Power Mech Projects secures ₹279 crore Telangana order

Power Mech Projects Limited has secured a ₹279.20 crore order from Telangana Power Generation Corporation Limited for operation and maintenance work at Yadadri Thermal Power Station. Shares of Power Mech Projects were trading at ₹2,398.60 on September 29, up 1.45% on the NSE. The three-year contract covers mechanical, electrical, and control and instrumentation systems, along with maintenance of the ash handling and coal handling plants at the 4,000 MW Yadadri Thermal Power Station. The scope includes ash handling facilities across all five units, comprising Units 1 and 2 under Stage I and Units 3, 4 and 5 under Stage II. The contract value excludes GST, with a price variation clause applicable during the second and third years. This order adds to the company's thermal power O&M portfolio. Earlier in September, Power Mech secured a ₹970 crore contract from Vedanta Power for operating and maintaining its 1,200 MW Sakti Thermal Power Plant in Chhattisgarh over 60 months. My view: The two contracts represent a combined order value of ₹1,249.20 crore, strengthening the company's visibility in recurring power plant operations and maintenance work. However, order value alone does not translate into immediate revenue or profit. Execution costs, operating margins and timely mobilisation will determine the actual earnings contribution. The Telangana contract also carries a three-year execution period, making revenue recognition gradual. I am watching the company's order inflows, execution updates and operating margins in the coming quarters. At ₹2,398.60, the stock's ability to sustain its recent price strength alongside volume will be important for assessing follow-through.

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