Geojit has given Buy recommendation for Power Mech Projects with a target price of Rs. 727 in its research report issued on Mar 31, 2021
Geojit’s research report on Power Mech Projects
Company has an order backlog of Rs.7,353Cr (as on 16th Feb 2021), which shows revenue visibility for next 3 years. Company enjoys market leadership position in power O&M (Operations and Maintenance) and erection business with a market share of 55%-60%. Diversification of business to non power segment, especially civil (including railway, petro chemical, water etc) has helped the company to be in the growth track . We expect order backlog to grow at 14% with an average order intake of Rs.3,500Cr-4,000Cr per year. Revenue is expected to grow at a CAGR of 30% during FY21-23 and ROE to be at 16.3% by FY23E.
Outlook
We initiate coverage on POWERMECH with a BUY rating based on 6x FY23E earnings with a target price of Rs.727.