Any current/future new fundraising through debt or equity?

The company is currently managing with existing fund limits of around Rs.500 crores in working capital and equipment loans, with around 75%-80% utilization. No immediate plans to raise additional debt as they are managing growth through mobilization advances and internal accruals. Banks are willing to fund up to 25% of projected turnover, meaning potentially Rs.500-600 crores additional debt can be raised if needed, based on good financial ratings and projections. Rs.240 crores of capex funds have been raised through QIP (equity) for the washery project; remaining Rs.450 crores is planned to b

Any current/future capex/capital investment/strategic investment?

Approximate total capex of Rs. 690 crores planned for the washery (mining business) by FY26. Rs. 240 crores of capex funded through QIP; balance Rs. 450 crores to be raised as loans at Power Mech level. Additional funds being raised at SPV level for Heavy Earth Moving Machinery (HEMM) and other plant requirements; machinery already procured. No major capex planned at SPV level currently; funding mainly through internal accruals and loans based on site requirements. Company managing working capital efficiently; current fund limits around Rs. 500 crores with about 75%-80% utilization. Not planni

Future growth expectations in sales/revenue/volumes?

FY24 revenue guidance: Rs.4,500 crores to Rs.4,700 crores, pending traction in FGD and MDO business. FY25 growth target: 30% to 35% year-on-year growth in revenue, including FGD and mining businesses. Order book strong at around Rs.17,000 crores, with expected annual execution of about one-third (~33%). Anticipated order inflows of Rs.2,000-3,000 crores more in FY24, supporting growth. MDO business expected to ramp up significantly over the next 2 years, contributing ~7% of business by FY25. O&M business witnessing significant growth, with Rs.2,000 crores O&M orders already booked an

Future growth expectations in earnings/operating earnings/profits/EPS?

FY24 revenue guidance: Rs.4,500 - 4,700 crores, with EBITDA margins stable as Q3. FY25 expected revenue growth: 30% to 35% year-on-year, inclusive of EPC, FGD, and mining businesses. Margins expected to remain stable or see a slight increase depending on the FGD/mining mix. Order book robust (~Rs.17,000 crores) with comfortable execution capacity supporting growth. Conversion rate from order book to revenue projected around 32% to 33%. MDO and O&M businesses anticipated to drive substantial growth and improve margins by FY26. EBITDA grew 34% YoY and PAT up 22% YoY in first 9 months of FY24; th

Current/ Expected Orderbook/ Pending Orders?

Current order backlog (excluding MDO): Rs.17,595 crores (as of Feb 2024). Overall order backlog including MDO: Rs.57,328 crores. Civil business backlog: Rs.8,500 crores. Erection segment backlog: Rs.7,500 crores. Orders received in Q3 include: - Ghatampur Thermal Power project: Rs.263.57 crores - Meenakshi Energy: Rs.675 crores - Dariba, Udaipur (Hindustan Zinc): Rs.229.2 crores L1 status orders: approximately Rs.1,900 crores (including Rs.970 crores FGD and Rs.600 crores irrigation project). Additional bids submitted: Rs.5,500 crores out of Rs.15,000 crores immediate o

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Power Mech Projects LtdQ4 FY25Construction

Power Mech Projects Ltd Q4 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹2,720P/E: 23.2Market Cap: ₹7.8K CrSector: Construction

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→FY24 revenue guidance: Rs.4,500 crores to Rs.4,700 crores, pending traction in FGD and MDO business.
→FY25 growth target: 30% to 35% year-on-year growth in revenue, including FGD and mining businesses.
→Order book strong at around Rs.17,000 crores, with expected annual execution of about one-third (~33%).
→Anticipated order inflows of Rs.2,000-3,000 crores more in FY24, supporting growth.
→MDO business expected to ramp up significantly over the next 2 years, contributing ~7% of business by FY25.
→O&M business witnessing significant growth, with Rs.2,000 crores O&M orders already booked and expected to continue.
→Sectoral opportunities robust: 27,000 MW power projects under implementation and large opportunities in railways, water, and infrastructure.
→Expect to achieve around Rs.6,000 crores top line in FY25, driven by EPC, O&M, and MDO segments.

Margin guidance

Category 3

→FY24 revenue guidance: Rs.4,500 - 4,700 crores, with EBITDA margins stable as Q3.
→FY25 expected revenue growth: 30% to 35% year-on-year, inclusive of EPC, FGD, and mining businesses.
→Margins expected to remain stable or see a slight increase depending on the FGD/mining mix.
→Order book robust (~Rs.17,000 crores) with comfortable execution capacity supporting growth.
→Conversion rate from order book to revenue projected around 32% to 33%.
→MDO and O&M businesses anticipated to drive substantial growth and improve margins by FY26.
→EBITDA grew 34% YoY and PAT up 22% YoY in first 9 months of FY24; this trajectory is expected to continue.
→Operating leverage expected as revenue scales with sustained order inflows and execution.

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Fundraise plans

Yes

→The company is currently managing with existing fund limits of around Rs.500 crores in working capital and equipment loans, with around 75%-80% utilization.
→No immediate plans to raise additional debt as they are managing growth through mobilization advances and internal accruals.
→Banks are willing to fund up to 25% of projected turnover, meaning potentially Rs.500-600 crores additional debt can be raised if needed, based on good financial ratings and projections.
→Rs.240 crores of capex funds have been raised through QIP (equity) for the washery project; remaining Rs.450 crores is planned to be raised via loans at the company level.
→At SPV level, capex for mining equipment is being funded through internal accruals and loans as required; no major capex currently ongoing at SPV.
→Overall, the company prefers low debt and is focusing on controlled capex spending without major new fundraising announcements.

Order book

Yes

→Current order backlog (excluding MDO): Rs.17,595 crores (as of Feb 2024).
→Overall order backlog including MDO: Rs.57,328 crores.
→Civil business backlog: Rs.8,500 crores.
→Erection segment backlog: Rs.7,500 crores.
→Orders received in Q3 include:
→ - Ghatampur Thermal Power project: Rs.263.57 crores
→ - Meenakshi Energy: Rs.675 crores
→ - Dariba, Udaipur (Hindustan Zinc): Rs.229.2 crores
→L1 status orders: approximately Rs.1,900 crores (including Rs.970 crores FGD and Rs.600 crores irrigation project).
→Additional bids submitted: Rs.5,500 crores out of Rs.15,000 crores immediate opportunity.
→Targeted new order inflow for FY24: Rs.10,000 crores (6,768 crores received till now plus expected additions).
→Order execution cycles average 30-42 months.
→Order book conversion to turnover typically around 32-33% annually.

Capex plans

Yes

→Approximate total capex of Rs. 690 crores planned for the washery (mining business) by FY26.
→Rs. 240 crores of capex funded through QIP; balance Rs. 450 crores to be raised as loans at Power Mech level.
→Additional funds being raised at SPV level for Heavy Earth Moving Machinery (HEMM) and other plant requirements; machinery already procured.
→No major capex planned at SPV level currently; funding mainly through internal accruals and loans based on site requirements.
→Company managing working capital efficiently; current fund limits around Rs. 500 crores with about 75%-80% utilization.
→Not planning to raise significant new debts beyond current limits; banks ready to fund up to 25% of projected turnover.
→Future growth mainly driven by ongoing projects and organic capacity expansion rather than large-scale new capex beyond mining washery.

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