Geojit's research report on Power Mech Projects
Power Mech Projects Ltd. is a leading infrastructure construction company based in Hyderabad with a global presence. In Q2FY24, the company posted a 21% YoY revenue growth to Rs.932cr., driven by strong performance in Operations and Maintenance (O&M) and Civil segments. The current orderbook backlog is 14X TTM revenue, with mining orders constituting 74.3% of the total order backlog. The clearance and ground activities have progressed positively in these projects and are expected to start contributing to the revenues from Q4FY24 itself. Order inflows are expected to remain strong as O&M and Civil segments will benefit from ongoing revival of projects in Power and Infrastructure sectors. Improved execution bandwidth and a better margin profile due to Mining and O&M focus will drive the company’s earnings growth.
Outlook
Hence, we value Power Mech at a P/E of 13.5x on FY25E and provide an “ACCUMULATE” rating with a revised target price of Rs.4,750.
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