Patel Engineering Limited debt rose to Rs 1,312.1 crore

Patel Engineering Limited reported total debt of Rs 1,312.1 crore in H1 FY27, up Rs 125.1 crore from FY26 as working-capital debt increased by Rs 115.4 crore. PEL’s term debt was Rs 349.8 crore, remaining Rs 251.2 crore below FY25, while net working-capital days rose to 136 from 120 at FY26.

How did PEL’s debt change in H1 FY27?

PEL’s total debt increased 10.5% to Rs 1,312.1 crore in H1 FY27 from Rs 1,187 crore at FY26, but remained Rs 290.4 crore below the Rs 1,602.5 crore reported at FY25. The H1 FY27 increase followed a decline in total debt during FY26, leaving the company below its FY25 debt level despite the half-year reversal.

PEL’s H1 FY27 movement was led by working-capital debt, which rose Rs 115.4 crore from FY26 to Rs 962.3 crore. Term debt increased by Rs 9.7 crore to Rs 349.8 crore, meaning working-capital debt accounted for most of the Rs 125.1 crore increase in total debt over the period.

Why did PEL’s debt increase in H1 FY27?

PEL’s presentation identifies working-capital debt as the main category behind the H1 FY27 increase, with the balance rising 13.6% from FY26. It does not disclose a project-specific payment, collection, financing transaction or other operational event that explains the Rs 115.4 crore increase, so the source supports the debt-mix change rather than a specific cause.

The consolidated balance sheet shows current borrowings rose to Rs 1,124.8 crore in H1 FY27 from Rs 930.6 crore at FY26, an increase of Rs 194.2 crore. Non-current borrowings fell by Rs 68.9 crore to Rs 187.4 crore over the same interval; these balance-sheet classifications are not reconciled in the presentation to its working-capital and term-debt categories.

How much have PEL’s long-term borrowings fallen?

PEL’s non-current borrowings stood at Rs 187.4 crore in H1 FY27, down Rs 201 crore from Rs 388.4 crore at FY25 and Rs 68.9 crore from Rs 256.3 crore at FY26. This balance-sheet measure shows that borrowings classified as non-current were lower across both comparison periods.

PEL’s term debt, a separate presentation measure, fell Rs 251.2 crore from Rs 601 crore in FY25 to Rs 349.8 crore in H1 FY27. However, term debt was Rs 9.7 crore above the FY26 level of Rs 340.1 crore. Management described the debt mix as improving through lower long-term borrowings and said this enhances financial flexibility, while disclosing no numerical term-debt target.

What happened to PEL’s working-capital days?

PEL’s net working-capital days increased to 136 in H1 FY27 from 120 in FY26 and 105 in FY25. The 16-day increase from FY26 coincided with working-capital debt rising to Rs 962.3 crore, but the presentation does not state that the change in working-capital days caused the additional borrowing.

Adjusted net working-capital days increased to 125 in H1 FY27 from 106 in FY26 and 110 in FY25. PEL defines this adjusted measure as excluding borrowings, arbitration claims, current investments, cash and bank balances, and stock of land. The adjusted measure was 11 days below reported net working capital in H1 FY27, but was still 19 days above FY26.

How do advances and operating results affect PEL’s balance sheet?

PEL’s total debt plus contractee advances was Rs 1,921.2 crore in H1 FY27, up Rs 112 crore from Rs 1,809.2 crore at FY26. Contractee advances declined by Rs 13.1 crore to Rs 609.1 crore, while the combined figure remained Rs 345.8 crore below the Rs 2,267 crore reported at FY25.

H1 FY27 revenue from operations was Rs 2,491.4 crore and operating earnings before interest, tax, depreciation and amortisation, or EBITDA, were Rs 329.9 crore. Finance costs fell 14.3% year on year to Rs 127.8 crore from Rs 149.1 crore in H1 FY26, while profit after tax rose 23.8% to Rs 179.2 crore; the presentation does not establish a direct link between those income-statement movements and debt.

PEL reported debt to equity of 0.28 times in H1 FY27, compared with 0.27 times in FY26 and 0.43 times in FY25. Equity increased by Rs 237.6 crore from FY26 to Rs 4,679.6 crore in H1 FY27, while total debt rose by Rs 125.1 crore, producing the marginal increase in the ratio from FY26.

Conclusion

PEL’s H1 FY27 position was not a uniform deleveraging trend. Total debt rose to Rs 1,312.1 crore as working-capital debt increased and net working-capital days reached 136, while term debt of Rs 349.8 crore and non-current borrowings of Rs 187.4 crore remained materially below their respective FY25 levels.

The next result should show whether working-capital debt and the 136-day net working-capital measure decline or remain elevated. Management’s stated plan is to strengthen the financial profile through balance-sheet improvement and cost-of-capital optimisation, alongside an order book of Rs 13,546.4 crore across 52 ongoing projects in H1 FY27.