Power Mech Projects Q4 Results Review - Mine Development, Operation To Drive Growth, Margins: Nirmal Bang

Nirmal Bang Report

Power Mech Projects Ltd.'s revenue and Ebitda margin were below our estimates by 25% and 90 bps, respectively.

Order inflow from non-power sectors contributed 86.4% to the total order inflow in Q4 FY24 (versus 11.9% in FY23). The order inflow from the Power sector stood at 13.6% in FY24 (versus 88.1% in FY23).

Government of India's infrastructure spending leads to a rise in project opportunities in sectors such as power plants, railways, and urban infrastructure projects.

We believe that the outlook over the medium term remains robust on the back of healthy order booking and the mind development and operation segment. The company’s margin profile is expected to improve gradually as the share of MDO revenue kicks in (margin accretive business).

We maintain Accumulate to Power Mech with a target price of Rs 5,045, valuing it at 12 times March-26E earnings. We continue to remain structurally positive on the business model over the medium to long term.

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