"45% of All Ongoing Hydropower Projects in India are Ours": Patel Engineering Patel Engineering reported a turnover of INR 4,400 crore in the last fiscal year, with a projected 10 per cent growth for the current year.
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From building India's first RCC dam to innovating micro-tunneling technologies, Patel Engineering has firmly established itself as a leader in civil infrastructure. Kavita Shirvaikar, managing director of the company, recently shared insights into the company's operations, achievements, and vision for the future.
Patel Engineering has been at the forefront of the Indian infrastructure sector with transformative projects for over 75 years, specializing in hydropower, irrigation, tunneling, and civil works. Its portfolio includes major contributions to India's infrastructure. "I'm proud to say that out of all the hydropower constructed in India, 25 per cent has been our contribution," Shirvaikar said, highlighting the company's impact. She further noted, "Currently, 45 per cent of all ongoing hydropower projects in India are ours, representing a massive share of the sector."
With an order book valued at INR 17,000 crore, Patel Engineering continues to thrive. Hydropower constitutes 60 per cent of this, followed by irrigation (21 per cent) and other sectors like tunneling.
As the government emphasizes renewable energy and sustainability, Patel Engineering is actively eyeing pump storage projects. "These projects align with our core expertise, and we see tremendous opportunities," said Shirvaikar. By leveraging its strengths in hydropower, the company aims to make strides in this segment.
Financial growth and outlook
The company's financial performance mirrors its operational success. Patel Engineering reported a turnover of INR 4,400 crore in the last fiscal year, with a projected 10 per cent growth for the current year. Looking further ahead, Shirvaikar shared ambitious targets, "We aim for a 15 per cent year-on-year growth starting in March 2026, reaching INR 7,000-8,000 crore in five years and eventually INR 10,000 crore."
The company has maintained consistent profitability, with EBITDA margins between 14 per cent and 15 per cent over the last three to four years. A selective bidding strategy, focused on high-margin projects in hydropower, underpins this success.
The company has reported a remarkable 95 per cent surge in consolidated net profit after tax, reaching INR 73.44 crore for the quarter ended September 30, 2024. This significant increase can be attributed to higher revenues.
In comparison, the company's net profit after tax from continuing operations stood at INR 37.65 crore during the same period last year. Additionally, Patel Engineering Ltd's total income saw a notable increase, rising to INR 1,230.98 crore in the July-September quarter, up from INR 1,046 crore in the corresponding period of the previous year.
Collaborations and expansion
Patel Engineering has recently partnered with Rail Vikas Nigam Limited and Aecon International, marking a strategic move to bid for high-value projects. These collaborations leverage the unique strengths of all parties, particularly in tunneling and hydropower, to create value-engineered solutions.
Internationally, the company is expanding its footprint in Nepal, where it is executing a hydropower project for SJBNL. A subsidiary, PEL Nirmana, has been established to capitalize on the abundant hydropower opportunities in Nepal.
Digital transformation
Digital transformation is integral to Patel Engineering's operations. The company has implemented SAP systems across all sites, automating processes from site-level accounting to office integration. Shirvaikar detailed innovations like an IoT-based system to monitor diesel consumption across equipment, which optimizes efficiency.
Another is their in-house developed tower-built concreting system, enabling monthly concreting of 50,000 cubic meters. "This value engineering not only enhances output but also reduces costs significantly," she noted.
Challenges in infrastructure development
Operating in remote locations presents logistical and manpower challenges, particularly for hydropower projects. Patel Engineering has tackled these by training local workers and implementing advanced technologies. However, Shirvaikar believes there is scope for more government support, stating, "We feel if we are working in a very remote area, there should be some incentive. It would have been better because whenever we go to remote locations and work in that area, we do a lot of development in the surrounding area. A lot of job opportunities get created, infrastructure develops as well."
Logistics remains a key challenge. "Developing internal roads and ensuring material transport during monsoons is arduous," Shirvaikar said, though she acknowledged improvements due to government initiatives.
India's development vision
Patel Engineering aligns its growth with the Indian government's vision of a $5.5 trillion economy. By reducing debt—down from INR 5,000 crore to INR 2,000 crore—and strengthening its order book, the company is poised for significant growth. Shirvaikar emphasized, "Now is the right time to scale up and contribute meaningfully to the country's development."
Shirvaikar lauded government reforms, such as the GST, improved payment mechanisms, and expedited dispute resolution processes. She specifically highlighted the 'Vivad Se Vishwas' scheme, which allows contractors to settle claims at a defined discount. "This has greatly eased cash flow management for contractors like us," she noted.
Over the last decade, the infrastructure landscape has undergone significant changes. From delayed clearances to undefined dispute mechanisms, challenges once plagued the industry. Shirvaikar remarked, "Unless 90 per cent of land is acquired, projects are not awarded. Environmental clearances are ensured beforehand, and independent engineers mediate disputes. These reforms are game-changers."
The road ahead
As Patel Engineering approaches its centennial milestone, it remains committed to innovation and growth. With its expertise, strategic focus, and alignment with national priorities, the company is well-positioned to continue shaping India's infrastructure landscape.
"Our vision is to contribute not just to infrastructure but to the development of the country. We aim to create value for all stakeholders while aligning with the government's vision for India," Shirvaikar concluded.
For young entrepreneurs in the infrastructure sector, Shirvaikar offers a simple, yet profound advice, "With dedication and commitment, anything can be achieved. Focus on your goals, work hard, and success will follow."
Patel Engineering's journey underscores the pivotal role of infrastructure in national growth, and the company's unwavering dedication ensures its place at the forefront of India's development story.
