Power Mech up 17% on ₹597 crore order from BHEL; zooms 50% from March low

The power sector continues to be the sector that drives the management's bullish sentiment on order inflow outlook for the next 2-3 years

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Power Mech Projects shares soared 17 per cent to ₹2,546.45 on the BSE in Monday’s intraday trade amid heavy volumes after the company secured a ₹579 crore (excluding GST) order from Bharat Heavy Electricals Limited (BHEL) for civil structural and architectural works. The order is to be executed within 32 months from the date of Letter of Award (LoA).

 

At 01:11 PM; Power Mech shares were trading 16 per cent higher at ₹2,513.55, as compared to the 1.3 per cent rise in the BSE Sensex. The stock of the civil construction company has recovered 50 per cent from its 52-week low of ₹1,698.85 touched on March 3, 2025. It had hit a 52-week high of ₹3,725 on August 23, 2024.

 

Earlier, on February 25, 2025, Power Mech said that the company has secured a ₹164.63 crore (excluding GST) order from BHEL for main supply including design and engineering, mandatory spares and civil works including Erection & Commissioning (E&C) for 2 X 800 MW DVC Koderma TPS Phase-II-EPC project.  ALSO READ | Stock Market LIVE: Sensex climbs 1000 pts to 77,900; Nifty at 23,630

 

Power Mech is an engineering and construction company providing integrated service in erection, testing and commissioning (ETC) of boilers, turbines and generators and balance of plant (BOP), civil works and operation and maintenance (O&M). The order is to be executed within 30 months from the date of LoA.

 

The company is undertaking projects of all types, sizes and in all environments in India and abroad, which include ultra mega power projects, super critical thermal power projects, sub critical power projects, heat recovery steam generator, waste heat recovery steam generator, circulating fluidised bed combustion steam generator, gas turbine generator, hydro electric plants, maintenance, renovation, modernisation and annual maintenance of running plants and complete civil works in India and abroad. 

 

Power Mech is now engaged in several power projects ranging from 135 MW to 800 MW, besides many projects in the lower segment also. The company is entering other fields including railway projects and executing major railway projects of doubling of tracks including electrification, signaling, culverts, platforms, etc., transmission and distribution portfolio, mining of sand, development and operation of coal mines and the company has already undertaken some major projects in these areas.  ALSO READ | Nifty Bank up 2%, hits highest level of CY 2025; ICICI, Kotak at new highs

 

Further, the company's management is actively pursuing tenders to achieve ₹3,000 crore targets in new orders by March 2025. Additionally, Power Mech is also the L1 bidder for the 49 km Deoghar Bypass Highway project in Jharkhand. The project is valued at ₹973 crore under the hybrid annuity model (HAM).

 

The power sector continues to be the sector that drives management’s bullish sentiment on order inflow outlook for the next 2-3 years. Civil works and follow-up O&M jobs, which will also come up as part of the new commission, are the key drivers from this sector, according to analysts.

 

“The addition of new O&M orders during the year raises expectations for revenue scale-up. However, delays in setting up mine developer cum operator (MDO) projects prompt us to cut our revenue estimates for FY26E/27E by 10 per cent/ 5 per cent, respectively,” Geojit Financial Services said.  ALSO READ | Here's why Diamond Power Infra shares hit 5% upper circuit on Monday

 

Incremental contributions from O&M and mining orders are expected to help in margin expansion, and hence the brokerage firm forecast margins to improve by 137 bps in the FY25E-27E period. The earnings are expected to grow at 32 per cent compound annual growth rate (CAGR) in this period and for ROE to improve to 18.9 per cent in FY27E.