Centrum Research recommended accumulate rating on Power Mech Projects with a target price of Rs 1051 in its research report dated June 08, 2018.
Centrum Research's research report on Power Mech Projects
Power Mech Projects Ltd (PMPL) for Q4FY18 on a consolidated basis reported good numbers. Revenue grew 33% YoY to Rs490 crore, aided by 52% growth in the erection segment (45% of Q4FY18 revenue) and 51% growth in civil & others segment (25%). Revenue from operation & maintenance - O&M (27%) witnessed an 8% decline owing to temporary shutdown which impacted revenues by Rs20 crore. EBITDA grew 45% to Rs64 crore, with margins expanding by 111bps to 13.1%, due to lower contract execution expenses (down 707bps to 51.8% of Q4FY18 revenue). Net profit grew 43% to Rs26 crore.
We believe the change in management along with business restructuring could have aided financial performance. Currently, PMPL trades at 10.9x P/E, on FY20E basis. However, given the current quarter performance and anticipation of improvement in financials, we upgrade our rating to Accumulate and value the company at 11x FY20E EPS giving target price of Rs1,051.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.