Reliance Securities' research report on Power Mech Projects
Power Mech Projects (PMPL) has delivered a healthy performance in 1QFY18 with its consolidated revenue growing by 10.0% YoY to Rs3.58bn owing to continued strong growth in Civil & Other Works segment. However, revenues from Erection Testing & Commissioning (ETC) segment declined by 17.97% YoY to Rs1.44bn due to slowdown in domestic thermal power capacity addition. We believe that dominant position in power EPC business, impressive order book and superior execution capability will drive PMPL’s profitability, going forward.
Outlook
Hence, we change our recommendation to HOLD with an upwardly revised Target Price of Rs 578 (from Rs 565 earlier) based on multiple of 9x P/E of FY19E.
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