Why Did Patel Engineering’s Q4 Net Profit Plummet 73%?
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Synopsis
Patel Engineering Limited has faced a dramatic 73% drop in net profit for Q4 FY25, despite a strong revenue surge. This situation raises questions about rising costs and narrowing margins. The company's operational achievements provide a glimmer of hope for the future.
Key Takeaways
- Net profit fell by 73% in Q4 FY25.
- Revenue increased by 20% year-on-year.
- Total expenses rose to Rs 1,498.3 crore.
- EBITDA margin narrowed to 13.5%.
- Strong order book valued at Rs 15,218 crore.
Mumbai, May 13 (NationPress) Patel Engineering Limited announced a significant decline in its net profit for the fourth quarter (Q4) of FY25, despite experiencing robust revenue growth. The surge in costs and shrinking margins exerted pressure on earnings.
The company reported a consolidated net profit of Rs 38.17 crore in Q4, representing a 73 percent decrease from Rs 140.35 crore during the same quarter of the previous fiscal year, as stated in its stock exchange filing.
Revenue, on the other hand, saw a 20 percent year-on-year increase, rising to Rs 1,611.86 crore from Rs 1,343.18 crore, although total expenses also escalated considerably.
The company reported expenses amounting to Rs 1,498.3 crore in Q4, marking a 22.04 percent rise from Rs 1,227.71 crore in the same period last year.
This uptick in costs significantly impacted EBITDA, which fell by 8 percent to Rs 218.34 crore compared to Rs 237.58 crore in the last financial year.
Moreover, the EBITDA margin narrowed sharply to 13.5 percent from 17.7 percent, as per the company's exchange filing.
The disappointing net profit influenced the company's stock, which saw a decrease of Rs 1.68 or 3.77 percent, trading at Rs 42.92 on the National Stock Exchange (NSE) during the intra-day session.
Despite this profit decline, the company emphasized its significant operational achievements for the entire year.
Managing Director Kavita Shirvaikar highlighted that Patel Engineering surpassed Rs 5,000 crore in annual revenue for the first time, demonstrating consistent growth and operational resilience.
She also mentioned a strong order book valued at Rs 15,218 crore as of March 31, with an additional Rs 2,500 crore in L1 orders anticipated to be confirmed.
“Looking ahead, the company remains positive due to the government's ongoing emphasis on renewable energy and infrastructure advancement, especially in hydropower, pumped storage, and tunneling projects—domains where Patel Engineering holds a solid position,” Shirvaikar remarked.
Founded in 1949, Patel Engineering is a 76-year-old company that specializes in heavy civil engineering projects.
Point of View
The significant decline in Patel Engineering's net profit highlights the challenges faced by companies in today's economic climate. While the drop is concerning, the company's commitment to growth and its substantial order book suggest resilience and potential for recovery in the future.
NationPress
25/07/2025
Frequently Asked Questions
What caused the decline in Patel Engineering's net profit?
The decline was primarily due to rising costs and narrowing margins, despite a strong revenue growth of 20%.
How much did Patel Engineering earn in Q4 FY25?
Patel Engineering reported a consolidated net profit of Rs 38.17 crore in Q4 FY25.
What is the company's outlook moving forward?
The company is optimistic about future growth due to the government's focus on renewable energy and infrastructure projects.
