Power Mech Q2 revenue rises 30%, EBITDA margin trails year ago

Power Mech Projects Limited reported Q2 FY27 revenue of Rs 1,609 crore, up 30% year on year, but earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 11.55%, below 12.65% in Q2 FY26. EBITDA rose 18.4% year on year to Rs 187 crore, while margin improved from 10.78% in Q1 FY27.

Why did Power Mech revenue rise in Q2 FY27?

Power Mech’s Q2 FY27 revenue increased 30% year on year because of higher execution in Industrial Construction, Industrial Services and international projects. Revenue reached Rs 1,609 crore, compared with Rs 1,238 crore in Q2 FY26, although it was Rs 15 crore below the Rs 1,624 crore reported in Q1 FY27.

Management said the quarter also reflected higher execution in Infrastructure Construction. For H1 FY27, revenue was Rs 3,233 crore, up 28% year on year. The comparison shows that the company maintained double-digit growth against the prior-year quarter, but Q2 revenue was marginally lower than the preceding Q1 FY27 level.

The Rs 3,233 crore H1 FY27 outcome combines the Rs 1,624 crore recorded in Q1 FY27 and Rs 1,609 crore in Q2 FY27. Management described the overall trajectory as positive and identified sustained execution across core business lines and newly secured orders as contributors to the period.

Which segments generated Power Mech’s Q2 FY27 revenue?

Infrastructure Construction was Power Mech’s largest disclosed Q2 FY27 segment at Rs 582 crore, or 36.17% of revenue, followed by Industrial Services at Rs 570 crore, or 35.43%. Industrial Construction contributed Rs 372 crore, while mining development and operations (MDO) contributed Rs 85 crore.

Industrial Services increased by Rs 192 crore from Rs 378 crore in Q2 FY26 and by Rs 139 crore from Rs 431 crore in Q1 FY27. Infrastructure Construction rose by Rs 250 crore from Rs 332 crore a year earlier, but declined by Rs 214 crore from the Rs 796 crore reported in Q1 FY27.

MDO revenue rose from Rs 31 crore in Q2 FY26 to Rs 85 crore in Q2 FY27, and its share of revenue increased from 2.50% to 5.28%. Power Mech attributed the higher MDO share to ramp-up in production at the KBP mine, while it said new order inflows supported growth in operations and maintenance services.

Why did Power Mech’s EBITDA margin remain below last year?

Power Mech’s EBITDA margin remained below the prior-year level because Q2 FY27 EBITDA increased 18.4% to Rs 187 crore, less than the 30% rise in revenue. The margin was 11.55%, compared with 12.65% in Q2 FY26, a difference of 1.10 percentage points.

The sequential comparison was more favourable. EBITDA increased by Rs 11 crore from Rs 176 crore in Q1 FY27 to Rs 187 crore in Q2 FY27, while EBITDA margin rose from 10.78% to 11.55%. The presentation attributed the quarter-on-quarter EBITDA improvement to better operating costs.

Management said the Q2 FY27 margin was higher than Q1 FY27 because of sustained execution across core segments and ramp-up of operations on newly secured orders. For the year-on-year comparison, the presentation attributed the Rs 29 crore increase in EBITDA to increased revenue, without identifying a separate cost factor.

How did Power Mech’s Q2 FY27 profit after tax change?

Power Mech reported Q2 FY27 profit after tax (PAT) of Rs 88 crore, up 12.5% from Rs 78 crore in Q2 FY26 but down Rs 1 crore from Rs 89 crore in Q1 FY27. PAT margin was 5.46%, below 6.31% a year earlier and 5.50% in the prior quarter.

The sequential PAT decline differed from the EBITDA movement because finance and depreciation costs increased, according to the presentation. Thus, EBITDA rose by Rs 11 crore from Q1 FY27 to Q2 FY27, while PAT fell by Rs 2 crore on the company’s stated like-for-like comparison.

Management attributed the Rs 10 crore year-on-year rise in Q2 FY27 PAT to higher EBITDA. The difference between the 11.55% EBITDA margin and the 5.46% PAT margin highlights that the improvement in operating costs cited for the quarter did not translate into a sequential increase in PAT after finance and depreciation costs.

What could affect Power Mech’s margins in coming quarters?

Management expects an EBITDA-margin uptrend in coming quarters as MDO revenue scales up. MDO generated Rs 85 crore in Q2 FY27, or 5.28% of revenue, while the MDO order backlog was Rs 39,243 crore within a total FY27 year-to-date backlog of Rs 56,729 crore, including MDO.

Power Mech had FY27 year-to-date order inflows of Rs 4,801 crore, equivalent to 40% of its target. Industrial Services accounted for Rs 3,718 crore of this inflow and Infrastructure Construction for Rs 1,083 crore; the presentation showed no amount against Industrial Construction or MDO in the disclosed inflow split.

The company secured Rs 1,890 crore of orders during Q2 FY27 and reported a further Rs 1,046 crore of inflow in Q3 till date. Awards cited included five-year comprehensive operations and maintenance contracts for Vedanta’s 2 x 600 megawatt Athena plant and Adani’s 2 x 600 megawatt Moxie Power Thermal Plant at Tuticorin, as well as a three-year contract at Yadadri Thermal Power Station.

Conclusion

Power Mech combined Rs 1,609 crore of Q2 FY27 revenue, up 30% year on year, with Rs 187 crore of EBITDA, up 18.4%. Industrial Services and Infrastructure Construction together generated Rs 1,152 crore, while MDO increased to Rs 85 crore; however, EBITDA margin remained 1.10 percentage points below the Q2 FY26 level.

The next issue to watch is management’s stated expectation that margins will trend upward as MDO revenue scales from its 5.28% Q2 FY27 share. Execution against the Rs 56,729 crore FY27 year-to-date backlog, including Rs 39,243 crore in MDO, and conversion of the Rs 1,046 crore reported as Q3-to-date inflow will indicate progress against that plan.