Power Mech Projects Limited — Investor Meet, 17-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Power Mech Projects Limited reported a total income of INR 1,347 crore for Q3 FY25, marking a 21% increase from INR 1,115 crore in Q3 FY24. EBITDA rose 13% to INR 160 crore, while profit after tax (PAT) surged 39% to INR 87 crore. EBITDA margin slightly declined from 12.66% to 11.87%, attributed to higher overhead costs, despite an increased PAT margin from 5.60% to 6.50% due to lower tax and enhanced other income.

**Future Outlook and Growth Drivers:** Management highlighted plans for significant growth driven by robust demand in the power sector and O&M operations. The focus is on scaling operations, enhancing operational efficiencies, and pursuing high-margin orders. They set a revenue target of INR 7,000–7,500 crore for FY26 and INR 9,000 crore for FY27.

**Order Book and Operational Updates:** The order intake for FY25 stands at INR 4,242 crore with a backlog of approximately INR 57,915 crore. Management is pursuing tenders worth INR 3,000 crore and anticipates completion of MDO projects to bolster revenue.

**Analyst Q&A Insights:** Analysts questioned challenges in execution amid a sizeable order book. Management indicated they could reach execution capacity of INR 2,000 crore per quarter, aligning revenue growth with operational scaling. They expect EBITDA margins to rise by an incremental 1-1.5% over the next few years, contingent on high-margin order intake.

**Strategic Focus Areas:** Management's proactive approach in the power and infrastructure sectors signals a bullish market sentiment, emphasizing installation and O&M services. This aligns well with anticipated government investments in railways and water projects.

**Investor Insight:** Financial health remains solid, with a substantial backlog and strategic focus on profitable sectors. While margins are under pressure due to rising costs, improvements appear achievable with operational stabilization. The outlook suggests a favorable environment, leaning towards a 'buy' stance, considering projected growth in revenues and margins.