Power Mech Projects Limited, a prominent player in the power and infrastructure sector, has announced a significant new business win, further solidifying its position in the market. The company has secured a substantial contract worth ₹371.00 crore from Mahan Energen Limited (MEL), a subsidiary of Adani Power Limited.

Contract Details

The contract, valued at ₹370.84 crore (excluding GST and BOCW Cess), involves the execution of civil works and erection of prefabricated structural steel for the Boiler Turbine Generator (BTG) Units 1 and 2 at the Mahan Phase-III project. This project is part of MEL's 2 x 800 MW power plant expansion in Singrauli, Madhya Pradesh.

Scope of Work

The comprehensive scope of work for Power Mech Projects includes:

• Execution of civil works
• Erection of prefabricated structural steel for BTG Units 1 and 2
• Construction of the main powerhouse and central control building
• Installation of Electrostatic Precipitator (ESP) and Flue Gas Desulfurization (FGD) systems
• Development of limestone handling system and switchyard
• Various miscellaneous ancillary works

Project Timeline

The contract stipulates a 30-month execution period from the date of issuance of the Notice to Proceed. This timeframe underscores the project's scale and complexity, highlighting Power Mech Projects' capability to handle large-scale infrastructure developments.

Market Impact

This new order is expected to have a positive impact on Power Mech Projects' order book and future revenue streams. The contract's size demonstrates the company's strong market position and its ability to secure high-value projects in the power sector.

Industry Implications

The contract award from an Adani Power subsidiary signifies ongoing investments in India's power infrastructure. It also highlights the continued expansion of thermal power capacity, even as the country pushes for renewable energy sources, indicating a balanced approach to meet growing energy demands.

Power Mech Projects' involvement in this project showcases its expertise in handling complex power plant constructions and its important role in India's energy infrastructure development.

Power Mech Projects Limited, a leading infrastructure and energy services company, has reported a strong financial performance for the first quarter, with significant growth in revenue and profitability.

Financial Highlights

The company reported a total income of INR 1,304.00 crores for Q1, representing a 28% increase from INR 1,016.00 crores in the same quarter of the previous year. EBITDA grew by 48% to INR 182.00 crores, while Profit After Tax (PAT) increased by 31% to INR 81.00 crores. The EBITDA margin improved from 12.10% to 13.95%.

Exceptional Income Boosts Performance

The quarterly performance was significantly boosted by exceptional revenues of INR 288.53 crores from the Uttarakhand Riverbed Mineral project, which contributed INR 55.00 crores to PAT. This one-time income was due to seized quantities and additional quantities where royalty was not paid, resulting in higher profit and royalty income for the quarter.

Segment-wise Revenue

The company saw growth across various segments:

• Mechanical segment: INR 222.00 crores (117% increase)
• Civil segment (including railways and water projects): INR 581.00 crores (7% increase)
• Operations & Maintenance (O&M): INR 398.00 crores (17% increase)
• Electrical segment: INR 67.00 crores (737% increase)
• Mining business: INR 26.00 crores (86% increase)

Order Book and New Orders

Power Mech Projects secured fresh orders worth INR 1,270.00 crores during the quarter. The total order backlog stood at INR 53,972.00 crores, with an executable order book of INR 14,391.00 crores (excluding two MDO projects). Key new orders included:

• Telangana Yadadri project worth INR 972.00 crores
• Solar project in Bihar worth INR 159.00 crores under the KUSUM scheme

Future Outlook

The company has set ambitious targets:

• Revenue target of INR 6,500.00 crores, representing 25% year-on-year growth
• Aim to secure INR 10,000.00 crores in new orders

Power Mech Projects is focusing on high-potential areas, including industrial O&M, railway, water infrastructure, and MDO projects.

Mining Development Operations (MDO)

The company's MDO business is progressing steadily:

• Kotre Basantpur project: Mining operations commenced in April, with coal production expected to start from September.
• Kalyaneswari Tasra project: Produced 7.61 lakh tons of coal, with ongoing efforts to increase production and offtake.

Challenges and Opportunities

While the company faces some challenges, including limited washery capacity constraining coal offtake and delayed payments in water projects, it sees significant opportunities in the power sector and infrastructure development. The management highlighted potential in areas such as balance of plant packages, battery energy storage systems, and green power initiatives.

Power Mech Projects continues to maintain a strong focus on execution and diversification, positioning itself to capitalize on the growing infrastructure and energy sectors in India.