Power Mech Projects hosted a
conference call on Nov 17, 2021. In the conference call the company was
represented by S Kodandaramaiah, Director Business Development; Rohit, VP
Business Development and J Satish, CFO.
Key takeaways of the conference
call
Q2FY22 Performance was in line with expected levels despite heavy
rains.
Revenue from erection, civil,
O&M and electricals stood at Rs 106 crore(up 20%yoy), Rs 223 crore(up 121%yoy),
RS 188 crore (up 29%yoy)and Rs 23 crore (up 109%yoy) in Q2Fy22.
Order backlog (including MDO
order of Rs 9294 crore executable over 25 years bagged in Q1FY22) stands at Rs
15809 crore. Of the order backlog 13.5% erection, 7.3%
O&M, 1% electrical works, 19.5%, civil & other works and balance 58.8%
mining. Of the order backlog about 29.5%
is power sector orders and balance are non-power orders.
Order inflow in H1FY22 (including
MDO order of Rs 9294 crore executable over 25 years bagged in Q1FY22) stood at
Rs 9637 crore.
However excluding the MDO order
the OB as end of Sep 30, 2021 stood at Rs 6515 crore. OB (excluding MDO Orders
but including L1 orders) as of today stands at Rs 8337
crore. L1 orders as of today was Rs 547 crore.
Including MDO the OB as of today
stands at Rs 17631 crore. As of Sep
2021, the Domestic constitute about 88% of OB as of today. PS 5359
crore (or 64%) nps share is Rs 2997 crore
Expecting growth momentum to continue
in H2FY22 and next year considering strong order book and confident of
achieving its internal targets.
Order inflow Rs 2300 crore in
H1FY22, target 4400-4500 crore. We target Rs 2550 crore of OI in H2FY22.
The company see lot of growth potential
in non-power sector O&M space. Targeting a few new sectors non power sector
O&M like IOCL etc. See lot of potential in both power and non
power sect o&m in overseas market.
The company currently tracks
projects worth Rs 25000 crore in both power sector and non power sector across
all verticals including water projects.
Manpower come back to normal to
13500 construction labour up from 8500 numbers earlier and total head count
including O&M, permanent and others is 30000 numbers.
Order wins so far is current
fiscal comprise of Singrauli order won in Q1, Adani Road project, Udankudi project
civil work project worth Rs 345 crore for which it is L1; 5 year O&M job for 2/x660 Coastal Energo
amounting RS 391 crore; Talavira EPC project RS 80 crore; 4X210 MW FGD project
amounting Rs 112 crore; two NMDC jobs civil works at Kirandul; 15-16 O&M
repair jobs worth about RS 30 crore and some desal O&M project in overseas
market.
Iron ore beneficiation plant for
NMDC is evaluated by the company for bidding.
Execution level for H2 will be
higher compared to h1 as historical.
MDO project is now in approval stage
and will take at least 8 months to get clearance. Equity component for the MDO venture is RS 100
crore over 3 years.
The company's quarterly execution
bandwidth was anywhere between Rs 550-850 crore and Q4FY21 order book burnout
is a proof of it. So the company is
confident of achieving the earlier states revenue guidance.
Against earlier stated order
inflow guidance of Rs 4000-4500 crore, considering order inflow till date and
L1 orders and order visibility the company is comfortably achieve Rs 3500-4000
crore of order intake for current fiscal. A there may be a spill over of Rs 500
crore into April 2021 if that not finalised within this fiscal.
On revenue front the company is
confident of a revenue of Rs 2600 crore for FY22 and revenue in excess of Rs
3000 crore for FY23.
Margin will go up in midterm. Margin will gradually return back to earlier
level of 12-13%. Currently the margin were impacted by covid related costs,
commodity price inflation to some extent, royalty of 2-3% paid to partners in
case of Railway projects as well as
business mix. The company expects the covid related costs to go away in another
6 months and once new railway projects starts contributing the margin will
improve as they don't have royalty payment commitment.
Improvement in Working Capital cycles
is expected with improved revenue mix and client mix.
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