- Our view
- Subscribe
- Market cap then
- ~INR 261.85 Cr.
- Price band
- INR 114 to 120 per share
Patil Automation Ltd designs and manufactures customized automation systems for automotive and other customers. Minerva Capital Research Solutions recommends Subscribe to the IPO, citing its design and manufacturing capabilities, planned capacity expansion and potential to broaden its customer mix beyond automotive.
About Patil Automation
Incorporated in 2015, Patil Automation designs, manufactures, tests and installs customized automation systems, including welding lines, assembly lines, material-handling machinery and special-purpose machinery. Its customers include Auto OEMs, Tier I suppliers to Auto OEMs, and manufacturers of auto components and sub-components. The company’s manufacturing facility spans 109,000 sq. ft. across 2 units in MIDC Chakan, Pune, with installed capacity of 2,304 units. It also has an in-house design team in Baner, Pune.
Patil Automation IPO Details
| Particulars | Details |
|---|---|
| Price Band (INR) | 114 to 120 |
| Face Value (INR) | 10 |
| Implied M.Cap (INR Cr.) | 261.85 |
| Exchange | NSE-SME |
| Minimum Lot Size (Retail | HNI) | 1,200 | 2,400 |
| Issue Opens on | 16-Jun-2025 |
| Issue Closes on | 18-Jun-2025 |
| Listing Date | 23-Jun-2025 |
| No. of shares pre-issue (#) | 1,60,20,000 |
| Fresh Issue of Shares (#) | 58,00,800 |
| Offer for Sale (#) | 0 |
| No. of shares post-issue (#) | 2,18,20,800 |
Funds Mobilized (INR Cr.): Fresh Issue of Shares: 69.61; Offer for Sale: 0.
IPO Reservation: QIB shares offered: <=50%; Retail shares offered: >=35%; NII (HNI) shares offered: >=15%.
- Use of proceeds: The IPO proceeds are allocated to capex for a new manufacturing facility (62.01) and repayment of a portion of borrowings (4.00). General Corporate Purpose is also listed; the amount is shown as [●].
Strengths
- In-house design and testing: The design and development team has 45 employees and uses tools including E-Plan, CATIA V5 and Auto CAD to develop customized solutions. The company also has in-house manufacturing and integrated testing.
- Planned capacity expansion: The proposed expansion is expected to increase installed capacity from 2,304 units to 3,454 units. Management expects the new facility to support revenue growth.
- Experienced promoters: Promoter and MD Mr. Manoj Patil has 25 years of experience, while promoter and CFO Mr. Prafulla Patil has 28 years of experience across strategic decision-making, operations and financial management.
- Diversification potential: Automotive sales were 88.8% of FY25 revenue, while non-automotive sales rose to 11.0%. The company is fulfilling orders for both EV and non-EV automotive segments and is seeking to diversify further into non-auto segments.
- Industry growth outlook cited in the report: The report states that the Indian industrial automation solutions industry is expected to grow at a CAGR of 14.2% from 2024 to 2029, reaching $29.4 Bn. from $15.1 Bn.
Patil Automation Key Financials
| Particulars (INR Cr.) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 78 | 115 | 118 |
| Growth Rate Y-o-Y % | 48% | 2% | |
| Gross Margin % | 43.9% | 43.4% | 47.3% |
| EBITDA % | 6.1% | 10.8% | 12.9% |
| PAT % | 5.1% | 6.6% | 9.6% |
| Debt (Short+Long) | 33 | 23 | 23 |
| Equity | 24 | 32 | 54 |
| Debt/Equity | 1.35x | 0.72x | 0.43x |
| NWC | 12 | 32 | 50 |
| NWC (days) | 57 | 101 | 155 |
| ROE % | 18.94% | 27.81% | 27.28% |
| ROCE % | 12.60% | 24.52% | 21.62% |
| CFO / EBITDA % | 0.3% | 59.7% | 4.1% |
NWC includes Inventory, Receivables & Payables; & NWC days is computed as % of rev.
Revenue rose to 118 in FY25, while year-on-year growth was 2%. EBITDA margin increased to 12.9%, and the debt/equity ratio declined to 0.43x.
Capacity and Customer Mix
Capacity utilization increased from 54.51% in FY23 to 86.94% in FY25. The report gives FY26 (E) total installed capacity after expansion as 3,454 units, with management confident of commencing operations in Sep’25 and revenue contribution during H2-FY26.
In FY25, the company supplied products to over 52 customers across 10 states. Maharashtra accounted for 49.82% of sales, Haryana 19.14%, Karnataka 12.56% and Gujarat 8.83%; exports contributed 0.45%.
| Sales Mix | FY23 INR Cr. | FY23 % | FY24 INR Cr. | FY24 % | FY25 INR Cr. | FY25 % |
|---|---|---|---|---|---|---|
| Automotive | 76 | 97.5% | 113 | 98.3% | 105 | 88.8% |
| Non-Automotive | 2 | 2.5% | 2 | 1.6% | 13 | 11.0% |
| Others / Scrap | 0 | 0.0% | 0.1 | 0.1% | 0.2 | 0.2% |
| Total | 78 | 100.0% | 115 | 100.0% | 118 | 100.0% |
Peer Comparison
The report identifies Affordable Robotics & Automation Ltd. as the listed peer, alongside several unlisted competitors. Its comparison shows Patil Automation with higher FY25 gross, EBITDA and PAT margins, while its NWC days were lower than the listed peer’s.
| Particulars | Affordable Robotics FY25 | Patil Automation FY25 |
|---|---|---|
| Operating Revenues | 163 | 118 |
| Rev. growth rate % (Y-o-Y) | 0% | 2% |
| Gross Margins % | 31.6% | 47.3% |
| EBITDA Margins % | -2.0% | 12.9% |
| PAT Margins % | -7.1% | 9.6% |
| Debt | 56 | 23 |
| D/E | 0.55x | 0.43x |
| CFO / EBITDA % | -ve | 4.1% |
| NWC Days | 212 | 155 |
| PE Ratio | -ve FY25 PAT | 22.4x |
Shareholding
| Particulars | Pre-Issue | Post-Issue |
|---|---|---|
| Promoter & Promoter Group | 94.4% | 69.3% |
| Public & Others | 5.6% | 30.7% |
| Total | 100.00% | 100.00% |
IPO Valuation and Our View
At the price band of INR 114 to 120 per share, the issue is valued at a P/E ratio of 22.4x based on FY25 PAT. Considering the experienced promoters, Auto OEM and Tier I supplier customers, potential customer diversification and planned capacity expansion, Minerva Capital Research Solutions recommends Subscribe. The report does not provide a target price or upside.
- INR 114 to 120 per share
- IPO price band
- 22.4x
- P/E based on FY25 PAT
- Subscribe
- Recommendation
Key Risks
- New facility timing: The report notes that the RHP mentions Feb’26 as the start date, while management is confident of starting the facility by Sep’25. Existing capacity utilization was 86.94% in FY25, and future revenue growth is expected to depend primarily on the new facility.
- Working capital: Receivables increased to INR 50 Cr. as on Mar’25 from INR 18 Cr. as on Mar’24, following order dispatches in Mar’25. The report identifies normalization of elongated working capital as a monitorable.
Our View
The IPO case rests on the company’s operating track record, in-house capabilities and planned capacity expansion, alongside potential diversification beyond automotive customers. The facility start-up and working-capital normalization are key monitorables; the report’s recommendation is Subscribe.
Standard disclosures
- Research Analyst has served as an officer, director or employee of subject company(ies): No
- We or our associates have received compensation from the subject company(ies) in the past 12 months: No
- We or our associates have managed or co-managed public offering of securities for the subject company(ies) in the past12 months: No
- We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company(ies) in the past 12 months –No
- We or our associates may have received compensation or other benefits from the subject company(ies) or third party in connection with the research report –No
- We or our associates or Research Analyst or his/her relative's financial interest in the subject company(ies)- No
- Nature of financial interest in subject company, if any –Nil
- We, our associates or Research Analyst have actual/beneficial ownership of 1% or more securities of the subject company (ies) at the end of the month immediately preceding the date of publication of Research Report – No
- Subject company (ies) may have been client during twelve months preceding the date of distribution of the research report-No.
- We or our Associates or Research Analyst are engaged in market making of subject company – No
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Regulatory disclosures
Minerva Capital Research Solutions is an independent investment advisory firm founded by Nishant Gupta(SEBI registration no. INH000018896).
Registration granted by SEBI and certification from NISM in no way promise or guarantee that the research recommendation will provide any assured, minimum or risk-free return to the investors.
The research report serves as general information and does not account for individual investment goals, financial situations, or needs. Minerva Capital Research Solutions strives to provide reliable and comprehensive information, sourced from what are believed to be trustworthy channels. However, this information has not been independently verified by Minerva Capital Research Solutions or its analysts, and no guarantees are made regarding its accuracy or completeness. The opinions expressed in this report reflect the views of the research analyst at the time of publication and may change over time. Minerva Capital Research Solutions and its affiliates as on date of publication of this report may or may not hold any positions in the securities discussed. The views presented are general and do not consider individual risk tolerance or investment objectives; therefore, readers should seek independent professional advice before making investment decisions. Minerva Capital Research Solutions does not guarantee a favorable outlook for any specific industry or sector and urges investors to consider all relevant risk factors, including their financial circumstances, before investing. The analyst certifies that their views accurately represent their personal opinions on the companies discussed and that no part of their compensation is tied to specific recommendations made in this report. This material should not be interpreted as an offer or solicitation to buy or sell securities in jurisdictions where such offers would be illegal. Consequently, brokerage and investment services described herein are not available to Canadian or U.S. persons. Distribution outside India requires prior written consent. This Research Report assumes that the recipient will assume all risks associated with its contents. If there are any disagreements or dissatisfaction with this report or its disclaimer, the only recourse is to cease using it. Minerva Capital Research Solutions and its affiliates will not be liable for any direct or indirect losses resulting from the use of this report. Recipients are required to adhere to these restrictions. The material is for the personal use of authorized individuals and does not constitute a solicitation or offer to buy or sell any securities in jurisdictions where such actions would be illegal.
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Rating rationale
Minerva Capital Research Solutions endeavors to provide objective opinions and recommendations. Ratings are assigned to stocks according to their fair value vs current market price and then categorizes them as Buy, Hold, Reduce, Sell. The performance horizon is one year unless specified and fair value is defined as analyst’s valuation for a stock.
- Buy:> 15%
- Hold: -5% to 15%
- Reduce: -15% to -5%
- Sell: <-15%