Patel Engineering Limited Intrinsic Value
PATELENG · Construction · Current price ₹24.82
Is Patel Engineering Limited undervalued?
We estimate the fair value of Patel Engineering Limited at ₹37 per share, against a market price of ₹27. That puts the share price about +39.0% below our estimate, at low confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 2 methods: Discounted cash flow (2-stage) (₹32), Fair multiple (P/E) (₹67). Each is weighted by how well its inputs held up for this company. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for Patel Engineering Limited spans ₹32 to ₹40. That range is wide, which is the honest signal here: read the range rather than the single number. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
Margin of safety
Value investors look for a margin of safety: a discount to estimated value that absorbs being wrong. At ₹27 against an estimated value of ₹37, Patel Engineering Limited trades at +39.0%, i.e. a discount to our estimate. How much margin to demand depends on how much you trust the inputs, which is what the confidence band below is for.
How we got this fair value
Every number below is part of the same estimate for Patel Engineering Limited. Nothing here is a target price or a forecast of where the share price will go.
The inputs are thin or the models disagree sharply. This is our least reliable kind of estimate, so read the range rather than the single number.
Estimate range ₹32 – ₹40
Why this method for this business
The construction industry is capital-intensive and cyclically sensitive, making DCF and EV/EBITDA the most appropriate models. Relative PE is used to benchmark against peers.
The models behind the number
Each method is weighted by how well its inputs held up for this company.
Intrinsic value from 2-stage discounted cash flows (primary for asset-light / normal businesses); FCFE path
required inputs missing
- Discounted cash flow (2-stage) is the primary model due to its alignment with capital-intensive projects and long-term cash flow generation. EV/EBITDA is included for its relevance to capital-heavy businesses. Relative PE is used for peer comparison.
What was missing
- Lack of detailed project-specific cash flow data
- Limited analyst coverage for precise valuation
What drives it
27 inputs, grouped by how strong each claim is
- FCF_0 (normalized)
- 284 ₹cr
- Net debt
- 1,055.3 ₹cr
- Sector-median P/E
- 20.96×
- Peers used
- 35
- EPS (TTM)
- 2.83 ₹/share
- Own-history median P/E
- 16.73×
fcf_norm (median ≤5y positive)
total_debt − cash
peer-median
peer-median
computed
reconstructed (one feature, dampened — not a cap)
- Discount rate (r)
- 14.4%
- Beta
- 1
COE (building-block)
bottom-up industry
- Stage-1 start growth
- 4.94%
- Fade shape
- linear
- Terminal growth (g)
- 4.94%
- Stage-1 years
- 10 y
pat_cagr_5y
lifecycle Growth
macro terminal × quality premium
lifecycle Growth horizon
- Lifecycle stage
- Growth
- Quality premium
- 0.988×
- Term: quality
- -6.6%
- Term: growth
- +3.7%
- Term: capital_allocation
- +13.6%
- Term: financial_strength
- +7.6%
- Term: history
- -6.0%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
forecast engine (L20)
moat None + capital allocation
quality 42/100 (weak/erratic returns) → discount
durable ~12% CAGR (ROCE 11% < 12% hurdle (growth not value-accretive)) → premium
capital allocation: rising ROCE funded by strong FCF → premium
financial strength: low leverage (D/E 0.3) → mild premium
history: market paid -20% vs sector, dampened ×0.3 (one feature, not the anchor)
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
- Path
- FCFE
- Terminal-value fraction
- 0.422
- Premium vs sector
- +12.7%
- Fair-multiple confidence
- 76%
- Fair P/E
- 23.62×
computed (D/E vs 0.8)
PV_TV / (PV_1+PV_TV)
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for Patel Engineering Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 15 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on Patel Engineering Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.