Power Mech Projects Ltd Q1 FY27 Earnings Analysis

- FY27 revenue growth projected at 21%. - MDO revenues to increase from INR 226 crores in Q4 FY26 to INR 500 crores in FY27 and INR 1,250 crores in FY28. - MDO revenue mix expected to grow from 7% in FY27 to 13% in FY28 of total revenue. - Monthly MDO revenues average INR 40-50 crores, factoring seasonality and ramp-up. - Order inflow target for FY27: approximately INR 12,000 crores; similar range expected for FY28 (INR 12,000-15,000 crores). - EBITDA margins expected to improve gradually by 0.5% yearly, reaching 14% by FY30 and 14.25% in FY31. - MDO EBITDA margins expected to rise by 1% annually to peak rate capacity of 20-21% by FY29/FY30. - Increasing contribution from O&M and EPC business expected to enhance margins and revenue mix. - Strong order backlog (~INR 55,151 crores including MDO) provides multi-year revenue visibility.

- Company projects a 21% revenue growth for FY27. - EBITDA margin expected to improve from 12.3% in FY26 to around 12.5% in FY27, with a 0.25%-0.3% yearly increase. - EBITDA margins for MDO business currently at 15%-16%, projected to increase by 1% annually, reaching ~20% by FY30. - Order inflow target for FY27 is INR 12,000 crores, with a similar or higher range (INR 12,000-15,000 crores) expected for FY28. - Profit after tax grew 18% in FY26; continued growth expected in line with revenue and operational improvements. - Diversification into high-margin EPC and O&M businesses expected to enhance profits and earnings per share over time. - Margins to improve driven by increased O&M revenue mix and MDO business scaling up.

- FY27 Capex plan includes construction of a coal washery, with an estimated addition of around INR 400 crores at the Power Mech level without incurring any debt. - An additional INR 400 crores capex is planned for the Tasra Coal Handling Plant and railway siding under the Tasra SPV. - The washery construction is expected to be completed by Q4 FY27, with washed coal supply commencing thereafter. - The company is tracking government planned investment of INR 37,500 crores for coal gasification projects, expected to emerge in 6-12 months, representing potential strategic future involvement. - Strategic tie-up with Thyssen Group, Pune, for bidding and construction in iron ore material handling and process management, targeting NMDC projects worth INR 8,000 to 10,000 crores. - Efforts to diversify into mining, steel sector, and infrastructure with focus on EPC and BOP projects, aiming order inflow target of INR 12,000 crores for FY27.

- For FY27, Power Mech Project Limited plans a capex addition of around INR 400 crores related to washery construction and coal handling plant developments. - The company intends to fund this capex without incurring new debt, indicating no immediate plans for additional debt-raising. - Existing gross debt as of March 31, 2026, stands at INR 622 crores with a comfortable debt-equity ratio of 0.32x, showing controlled leverage. - No mention was made during the call about any forthcoming equity fundraising. - Overall, the focus appears on managing growth through operational cash flows without reliance on new borrowings or equity issuance in the near term.

- Total order backlog including MDO contracts: ~INR 55,151 crores - Executable order book excluding MDO: ~INR 15,899 crores - Current year's order inflow target: INR 12,000 crores (FY27) - Order inflow achieved in FY26: INR 7,210 crores (72% of target) - Pending water projects order execution: INR 900 crores (balance to be executed) - Railway segment order book: INR 700 crores - Average order execution tenure: ~2.5 years with 40% executed annually - Major clients include Adani (~INR 3,200 crores) and BHEL (~INR 4,700 crores) - Opportunities potential size for current year: ~INR 70,000 crores in tenders and projects - Focus on power sector (~70% of order backlog) and non-power sectors (~30%)