PAT (Profit After Tax), also called net profit, is what a company keeps after paying all operating costs, interest on debt, depreciation, and income taxes. It is the "bottom line" of the income statement.
PAT = Revenue − COGS − Operating Expenses − Interest − Depreciation − Tax
PAT vs EBITDA
EBITDA strips out interest, tax, depreciation, and amortisation to show operating cash generation. PAT is the all-in accounting profit — what actually accrues to shareholders. A company can have strong EBITDA but low PAT due to high debt interest (leverage) or heavy depreciation on assets.
Why it matters for unlisted shares
PAT growth drives EPS growth, which in turn drives the P/E valuation. When reading an unlisted company's annual report or DRHP, track PAT over 3–5 years: consistent PAT growth of 20%+ CAGR justifies a premium multiple and is the clearest signal of a genuinely improving business.
Example: An unlisted pharma company grew PAT from ₹20 crore to ₹85 crore over 5 years — a 34% CAGR — underpinning its 40× P/E valuation in the secondary market.