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INVESTMENT INSIGHTS

Check Before You Invest : Power Mech Projects Ltd

BSE: 539302 NSE: POWERMECH ISIN: INE211R01019
  |   Sector:  Construction & Infrastructure   |   Industry:  Engineering - Construction

Snapshot

Q.1 Which industry/sub-sector does Power Mech Projects Ltd belong to?
Power Mech Projects Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Engineering - Construction segment.
Q.2 Is Power Mech Projects Ltd a good quality company?
Power Mech Projects Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Power Mech Projects Ltd undervalued or overvalued?
Power Mech Projects Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 21.47 24.43
Price to Book 3.28 3.72
Price to Sales 1.29 1.49
EV to EBITDA 10.63 12.61
Q.4 Is Power Mech Projects Ltd a good buy now?
Power Mech Projects Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Power Mech Projects Ltd?
Power Mech Projects Ltd revenue growth is 24.4% for FY-2025, which is above its 5-year CAGR of 19.31%, indicating faster growth.

Q.2 Gross Profit margin of Power Mech Projects Ltd?
Power Mech Projects Ltd Gross profit margin which is the profit after deduction of direct costs, is 10.5% for FY-2025, which is above its 5-year median of 9.2%, indicating increasing margins.

Q.3 Operating Profit Margin of Power Mech Projects Ltd?
Power Mech Projects Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 11.57% for FY-2025, which is in line with its 5-year median of 11.15% indicating stable margins.

Q.4 Net Profit Margin of Power Mech Projects Ltd?
Power Mech Projects Ltd Net Profit Margin is 6.64% for FY-2025, is above its 5-year median of 5.76%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 10.5 9.2
Operating Profit Margin (%) 11.57 11.15
Net Profit Margin (%) 6.64 5.76

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Power Mech Projects Ltd?
Power Mech Projects Ltd Return on Asset is 7.85%, which is above its 5-year historical median of 6.67%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Power Mech Projects Ltd?
Power Mech Projects Ltd Return on capital employed is 23.1% for FY-2025, which is in line with its 5-year historical median of 22.25%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of Power Mech Projects Ltd?
Power Mech Projects Ltd Return on equity is 17.39% for FY-2025, which is above its 5-year historical median of 15.96%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Power Mech Projects Ltd?
Power Mech Projects Ltd Cash conversion cycle is 32 days, above its 5-year historical median of 19 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.18 1.14
ROE (%) 17.39 15.96
ROCE (%) 23.1 22.25
Cash Conversion Cycle 32 days 19 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Power Mech Projects Ltd?
Power Mech Projects Ltd Debt-to-Equity ratio is 0.33, which is lower the industry average of 0.38, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Power Mech Projects Ltd?
Power Mech Projects Ltd Debt to cash flow from operations is 977.35, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Power Mech Projects Ltd?

Q.1 Promoter shareholding and pledge status of Power Mech Projects Ltd?
Promoters hold 58.42% of the Power Mech Projects Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Power Mech Projects Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Power Mech Projects Ltd vs industry peers?
Power Mech Projects Ltd revenue CAGR is 19.31%, compared to the industry median CAGR of 0%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 24.4 -
Gross Profit Growth (%) 27.9 17
Operating Profit Growth (%) 22 14
Net Profit Growth (%) 40.3 20.3
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.18 0.63
ROE (%) 17.39 6.16
ROCE (%) 23.1 10.5
Cash Conversion Cycle (days) 32.25 52

Valuation & price assessment

Q.1 Stock return of Power Mech Projects Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 24.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 24.1% 54.2% 18.7% -11.8%
Q.2 Valuation ratios of Power Mech Projects Ltd vs historical?
The current P/E ratio of 21.47 is lower than its historical median of 24.43, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 21.47 24.43 21.52
Price to Book 3.28 3.72 1.74
Price to Sales 1.29 1.49 1.51
EV to EBITDA 10.63 12.61 11.49

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