Stock Rockets 5 per cent After Adani Power’s Huge Rs 294 Crore Deal!

Stock Surges Following Adani Power’s Major Rs 294 Crore Order Announcement

Power Mech Projects has secured a Rs 294 Crore order from Adani Power Limited (APL) for overhauling services, condition assessment, and the erection, testing, commissioning, and manpower assistance for the Performance Guarantee Test of Steam Generator (SG) and Steam Turbine Generator (STG) for Units 3 and 4 of the 2x660 MW Korba Phase-II Thermal Power Project. The order excludes GST, with an additional incentive of Rs 1.25 crore per unit for synchronization within the stipulated time.

Order Details

The contract involves providing comprehensive services for overhauling, condition assessment, erection, testing, and commissioning, along with manpower assistance for the Performance Guarantee Test of SG and STG for the Korba project. The completion timeline for Unit-3 is 12 months, while Unit-4 will be completed in 18 months. This order is a domestic contract with no related party transactions involved.

Strong Order Book and Revenue Guidance

Power Mech Projects is targeting an order intake of Rs 12,000 crores for FY25 across sectors such as power, non-power, civil infrastructure, and water. As of September 30, 2024, the company has secured Rs 3,100 crores in orders, raising its total order backlog to over Rs 58,000 crores. Management anticipates a revenue growth of 25 per cent-30 per cent for FY25, supported by the strong order book and favorable historical conversion rates.

Q2 FY25 Financial Performance

For Q2 FY25, Power Mech Projects reported a total income of Rs 1,035 crores, marking a 12 per cent YoY increase. EBITDA grew by 13 per cent to Rs 134 crores, and PAT rose by 31 per cent to Rs 67 crores. The EBITDA margin improved slightly from 12.57 per cent in Q2 FY24 to 12.78 per cent in Q2 FY25.

Mining Operations and Progress

The company has made significant strides in its Mining Development and Operations (MDO) projects. Production from the Tasra mines is set to begin in early 2025, and the Kotre Basantpur mine’s capacity is expected to expand, with a revenue target of Rs 300-310 crores for FY26.

Strategic Focus and Challenges

Power Mech Projects is focusing on enhancing capabilities in civil works and engineering procurement. Despite challenges like delays in certification and receivables, especially in the water division, the company remains optimistic about future opportunities in green hydrogen and infrastructure development.

Stock Performance

At 1 PM on Wednesday, Power Mech Projects' stock is trading at Rs 2,648 (+3.09 per cent). Following the announcement of the order, the stock saw a rise of 5 per cent. In the past year, the stock has delivered a return of 18.67 per cent, and in the last week, it has increased by 4.07 per cent.

Disclaimer: The article is for informational purposes only and not investment advice.