right, that is it from my side. Thank you.
operator
Thank you. The next question comes from the line of Ashika Trivedi from Keynote Capitals limited. Please go ahead.
Aashkaa Trivedi
Hello. Am I audible?
Kavita Shirvaikar
Yes, you are.
Aashkaa Trivedi
Good morning and thank you for the opportunity. So my first question would be on the amount of tenders we have submitted till 9 month FY26.
Rahul Agarwal
So right now the tenders which are yet to open is around 12,000.
Aashkaa Trivedi
No, but I am asking for the already the amount of tenders which we have submitted like the bids we have done.
Rahul Agarwal
So bids this year. Last quarter we had said around 30,000 we had bidded. Now 12,000 remains to be bidded which is to be opened and another 50,000 is in pipeline which we have identified to bid in the next one year.
Aashkaa Trivedi
Okay, my second question, sorry if it is being repeated but it is on the order book. So last quarter we guided that we are expecting the total order inflow for this year to be around 8000 crores. And by far we have done about 3500, 3700 odd crore. So are we not expecting to achieve this 8000 crore target this year for the Order inflow.
Rahul Agarwal
See, it is depending as Kavita was explaining. So March we cannot give a cutoff that by March it may happen. It may go few months here and there. But we have 12,000 crores which we have already bidded. And it will open in next one two months. So our success ratio generally around 20%. So we expect something to come from there. Then we had revived our Gogri project. That 1700 crore work that may come up. So considering everything we are still hopeful that we will reach there. But we cannot identify exact timeline.
Aashkaa Trivedi
Okay. Okay. Got it sir. And so last year we also highlighted that we had bidded for a very large project. The value of which was about 15,000 crore plus. And we were expecting the outcome by three to four months. So any update on that order?
Rahul Agarwal
That order is open. We are not L1 on that.
Aashkaa Trivedi
Okay. Okay, got it. And sir, one more question. Would be on the total available land bank with us as on this date. And what will be its approach approximate value in the books?
Rahul Agarwal
The land bank we have still around 800 odd crores. Land bank.
Aashkaa Trivedi
Okay. And it’s approximate value we carry in. The books.
Rahul Agarwal
Around that only.
Aashkaa Trivedi
Okay, got it. And also sir, if you can share with me the total amount of awards and claims as on the date which are like pending.
Rahul Agarwal
We have total awards and claims around 3,000. Around 700 is awarded.
Aashkaa Trivedi
3,000. Okay. 3,000 is pending. Right?
Rahul Agarwal
Right. 3,000 means total including awarded. So 700 is balances under arbitration of various stages of claims.
Aashkaa Trivedi
Okay, got it. And sir, last question was on the right issue. So did the promoters participate in the right issue?
Rahul Agarwal
Promoters participated. They but not fully.
Aashkaa Trivedi
Okay. Okay. Thank you sir. That’s it from my side.
operator
Thank you. The next question comes from the line of Viraj Mahadevia from Money grow asset. Please go ahead.
Viraj Mahadevia
Hi Mr. Shiraikar. Hi Rahul. Couple of questions. What is the net debt post the rights issue. If you can break it up into term, loan, working capital and cash.
Rahul Agarwal
As of current the gross debt is around 400983 is. We have right issue funds unutilized right now. So which is like 200. 200 odd crores. So that money will get utilized.
operator
Sorry to interrupt.
Viraj Mahadevia
Okay. Sorry. Rahul, you said rights issues 200 crores. Rights issue was about 400 crores.
Kavita Shirvaikar
No. So he is saying partly fund has been utilized in balance.
Viraj Mahadevia
So what has it been utilized for the 150 crores already it’s not debt repayment.
Rahul Agarwal
No, no. So it is utilized. So partly it is utilized for debt repayment.
Viraj Mahadevia
Okay.
Rahul Agarwal
And so out of the proceeds.
Viraj Mahadevia
Sorry, I’m losing you.
Kavita Shirvaikar
I think there is echo. There is some disturbance.
Rahul Agarwal
Are you able to hear?
Viraj Mahadevia
Yeah. Better.
Viraj Mahadevia
Sure. Okay.
Rahul Agarwal
Yes. So I’m saying the out of the right issue proceeds 100 crores was for general corporate purposes.
operator
It was from that utilization. Who was asking the question now? I told him to keep yourself on mute.
Rahul Agarwal
Okay. Okay. Yeah. So 100 crores was for general corporate purpose. And the balance was for debt. So that is why right now unutilized funds remains around 250 odd crores.
Viraj Mahadevia
Right. And are we looking to now repay the 250 for the term loan by March. And work towards a term loan free balance sheet.
Rahul Agarwal
Yeah. So we will utilize it something before.
Viraj Mahadevia
Understood. You have some exceptional item in your this quarter’s results related to I think the new labor codes. Is that one time. Is it going to be recurring of this amount every year? Can you guide us?
Rahul Agarwal
No, no. It is one time.
Viraj Mahadevia
Secondly, you have a tax of 65 crores of earlier years. Can you explain that a right back.
Rahul Agarwal
So there were some assessments completed. Assessment completed. Because of it.
operator
Mr. Viraj is on mute. Please. Whenever management is ask answering your question. Keep your lines on mute. There is an echo from your end.
Rahul Agarwal
Yeah. So there was a completion of earlier assessment. Because of which there has been a reversal.
Viraj Mahadevia
Understood. Your cost of materials has gone up meaningfully in your reported results. From 16% in same period 24 to 19% in September 25 now to 26%. Can you explain to us what is happening? Because that’s compressing your margins meaningfully.
Rahul Agarwal
It is just change in mix of what works we are executing. So if you see the corresponding cost of construction is also going down as a percentage.
Viraj Mahadevia
Okay. And can you update us on the Debang project? Did we lose that project as I heard it on another etc call?
Rahul Agarwal
Yeah. So we were not that project. That project, you know, it has been bidded by someone else. And at a very aggressive bidding. So we will probably not take that position.
Kavita Shirvaikar
Our strategy remains focused on quality for quality of orders. Rather than volume rate growth. See, we do not want take risk. You know where the complex and long tenure projects difficult projects.
Viraj Mahadevia
Understood. So how much? The confirmed order book today is 15,000 crores. We’ve got outstanding bids placed already of commerce. 12,000. And we are bidding for another. Another 15,000.
Kavita Shirvaikar
In next six months. You know, another 50,000.
operator
Mr. Viraj, please keep your lines on mute. Which is creating a lot of disturbance. Whenever the management is answering your question there is an echo from your end.
Viraj Mahadevia
Okay, I’ll Come back. Thank you.
Kavita Shirvaikar
Thank you.
operator
Thank you very much. The next question comes from the line of Pritesh from Lucky Investment. Please go ahead.
Pritesh Chheda
Yes, in the nine months how much is the total orders issued in the system? And what was your market share at this 3,000 crore of inflow that you have.
Rahul Agarwal
For nine months? We got orders of around 3,200 or.
Pritesh Chheda
That I know what’s your market share?
Rahul Agarwal
So in the nine months it is actually difficult to say market share because there was one single large project but around 10%.
Pritesh Chheda
What was, which was this and what was the size of this project?
Rahul Agarwal
So this project size was around 16,000 odd crores.
Pritesh Chheda
Okay. And can you name the project please?
Rahul Agarwal
It is Debunk Debang project that damn works.
Pritesh Chheda
Okay. We had bid for it or we have not been so we had bid for it. Okay. The other question is with respect to these, you know, last 12 months announcements by various agencies on trying to explore the hydro potential in northeast and around the Indus and then passing of the Brahmap I think the cast. So considering all this, when do you see eligible materialization of order employee guests around these main areas? Because these are the main potential, the tangible order final for rn. Does it materialize?
Rahul Agarwal
Yeah, next one two years.
Kavita Shirvaikar
Your voice is breaking.
operator
There is a lot of background noise from your end. We cannot hear your question properly.
Pritesh Chheda
Is it okay now?
Rahul Agarwal
Yeah, much better.
Pritesh Chheda
I’m just saying based on the RV RFQ or the big documents for some of these projects out for which you’re saying one to two year, you see a situation where order inflows materialized or they are yet to be out.
Rahul Agarwal
No, no, they are. Lot of them are out like project like Savalcoat, you know Then So there are various projects for which the RFQs are already out and there are few projects internal and all where the RFQs are expected to come out. That’s why we are saying 12 years.
Pritesh Chheda
Some of these projects have finished. The environmental clearances, approvals, Etc ministry regulatory requirements, environmental requirements, everything is done with it, right?
Rahul Agarwal
Yes.
Pritesh Chheda
Financial closures of those projects.
Rahul Agarwal
Yeah. So see all these projects basically are coming from clients like nhpc, SGBNL and all it’s Anavaratna company so there should not be a problem of financial closure.
Pritesh Chheda
But the other pre financial closure requirements of the project in terms of environmental etc, all those things are done with or they are in the process no more.
Rahul Agarwal
So some projects is already done like Saval Court and all. That’s why they are coming up for bidding. And there are some projects like eternal and all which is still going on. So that is why we are saying all these projects will come up for bidding in next one, two years.
Pritesh Chheda
So how many worth projects is where the basic elementary clearances are done with and they are ready for bid. So they are ready for bid. And yeah, currently. Currently, yeah.
Kavita Shirvaikar
So currently Saval Court and Kamala got the CEC clearance and RFP is out and which is ready for the bidding in near future. REST is under pipeline, we are saying.
Pritesh Chheda
Can you quantify these two projects please?
Kavita Shirvaikar
This project’s value will be around 10 to 20,000 crore.
Pritesh Chheda
We can say it’s a wide number. 10 to 20. What is the total project size and the project?
Rahul Agarwal
There are a couple of packages.
Kavita Shirvaikar
Yeah, yeah. So one package is announced. The second package, another one more package will be announced shortly. And Kamla also only one package is announced. Rest is under pipeline. That’s why we are saying around 12, around 8,000 is already announced. Balance 10,000 will come up, will be announced in very shortly. So we are saying 10 to 20,000. That’s why I think 10,000.
Pritesh Chheda
So whatever is announced for which the bid has been, they’ll call for a bid. Right?
Rahul Agarwal
Immediately.
Kavita Shirvaikar
Correct. In next one month also.
Pritesh Chheda
Okay. And if you just take this discussion little bit ahead and in the next 12 months how many more projects do you see where they pass the elementary clearances requirement and enter a big stage.
Kavita Shirvaikar
So another two, three projects are in advanced stage. We say Italian is 3,000 megawatt, around 30,000 crore itself. So that’s why we are saying 50,000, 20,000 near future and another 30,000 in next one.
Rahul Agarwal
And there are various small projects also. PST projects also.
Kavita Shirvaikar
Yeah, even tattoo project.
Rahul Agarwal
So projects. There are projects, states like Bhutan, countries like Bhutan, Nepal, everywhere. So you know, all combined we are clearly saying that 50,000 crores worth of projects should come up during next 6, 8 months.
operator
Mr. Pritesh, you may rejoin the queue for the follow up questions. The next question comes from the line of Nirman from Unique pms. Please go ahead.
Unidentified Participant
Yeah, you mentioned on a call about some pricing pressure in some of these projects. Can you explain why is there pricing pressure? There was supposed to be a lot of projects in the Python, right?
Rahul Agarwal
Sorry, can you repeat the question please?
Unidentified Participant
You mentioned about pricing pressure on these large projects. So earlier you were mentioning that there were a lot of projects and there would be.
operator
Can you, can you speak loudly? We cannot hear you clearly. Your question is not loud and clear to us. Please speak loudly.
Unidentified Participant
Hello.
Rahul Agarwal
Better.
Unidentified Participant
Am I audible now? Yeah, so I was mentioning about the. You the pricing pressure that you mentioned. A lot of products in the pipeline for everyone. Right? So can you explain this pricing pressure bit?
Rahul Agarwal
So basically see there is one this project where you know a private company, not a listed company have bidded and where the bid was done at a very aggressive price. And that’s why we didn’t get that project.
Kavita Shirvaikar
There are other projects in pipeline. Many other projects are in pipeline.
Unidentified Participant
And you don’t expect. If you expect 10,000 crores of orders.
Rahul Agarwal
That to happen in all the projects.
Kavita Shirvaikar
Correct.
Unidentified Participant
Okay. Secondly on this are you comfortable now owning an asset on the second, you know, because we had problems in such a model in the past.
Rahul Agarwal
So Gongri project is, you know one project where everything is completed. And that is why government wanted to revive the project. And based on discussions with the government we revived that project.
Kavita Shirvaikar
And considering our strong balance sheet, right now we are into. We feel Gan Gongri is a good project. After completing the project we expect to get the revenue of around 300 crores per annum. So which will be sizable and will enhance company balance sheet further. So that’s why you know we chose to do this work.
Rahul Agarwal
Okay. All right. Lastly on the non code realization. So we mentioned the number for this.
operator
Your voice is breaking whenever you are speaking. There was a lot of disturbance. We cannot hear your question properly.
Unidentified Participant
On the non core asset realization you mentioned a number for this quarter. Can you repeat that number?
Kavita Shirvaikar
So this quarter around 140. This quarter overall this nine months we have achieved around 185 crores out of sale of non core assets and realization of claim.
Unidentified Participant
How much do we expect for the next one years?
Rahul Agarwal
Next one year another 100. 150. 200 crores.
Kavita Shirvaikar
So this year our target was 150 to 200 crore. So we achieved 185 crore so far. Next year also we expect to continue the same.
Unidentified Participant
Okay. All right.
Kavita Shirvaikar
Thank you.
operator
Thank you very much. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of J. Bharat Trivedi from Incred amc. Please go ahead.
Jay Bharat Trivedi
Hello. Good morning. Am I audible?
operator
Yes, you are.
Jay Bharat Trivedi
Just wanted to ask on the extraordinary one time exceptional on the real estate Viva Vishwas that you have mentioned. So how much of such adjustments do we see coming in coming quarter or next? One year maybe?
Rahul Agarwal
No, no. It is. It is one time only. We don’t expect so Devaste Vishwas. It was completed last year. This year one of the clients in Himachal Pradesh they came up with this policy that’s why we did with them also. So we don’t see this coming up again.
Jay Bharat Trivedi
Okay, but even. But this was supposed to be in the real estate division.
Rahul Agarwal
If I’m correct, there are visuals for the client and one is for the real estate division where we have settled with some old customers.
Jay Bharat Trivedi
Okay, so what can you give the split of what, how much of it is for what?
Rahul Agarwal
For the client is around 17 and a half to 18 odd crores and the real estate division was around 12 crores.
Jay Bharat Trivedi
Okay. And second on the tax write backs, at what levels are these assessments going on? Where we have taken right back, are this pit passed orders or itat? How is it.
Rahul Agarwal
So yeah, it is. One is ITAT and one is cit.
Jay Bharat Trivedi
Okay, so we don’t write back before only on the basis of the AO order.
Rahul Agarwal
No, no, no, no.
Jay Bharat Trivedi
Okay. And what would be the difference between our build and the L1 for the debank project?
Rahul Agarwal
I think almost thousand crores.
Jay Bharat Trivedi
So we, for the 15,000 crore project we would have made somewhere around 15,000 and they would be at 14,000. So this is what my understanding is.
Rahul Agarwal
Kind of. Kind of.
Jay Bharat Trivedi
Yeah, okay. Yeah, yeah, that’s it on my end. Thanks.
operator
Thank you very much. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Vigil Shah from RTL Investment. Please go ahead.
Bijal Shah
Yeah, thanks for the opportunity. I hope I’m audible.
Rahul Agarwal
Yes, yes.
Bijal Shah
Yeah. So if I see your margins for last couple of years it has been over 14%. I mean it was around reaching 15% also. And now you are guiding for 13 to 14% when you are saying that outlook is very good and there are a lot of projects and you are driving efficiency also. So what has changed? I mean why the guidance for margin is 13 to 14%. In fact our discussions also you were always saying that you will maintain margin. This is like 100 basis point lower margin which you are writing now.
Rahul Agarwal
So we have been telling about 13, 14. Only what we are saying now is around 13 because when we see that, you know, new projects are coming and as I just explained the last difference in the bids and whatever new projects are coming. So we will have to consider and align, you know, on the margin front.
Bijal Shah
Essentially you are saying that competitive intensity has increased.
Rahul Agarwal
We have seen that in one large project we will comment on that. You know, if some more projects are coming up when they, when they open.
Bijal Shah
Okay. Secondly, last time, I mean the, the Idea was that 26 the growth will be lower because at the beginning of the year you did not have many orders as the last year there was very few orders which were announced. Now it seems to be the same thing this year also. So what makes you confident about 10% growth in the coming year? And I think earlier you were guiding at 15%. Now you have to down to 10%. But is it 10% also is at risk.
Rahul Agarwal
So I’ll tell you. FY25 the order inflow was almost nil. That’s why this year we had given almost a flat target. This year we have already got 3200 new orders and whatever new orders, more will come in next five, six months. So considering that we are giving 10%.
Bijal Shah
Okay, so 10% is still achievable.
Rahul Agarwal
Yeah.
Bijal Shah
Okay. And lastly, I mean on this timelines of order, I mean I understand it’s a government thing and there is really nothing. We can’t have a proper timeline. You can’t guide us for that. But what is your sense in terms of what are the projects which are available and across all the spectrum, entire spectrum of all the things. And you will be bidding over next two years.
Rahul Agarwal
The various sectors are there. So our focus will remain hydro, PSP and all irrigation, tunneling, lot of projects are coming. If you see in budget Metro, you know, rail corridors, they have been announced. So we will be looking for such projects also. So there is a, you know, ample of projects. I mean we can see order inflow, similar size in the next two, three years easily.
Kavita Shirvaikar
Okay.
Bijal Shah
Okay. Thank you and all the best.
operator
Thank you. The next question comes from the line of Jatin from Hunson Investment Private Limited. Please go ahead. Mr. Jatin, please proceed with your question. Mr. Jatin, we will take the next question. The next question comes from the line of Viraj Mahadevia from Money Grow Asset. Please go ahead.
Viraj Mahadevia
Hi, thanks for taking my question. Going forward, will the funds from non core monetization and arbitration be prioritized for term loan repayment?
Rahul Agarwal
Yes.
Viraj Mahadevia
So hopefully we are a net cash company by FY27. Is that your internal projection?
Rahul Agarwal
I mean leaving apart working capital debt.
Viraj Mahadevia
You should be close to neutral. Right. Because if you’ve got 250 crore cash, 450 term loan now and you have a monetization, your loan will be gone. Plus you generate operating cash flows through next year of probably 400 or 500 crores at the very least. Does that tie in with your expectations?
Rahul Agarwal
Yeah, that tie in the expectations. Correct.
Viraj Mahadevia
Okay, great. Thank you. Nothing for myself.
operator
Thank you. The next question comes from the line of Preeti Agarwal from SK Associates. Please go ahead.
Unidentified Participant
Yeah, thank you so much for the opportunity. Could you please elaborate on the construction costs and you know how you see them shaping over the next few quarters.
Rahul Agarwal
Our ebitda is around 13. I mean on an average for the full year. So that we can expect to continue in the next few quarters.
Unidentified Participant
Understood. And like you seem to be diversifying your revenue sources with the bid for excavation projects. So are these projects lower margin compared to the overall margins?
Rahul Agarwal
So see on margins 13% is on a blended basis. So this is one project we have taken in a for excavation. Because we are anyways doing excavation in our hydro and tunneling project. So yeah the margins in this is 100, 150 basis points lower than that. But that is a small project around 800 crore.
Unidentified Participant
Understood. And just wanted your thoughts regarding the Assam Dam project which is on board basis. I think there are some concerns on stress on your balance sheet.
Kavita Shirvaikar
There are no concerns on his correct balance sheet. Because as you also know our debt has reduced and our balance sheet has tended so far. And expecting the future revenue from the project, we have taken this project.
Unidentified Participant
Understood. Thank you so much. That’s it for myself.
operator
Thank you. The next question comes from the line of Sunil Kothari from Unique pms. Please go ahead.
Unidentified Participant
Thank you for opportunity. But ma’ am just broad wanted to understand is like in many other industries also there is an increasing competitive scenario for EPC players. So how we are confident about maintaining our good this respectable 13 14% margin. How you see the scenario. Like you said this big project has been taken over by some private company at a very substantial lower rate. So how to how you will be navigating this situation? Because Patel has so many years of experience. But unfortunately new players are so easily entering those fields. So if you can little elaborate on this situation.
Kavita Shirvaikar
So I tell you see our current order book is 15,000 crore. See we have a legacy of executing complex projects. So we are technically sound. We have experience. Considering this in this challenging. You are rightly said some of them new players are bidding aggressively and we have to navigate this situation. But we have a competitive advantage because we are technically sound. We are more experienced. We have existing equipment base of around 1,200 crore. We have employees based technical expertise, design and engineering team where we can do some engineering and reduce our cost. So this is on our side.
Our experience, our technical expertise and our past legacy. Considering this we are confident that in this difficult situation also we will reach our target.
Unidentified Participant
Okay thanks. And one more question to Mr. Rahul. Letter of offer mentions issue expense is worth 50 crore on a foreign repurchase. Right issue. Right issue happens now digitally. Why so high expense of 50 crore? We are talking about. If you can little detail in explain please.
Rahul Agarwal
So it is because there were consultants appointed. You know the basis considering that around 10% is what we knew that you know it is. Yeah. 10% cost is there. Yeah, yeah. Because 10% cost is there. Generally if you see other right issues also including GST.
Kavita Shirvaikar
So it is on an average 8% plus 20% GST. Totally 10%.
Unidentified Participant
Thank you. Thank you.
operator
Thank you. The next question comes from the line of J from Star Investment. Please go ahead.
Unidentified Participant
Hi sir, I wanted to know if the utilization of the rights issue has already begun and how much has been utilized so far and how much remains to be utilized.
Rahul Agarwal
So we have submitted the utilization report on the exchange out of 400. I think 300 is remains to be utilized.
Unidentified Participant
Okay. And like do you foresee any other fundraise in the coming quarters to finance either the working capital or growth requirements?
Rahul Agarwal
Not immediately. We will evaluate, you know, based on requirement. Like we have taken Gongri project. So funding may be required for that. So we will see.
Unidentified Participant
Okay. And so one last question. Like how do you see the recent budget announcements with respect to the power storage projects? Like do you think it is a major positive for the company and how do you foresee the potential pan out?
Kavita Shirvaikar
Yes, it is positive for the. So it gives us a, you know, huge opportunity going forward to bid for this project because there are large projects coming up for bidding in this sector because government focus is in power and especially PSC and hydropower projects.
Unidentified Participant
Okay, thank you. Daksha from my side.
operator
Thank you. The next question comes from the line of Jay Bharat Trivedi from Incred amc. Please go ahead.
Jay Bharat Trivedi
Hello. Yeah, thanks for the follow up. That wanted to ask are we facing any competition threats from BIP in our PSP orders or are the utilities rethinking on putting up a BAS instead of a psp? Your thoughts there.
Rahul Agarwal
No PSP projects and best projects. There is no competition between them. PSP project. There are some PSP projects which are coming up along with a bez.
Jay Bharat Trivedi
Okay, but. But the PSP tariff rates would lie anywhere between 7 to 8 rupees per unit if I’m maybe 6 to 7 rupees and base is relatively cheaper. So why go for a psp? So that. That was my fundamental question.
Rahul Agarwal
No, no. So see it depends upon the quantum of power also. So best projects, you know it comes generally it comes with solar or A wind where, where the power generated could be low. And when it comes to PSP projects, you know, the projects are long life. And so considering the overall capital cost and all it makes more sense. And sometimes PSP projects is coming as an addition to an existing hydropower project. So all those factors are there.
Jay Bharat Trivedi
Okay. Yeah. And for the next on the coming two, three years, what would be our execution cycle be on? Maybe 30 to 35%. Any number that you can give.
Rahul Agarwal
So I didn’t get you. What is 30 to 35 execution cycle?
Jay Bharat Trivedi
Basically your it is average of the closing and opening order book. What is the revenue?
Rahul Agarwal
Yeah. Understood, understood. So see our book to build ratio is generally between three to four years.
Jay Bharat Trivedi
But to maintain a 10% guidance which you have given the order inflow for FY20 assuming we are doing 6,500 crores for FY26, broadly your FY27 and 28 numbers have to be more than 10,000 to deliver that growth.
Rahul Agarwal
See this year we are expecting around 5,000. So next year around.
Jay Bharat Trivedi
Okay. Okay, cool. Yeah, that’s a command. Thanks. All the best.
Rahul Agarwal
Thank you.
operator
Thank you. The next question comes from the line of Vishal Sara from VVS Securities. Please go ahead.
Unidentified Participant
Hi sir, can you just help us understand what is the business model or the revenue model for the Gomri hydroelectric project which is a bot project.
Kavita Shirvaikar
Yeah, it is beauty.
Rahul Agarwal
It is a beauty project. So four years of construction and then there will be a sale of power. So around here 40 years. Yeah, 40 years project will be there. So revenue in the first year is expected around 300 crores after completion.
Unidentified Participant
So, so what with the EPC value here and, and the second point is, do we need to then enter into PPAs with utilities and how will the tariff be determined? Can you help us understand that there.
Rahul Agarwal
Will be a PPA entered to be entered EPC value? Right now the. The final numbers are being bugged out. So that’s why we don’t have the exact EPC value right now. And there will be a PPA entered. The PPA can be a fixed price or a costless ppa. That will depend upon you know what agreement we are entering into with the discoms of the government?
Unidentified Participant
No. So here, you know, because we effectively end up owning this project for say such a long time. So do we have an understanding from the state government that will be assured some return like NHPC gets in a lot of its nominated projects or have we assured them any base tariff rate for. For the period of project?
Kavita Shirvaikar
So we are trying cost plus CPA model.
Rahul Agarwal
Yeah.
Kavita Shirvaikar
Our cost gets covered and we get reasonable marginal.
Rahul Agarwal
Correct. And see for the state there is a fixed policy of giving a 12% free power.
Unidentified Participant
Sorry, 12% free power to the state. Okay. Okay. And thank you. And on the urban infra project for the seclusion. So there is the tariff fixed on say per 10 basis or how does the revenue model work in this project?
Rahul Agarwal
So revenue model is based on the lead of the kilometers.
Unidentified Participant
Okay.
Rahul Agarwal
To excavate and you know transport.
Kavita Shirvaikar
So for us it is excavation and transport. Coal. Secl will be selling the coal.
Unidentified Participant
Understood that?
Kavita Shirvaikar
Yeah.
Unidentified Participant
Okay. So. So we will have a fixed say freight here is it?
Rahul Agarwal
There will be a fixed rate per cubic meter per km.
Unidentified Participant
Okay sir. And the number is disclosed or can you share that number?
Rahul Agarwal
I don’t have it right now with me.
Unidentified Participant
Okay sir. Fine. Thank you very much.
operator
Thank you. The next question comes from the line of Viraj Mahadevia from Money grow asset. Please go ahead.
Viraj Mahadevia
Thank you for taking my follow up. Two quick questions. What is the CapEx plan for the next one or two years or do we have all the equipments in place to execute the current order book?
Rahul Agarwal
Yeah. 100. 150 crore capex will be required for all the current coming up EPC projects.
Viraj Mahadevia
Oh. Would it be 70, 50 to 70 per year?
Rahul Agarwal
Sorry, this is my. For the next year.
Viraj Mahadevia
So 100 to 150 for FY27 and then nothing for 2828.
Rahul Agarwal
He will depend upon what projects we get next year. Then we’ll have to.
Viraj Mahadevia
Understood. My second question is. Yeah. Have there been any cost optimization initiatives that you all have pursued as a company either through AI or any of these pilot projects that you’ve done which have yielded encouraging results that you’re looking to now roll out on a wider.
Rahul Agarwal
Basis for savings we have worked out on various things like implementation of IoT etc. And at various projects and saving on diesel consumption costs and running efficiency of the equipment. So we have done on a pilot basis for a couple of projects and we intend to implement it at all projects across.
Viraj Mahadevia
And how much savings could that yield in FY27 on an annual basis for the company?
Rahul Agarwal
Difficult to put a number on that but even a range see maybe a half a percent.
Viraj Mahadevia
Half a percent of revenues.
Rahul Agarwal
Yeah.
Viraj Mahadevia
Thank you.
operator
Thank you. The next question comes from the line of Abhijit Ture from six senses. Please go ahead. Mr. Abhijit. Please proceed with your question. Mr. Abhijit.
Unidentified Participant
Can you hear me?
operator
Yes we can. Please proceed with your question.
Unidentified Participant
My question is on that 50 crore rupees expenses that you have booked onto the rights issue. That seems to be really very high number because IPOs happen at 2 and a half percent 3% fees. 10% rights issue fees is unheard of. Do you want to give a detail how that 10 crore plus GST number has come in?
Rahul Agarwal
So we have appointed consultants, we have done road shows etc. So basis that the cost was there.
Unidentified Participant
The cost is absolutely high. I am telling you I have some background of investment banking and that’s why I’m telling you right session generally happens between 50. You have charge here 10%. That’s the investors money.
Rahul Agarwal
Yeah. So this is what is there as for the offer document investment banking. Yeah. I think earlier also we had similar cost.
Unidentified Participant
That’s. That’s absolutely absurd. I can tell you and on this forum I’m registering this. I am your investor and that’s. This is my money because I have put in my money into your right issue. You can go ahead check onto the SEBI at what cost rights issue happen?
Rahul Agarwal
Yeah, only what we want to just put it on record here is that it was already disclosed in the offer document.
Unidentified Participant
Which is. Which is. Which is what I am saying that error of commission.
operator
Mr. Abhijit, you may rejoin the queue for the follow up question. There are participants. The next question comes from the line of Jatin from Hunson Investment Private Limited. Please go ahead. Mr. Can you hear me? Yes.
Unidentified Participant
Can you hear me?
operator
We can hear you.
Unidentified Participant
Yeah. Thank you for the opportunity. This is more regarding the rights issue again. So I see a company has gone to rights issue three times in six years. So is it a kind of the financial discharge or anything? It’s a normal. And is there any plan again in future to go again rights issue?
Rahul Agarwal
No, there is no plan for doing a rights issue again.
Unidentified Participant
Okay, thank you. Because for last six years there have been three times. Right. And also just wanted to ask you one more thing. So this is about the shares pledge. So promoters I know they almost 90% they pledged. Is it an individual purpose or is there anything the purpose of company involved in that share stage?
Rahul Agarwal
So the pledge was done by promoters for the company as well as borrowings done by the promoters on the individual level to put in funds in the company in the past. And we are expecting the pledges to start coming down in the near future.
Unidentified Participant
Okay. Any. Any timeline for that share screen share.
Rahul Agarwal
Timeline wise post this March results. We are start talking to the you know the lenders.
Unidentified Participant
Okay. Thank you. Thank you sir. That’s all.
operator
Thank you. Ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to management for closing remarks.
Kavita Shirvaikar
Thank you. To conclude, we are seeing strong sector tailwind, particularly in hydropower and underground infrastructure. We are well positioned to capitalize on these opportunities. Our focus remains clear. Disciplined execution, steady deleveraging and margin LED growth. With a strong order book, improving balance sheet and healthy bidding pipeline, we are confident about the next phase of sustainable and profitable growth. Thank you.
operator
Thank you. On behalf of Patel Engineering Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect. Connect your lines.