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.
Outlook
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
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