IPO Reviews / Patil Automation

Patil Automation Limited

Patil Automation: why FY23 pre-tax profit exceeded EBITDA, and what state revenue shows.

When profit before tax exceeds EBITDA, explain other income first; Patil's FY23 numbers show why investors look there.

Platform
NSE Emerge
Status
Listed 23 June 2025
fresh issue
Rs 69.61 crore

The business in brief

Patil Automation Limited, based at Chakan near Pune, designs, manufactures, tests and installs customised automation systems for industrial clients, mainly in the automotive sector. Its products include welding lines (spot, MIG and TIG), assembly lines, material handling machinery and special-purpose machinery, along with fixtures, robotic cells, testing and inspection systems, and repair, modification and manpower support services. Its clients are mainly automotive OEMs (original equipment manufacturers, meaning the vehicle makers), their Tier I suppliers and component makers. In FY2025, welding lines gave 65.59% of revenue and assembly lines 25.50%. The company was incorporated on 22 July 2015 as a private company and became a public company in 2024. On 31 March 2025 it had 244 permanent and 256 contractual employees.

The promoters are Manoj Pandurang Patil, Aarti Manoj Patil and Prafulla Pandurang Patil. Together with the promoter group, they held 94.38% of the shares before the issue and 69.29% after it, as stated in the prospectus subject to allotment. The issue was a fresh issue of Rs 69.61 crore, with no offer for sale (no existing shareholder sold shares). The objects of the issue (the stated uses of the money) were Rs 62.01 crore for setting up a new manufacturing facility, Rs 4.00 crore for repaying part of certain borrowings, and Rs 0.56 crore for general corporate purposes (money not tied to a named use).

The shares were offered on NSE Emerge, the SME platform of the National Stock Exchange, which gave in-principle approval on 28 March 2025. The issue was open from 16 to 18 June 2025, the prospectus is dated 19 June 2025, and the shares listed on 23 June 2025.

Three years in numbers

Rs crore unless statedFY23FY24FY25
Revenue from operations (Rs crore)77.81115.28118.05
EBITDA (Rs crore)4.5912.4415.22
Other income, total income less revenue (Rs crore)4.553.443.99
Profit before tax (Rs crore)5.4611.2215.18
Profit after tax (Rs crore)4.207.8411.70
Total borrowings (Rs crore)32.6523.1322.93
Factory rent paid to promoters (Rs crore)3.964.164.95
Top 10 customers' share of revenue70.88%79.51%76.67%

Restated figures converted from Rs lakh to Rs crore. Total income, profit after tax, borrowings and the related party rent are from the summary section of the Prospectus dated 19 June 2025 and the Red Herring Prospectus dated 7 June 2025; revenue, EBITDA and profit before tax from the Abridged Prospectus issued with the Red Herring Prospectus. Other income is computed as total income minus revenue from operations. No stub period was presented.

The deeper read

What most readers miss.

  1. 01

    FY23: other income carried pre-tax profit

    In FY23 total income was Rs 82.35 crore against revenue from operations of Rs 77.81 crore, so other income was Rs 4.55 crore. Profit before tax was Rs 5.46 crore, higher than EBITDA of Rs 4.59 crore, which means other income was 83% of pre-tax profit (4.55 divided by 5.46, on our arithmetic); the share fell to 31% in FY24 and 26% in FY25 as the EBITDA margin rose from 5.89% to 12.89%.

    How an investor reads it. When profit before tax is higher than EBITDA, an investor's first question is what the other income is and whether it will continue.

    In your company: show EBITDA without other income in your MIS every month and list each item of other income separately, so the first restated year does not need explaining.

  2. 02

    Debt fell as revenue grew

    Total borrowings went from Rs 32.65 crore in FY23 to Rs 22.93 crore in FY25, down about 30%, while revenue from operations rose about 52%, from Rs 77.81 crore to Rs 118.05 crore. On our arithmetic, the Rs 4.00 crore repayment object is about 17% of FY25 borrowings, and the Rs 62.01 crore facility object is 89% of the fresh issue.

    How an investor reads it. An investor reads the repayment object against total debt to see how much borrowing remains after the issue, and reads the facility object against the plant's timetable.

    In your company: prepare a one-page table of each loan before and after the IPO, with the lender, amount and interest rate, so the effect of the repayment object can be checked line by line.

  3. 03

    Promoters' premises: rent at 32% of EBITDA

    The company paid factory rent of Rs 2.48 crore each to Manoj Pandurang Patil and Aarti Manoj Patil in FY25, Rs 4.95 crore in all, which was 4.2% of revenue and 32.5% of EBITDA (4.95 divided by 15.22, on our arithmetic). The rent was Rs 3.96 crore in FY23 and Rs 4.16 crore in FY24.

    How an investor reads it. An investor reads rent paid to promoters as a fixed cost paid to a related party, and checks the basis of the rent and the length of the lease.

    In your company: get an independent rent valuation for any premises owned by promoters, sign a registered lease on those terms, and record the audit committee approval, because the rent will be shown as a share of revenue and EBITDA.

  4. 04

    State-wise revenue reveals project lumpiness

    Tamil Nadu gave 33.95% of revenue (Rs 39.14 crore) in FY24 and 2.76% (Rs 3.26 crore) in FY25; Himachal Pradesh gave 21.43% in FY23 and 0.52% in FY24. Revenue grew 2.4% from FY24 to FY25 even though Maharashtra rose from Rs 42.12 crore to Rs 58.82 crore, because Tamil Nadu fell by Rs 35.88 crore in the same year.

    How an investor reads it. For a business that builds custom lines against purchase orders, the state table shows how much of each year rests on a few large projects, which the top customer share (14.55% in FY25) alone does not reveal.

    In your company: disclose order book and repeat-order share next to revenue, so an investor can see what replaces this year's largest projects.

Use it in your company

Three things to do before your own filing.

  1. Back the largest object with a project reportRs 62.01 crore of the Rs 69.61 crore fresh issue (89%) went to the new facility, supported by a project report dated 5 June 2025, and general corporate purposes were only Rs 0.56 crore. Commission the project report, with quotations and a building plan, before you fix the objects.
  2. Track bank guarantees as contingent liabilitiesBank guarantees, the only contingent liability in the summary, were Rs 4.24 crore in FY23 (17.5% of net worth) and Rs 2.99 crore in FY25 (5.6%). If customers ask for performance guarantees, keep a register of each guarantee, its expiry and the margin money behind it.
  3. Finish capital changes before the windowThe document records a bonus issue (free shares issued from reserves) in the year before filing. Plan bonus issues and other capital changes early, because restated earnings per share for every year is recalculated on the new share base.

How the document presented it

  • Products described by line typeThe document named each type of system the company builds, from welding lines to special-purpose machines, and gave the revenue share of the main lines.
  • Sector reliance shown year by yearIt gave the automotive share of revenue for each of the three years, so a reader could see it move from 98.30% in FY2024 to 88.84% in FY2025.
  • Expansion tied to a project reportIt linked the largest object, Rs 62.01 crore for a new manufacturing facility, to a project report dated 5 June 2025.

The offer document emphasised the rise in EBITDA margin (earnings before interest, tax, depreciation and amortisation, as a share of revenue) from 5.89% in FY2023 to 12.89% in FY2025, and placed the business in the Indian automation industry using a Dun and Bradstreet report dated 23 December 2024. It set out reliance on the automotive sector, the top 10 customers' share, and work done against purchase orders from premises the company does not own.

Sources: Prospectus dated 19 June 2025 and Red Herring Prospectus dated 7 June 2025, both from the NSE Emerge archives (nsearchives.nseindia.com): company history, shareholding, issue structure, objects, summary of restated financial information (total income, profit after tax, borrowings), summary of related party transactions, contingent liabilities, outstanding litigation and the first risk factors. Abridged Prospectus issued with the Red Herring Prospectus dated 7 June 2025, hosted by the book running lead manager, Seren Capital Private Limited (serencapital.in): revenue from operations, EBITDA, profit before tax, KPIs, revenue split by product, state and sector, and employee numbers. The restated financial statements (cash flow and notes) could not be read for this review. The listing date of 23 June 2025 was located through press reports (Chittorgarh, Business Standard) and should be checked against the NSE listing notice.

This review is general commentary for promoters on how a company's offer document presented its business. It is not a research report, not investment advice and not a recommendation to buy, sell or hold any security. Mansukhbhai Management Services Pvt. Ltd. is not registered with SEBI as a research analyst or investment adviser. Company names are used only to identify the issuer; no connection with, or endorsement by, the company is implied.

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