Power Mech Projects: Thermal Orders Grow

Power Mech Projects undertakes construction, erection, testing and commissioning of power plants. Its work covers boiler-turbine-generator (BTG) systems, civil structures and balance-of-plant work at thermal projects. What happened: In June 2026, Power Mech secured a Rs 1,008.9 crore order from JSW Thermal Energy for civil and structural works on a 2x800 MW project at Salboni, West Bengal. The contract runs for 36 months. The company also secured a Rs 2,550 crore balance-of-plant EPC contract from BHEL for the 800 MW Singareni project, marking a shift from individual packages to integrated EPC work. Why it matters: The order book stood at Rs 17,317 crore as of September 2026, excluding mining contracts. In Q2 FY27, the company added a Rs 970 crore O&M contract from Vedanta Power and a Rs 279.2 crore coal and ash handling contract at Yadadri. FY26 revenue grew 15.8% YoY to Rs 6,061.6 crore, with net profit rising 18.5% to Rs 411.7 crore. Three-year sales CAGR stands at 19%, with ROCE at 21.7%. What I am watching: Power Mech is targeting two more balance-of-plant EPC orders in FY27. Each such contract increases execution complexity and working capital requirements. Debtor days of 93 are on the higher side and merit close monitoring. The share price is down 12.9% over the past year despite strong earnings, which is either a value opportunity or the market pricing in its execution risk. My stance: The fundamentals are solid and order momentum is real. If EPC expansion comes with disciplined working capital management, earnings could re-rate significantly. But the market’s skepticism on debtor days and execution capacity is not wholly unfounded. I do not hold a position in Power Mech Projects at the time of writing. This is not investment advice.