Power Mech Projects Limited: Navigating Growth with Strategic Diversification in Q3 FY26

Power Mech Projects Limited, a prominent player in India's industrial and infrastructure services, has reported a robust performance for the third quarter of fiscal year 2026, ending December 31, 2025. The company demonstrated sustained growth across its core segments while strategically expanding into new, high-potential verticals. This quarter's results underscore Power Mech's strong execution capabilities and its commitment to operational excellence, particularly in Power ETC, Balance of Plant (BoP) EPC, Operations & Maintenance (O&M), and emerging segments like Battery Energy Storage Systems (BESS).

For Q3 FY26, Power Mech recorded a consolidated revenue of INR 1,433 crore, marking a 6% year-on-year increase from INR 1,347 crore in Q3 FY25. This growth was primarily fueled by consistent execution in power, O&M, and the ramp-up of operations in mining and civil works. The O&M business, in particular, showed strong traction, supported by new order inflows and efficient contract execution. Consolidated EBITDA for the quarter stood at INR 173 crore, an 8% increase over the previous year, with EBITDA margins at 12.08%. While margins remained broadly stable, a marginal dip was attributed to provisions made for compliance with the new labor code. Profit After Tax (PAT) for the quarter surged by 15% to INR 100 crore, with PAT margins improving to 7.02% from 6.47% in Q3 FY25. For the nine months ended December 2025, the company achieved a total revenue of INR 3,987 crore, reflecting a 17% increase year-on-year, driven by the ramp-up in key verticals and industrial power construction projects.

Segmental Performance and Strategic Shifts

The company's revenue mix for Q3 FY26 highlights the strength of its diversified portfolio. Civil works contributed the largest share at 39% (INR 543 crore), followed by O&M at 34% (INR 488 crore) and Erection works at 20% (INR 286 crore). Electrical and MDO segments contributed 5% (INR 71 crore) and 2% (INR 32 crore) respectively. The geographical mix remained predominantly domestic at 95%, with 5% from international operations, while the power sector accounted for 70% of the revenue, with non-power sectors contributing 30%.

Power Mech's strategic initiatives are clearly aimed at future-proofing its business model. A significant development this quarter was the award of a large Balance of Plant (BOP) EPC package for the 800 MW Singareni thermal power project from BHEL. This order expands the company's scope from pure execution packages to integrated EPC delivery, leveraging its extensive experience in BOP erection, commissioning, and O&M. This backward integration approach, coupled with strong engineering and project management teams, provides a substantial in-house value addition compared to other BOP players.

Another groundbreaking move is the company's entry into the grid-scale Battery Energy Storage System (BESS) market. Power Mech, through its wholly-owned subsidiary PM Green Private Limited, secured an order for a 250 MW / 1,000 MWh BESS project in West Bengal under a Build-Own-Operate (BOO) model. This project, with an estimated revenue of INR 1,563 crore over 15 years and a CAPEX of INR 800 crore, positions Power Mech at the forefront of India's energy transition, anticipating an IRR of 16-18% on equity investments. The company is actively exploring opportunities in both battery and pumped storage, recognizing them as future growth engines for grid stability and renewable energy integration.

Order Book and Future Outlook

The company's order book remains robust, with total order inflows reaching INR 6,761 crore year-to-date in FY26. This includes significant wins such as the BESS order (INR 1,563 crore) and the BOP EPC package. The total order backlog, including MDO projects, stands at approximately INR 56,800 crore, with INR 17,300 crore excluding MDO orders, providing over three years of revenue visibility. Power Mech is confident of achieving its INR 10,000 crore order inflow target for FY26.

Management anticipates revenue growth of 17-18%, potentially reaching 20% for FY26. The MDO business is projected to generate around INR 250 crore in FY26, with significant ramp-up expected in FY27 (INR 600-700 crore) and FY28 (INR 1,800-1,900 crore), with EBITDA margins for MDO expected to be in the 16-17% range from FY28 onwards. The company also expects an overall revenue growth of 20-25% in FY27.

Despite project commencement delays in some areas due to monsoons and environmental clearances, and slower certification timelines in the water division, Power Mech has demonstrated resilience. The company has proactively addressed potential impacts of new labor codes through contractual provisions, ensuring cost protection. With a strong pipeline of orders across power, civil infrastructure, railways, and emerging energy segments, Power Mech Projects Limited is well-positioned for sustained growth and value creation for its stakeholders.

Disciplined Execution and Growth Trajectory

Power Mech's disciplined approach to execution and strategic diversification are key pillars of its growth trajectory. The company's ability to manage complex, large-scale, and technology-intensive projects across various geographies, coupled with its focus on digital transformation, enhances operational efficiency and project uptime. The improvement in operating cash flow, from INR (253) crore in 9M FY25 to INR 113 crore in 9M FY26, and a well-controlled debt-equity ratio of 0.35x, further strengthen its financial health. As Power Mech continues to leverage its in-house capabilities and expand into high-growth sectors like energy storage and mining, it reinforces its position as a leading industrial and infrastructure services provider, poised for continued success in the coming years.