From a trading price of ₹889 apiece a year ago, the shares of Power Mech Projects, one of India's leading infrastructure-construction companies, have skyrocketed 316.2% to record a new historic high of ₹3,700 apiece in today's trade. Impressively, out of the last 12 months, the stock recorded 10 months with gains, with August being the best month with a rally of 52%, followed by September with 28% return.
Long-term investors have been rewarded even more handsomely, as shares have risen from ₹472 apiece to the current level of ₹3,676, generating a phenomenal return of 680% in 3 years. In comparison, the Nifty 50 index has gained 80% in the same time frame.
Moreover, the shares have delivered multi-bagger returns of 118% in CY21 and 110% in CY22, and in the current year so far, it is up by 87%.
Power Mech Projects is a small-cap stock with a market capitalisation of ₹5,482 crore. The company is an integrated power infrastructure services company in India, providing comprehensive erection, testing, and commissioning of boilers, turbines, and generators (ETC-BTG), balance of plant (BOP) works, civil works, and operation and maintenance (O&M) services.
Earlier in April, the company secured multiple orders worth ₹720 crore. One notable project is the construction of a government medical college and hospital for Uttarakhand Pey Jal Nigam Ltd, with a contract value of Rs. 362 crore.
Additionally, the company has been awarded an order worth Rs. 162 crore under the Revamped Distribution Sector Scheme for MPPKWCL, Khargone Circle, Indore in Madhya Pradesh, and railway electrification of 25 KV OHE Works, Mysuru Division, Karnataka.
Furthermore, the company has secured a project valued at Rs. 106 crore from JSPL for balance erection works and refurbishment of 2X525 MW Monnet Ispat in Odisha, the company said in a regulatory filing.
In August 2022, the company was awarded five orders from the Adani Group valued at ₹6,163 crore for the implementation of a wet limestone-based Flue Gas Desulphurization system on Engineering Procurement and Construction (EPC) basis, according to media reports.
On the fundamental front, the company has demonstrated consistent growth in net profit over the past four quarters. In the first quarter of FY23, the company achieved a net profit of ₹39 crore, followed by a stronger performance in the subsequent quarter with a net profit of ₹43 crore.
During the third and fourth quarters of FY23, it recorded a net profit of ₹51 crore and ₹75 crore, respectively. Overall, the company concluded FY23 with a net profit of ₹207 crore, showcasing a significant improvement from a net profit of ₹138 crore in FY22.
The company informed that at the end of FY23, it had an order book of ₹23,027 crore.
Meanwhile, foreign institutional investors (FIIs) have raised their stake in the company to 5% during Q4FY23, up from 3.9% in the same quarter of the previous fiscal year.
A similar trend was seen when it comes to domestic institutional investors (DII), who raised their holdings to 10.8% in the March quarter from 8.3% in Q4 FY22.
Promoters hold the majority stake of 64.2% in the company as of the end of Q4FY23, while regular shareholders own a 20.1% stake, according to data from Trendlyne data.
02 analysts polled by MintGenie on average have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
