Ladies and gentlemen, good day, and welcome to Power Mech Projects Limited Q3 FY 2026 earnings conference call. As a reminder, all participants' line will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Kundnani from Nirmal Bang Equities. Thank you, and over to you, sir.
Thank you, Ikra. Good morning. On behalf of Nirmal Bang Institutional Equities, I welcome you all to the 3Q FY 2026 earnings call of Power Mech. The management is represented by Mr. S. Kodandaramaiah, Director on Board, Mr. N. Nani Arvind , CFO. Now, I will hand over to the management for their opening remarks, which will be followed by the Q&A.
Good morning, everyone. I'm Arvind, CFO of the company. I have with me Mr. S. Kodandaramaiah , Director of Business Development. I would like to extend a warm welcome to all of you joining us the quarter three and nine months, financial year 2026 earnings call today. I take this opportunity to welcome you all to our Q3 FY 2026 earnings call. As we reflect on our performance during the third quarter of FY 2026, I am pleased to report that the company has continued to execute on its growth plans with strong results across all key segments. This quarter has demonstrated the consistency and scalability of our business model, with our core segments contributing to the positive momentum.
For Q3 FY 2026, the company recorded total revenue of INR 1,433 crore, reflecting 6% growth compared to the INR 1,347 crore in Q3 FY 2025. This increase was driven by sustained execution across power, O&M, and emerging segments such as mining and civil works. The O&M business, in particular, performed well, supported by new order inflows and strong execution of ongoing contracts. EBITDA for the quarter was INR 173 crore, up 8% year-on-year, with EBITDA margins at 12.08%. The margin remains stable compared to the previous quarter, with a slight dip due to provisions created for compliance with the new labor code. The underlying operational performance, however, remains strong.
Profit after tax for the quarter was INR 100 crore, marking a 15% increase from INR 87 crore in quarter three FY 2025, with PAT margins improving to 7.02% from 6.47% in quarter three FY 2025. For the nine months ended December 2025, the company achieved a total revenue of INR 3,987 crore, reflecting 17% increase compared to INR 3,409 crore in the same period last year. The strong nine months performance was largely driven by the ramp-up in our key verticals, particularly in O&M and industrial power construction projects. EBITDA for the nine months period was INR 513 crore, a 23% increase over the previous year, with EBITDA margins improving to 12.88% from 12.2%.
PAT for nine months was INR 258 crore, a 19% increase over INR 218 crore in the same period last year. The geographical mix for the quarter was 95% domestic and 5% international, while power sector contribution remained at 70%, with non-power sector accounting for the remaining 30%. Revenue mix for nine months, the geographical mix for nine months was 95% domestic and 5% international, while power sector contribution remained at 67%, with non-power sector accounting for the remaining 33%. From an order inflow perspective, order wins during the year to date have reached about INR 6,761 crore. We are progressing towards achieving INR 10,000 crore order intake in FY 2026. During the quarter, we secured several large and strategic orders across EPC, O&M, and new energy infrastructure.
A key award includes a large BOP EPC package for the 800 MW Singareni thermal project from BHEL, with that, which expands our scope from execution packages to integrated EPC delivery and BOP systems. We also received a grid-scale battery energy storage system project under build-own-operate model from State Utility, which marks our entry into the utility scale storage assets with a long-term contracted revenue structure. The total order backlog, including MDO projects, is about INR 56,800 crore, INR 70,300 crore, excluding MDO orders. The executable order work-order book provides multi-year revenue visibility across power, civil, EPC, and O&M segments. The order pipeline remains active across thermal, balance of plant, civil infrastructure, railways, and energy transition projects.
So the company's operating cash flow has improved, reducing from INR -253 crore in nine months FY 2025 to INR 113 crore in nine months FY 2026, primarily due to realization of receivables during the period. This is further expected to improve operating cash flow and reduce reliance on working capital limits. Gross and net debt levels remain well controlled despite delays in certification of order books and realization of receivables. As on 31st December 2025, the gross debt was around INR 833 crore, and the net debt was INR 233 crore. The average debt equity ratio, as on the same date, was 0.35 x. In summary, we are pleased with the progress we have made during Q3 and the first nine months of FY 2026.
The company's diversified order book, strong execution across segments, and strategic focus on high-value projects continue to position us for sustained growth. With a solid pipeline of orders and ongoing project execution, we are confident in achieving our full year targets and driving long-term value for our stakeholders. With this, I now request Mr. Ramaiah Garu to update on the key business development initiatives and future outlook.
Thanks, Arvind, for your initial numbers and all the key aspects of the activities in the company. I also thank our investor community here. To carry forward what Arvind has said, particularly on the business side, right? I think we continue to drive on the investment, bullish investment profile in the country across various sectors. As a company which is strongly embedded in the power sector business, we continue to drive the power sector business with lot of opportunities. Then having diversified to infra and non-power sector, there is a continuous opportunity available in various sectors, and that is how the order of booking has been consistent with our expectation.
Overall, increase in the order backlog has gone up by about 10%, from INR 14,387 crore to end of the quarter, to INR 15,764 crore. The key aspect of the driving of this increase in the order backlog is due to the key order we have received for the first time, a comprehensive EPC order. The 2 in a native state, in Telangana, which drives the business better for us because of the customer interaction and all, reach and all. And that has helped the company to grow in many sectors, with a INR 2,550 crore. And balance out, about INR 300 crore orders are mainly in O&M in the domestic and international market.
The mechanical side of the business has grown from the backlog has increased from INR 2,300 crore to INR 2,915 crore, increase of 28.5%. Civil has grown up from INR 8,472 crore to INR 9,103 crore, a growth of 7.5%. And then O&M, their last year order backlog was INR 2,049 crore, now it is INR 2,522 crore, a small dip of 8.2%. And electrical also has seen an upswing, mainly because of the electrical portion of the business we got in the EPC. That contributes about INR 80 crore, which has increased the electrical backlog to 18.3%.
The domestic business continues to drive the market because of the opportunities, and international, we're focusing mainly on the O&M and short-term contracts with high margins. That is in line with the company's goal of improving our margins. These are the key numbers as per the business profile is concerned. Now, for this year's target of INR 10,000 crore, what we discuss with the team, the investor team, and what we have got all the opportunities around the INR 5,162 crore, mainly driven by Adani. They are investing continuously, and they are taking the decisions in ordering. Then O&M, there is a strong profile of opportunities with Vedanta Group. These two groups should enable us to reach the targets reasonably.
And what has been recently a great breakthrough has been in the business of energy storage. In fact, energy storage is going to drive the business substantially, the first breakthrough of what we received for a 250 MW energy storage project in West Bengal. That gives a daily availability of 10,000 MWh. In fact, the energy storage, both in the form of battery storage and the pumped storage, are going to be the future growth engines for a company like us. And it brings the synergy into the system based on our expertise in execution and also engineering expertise we are gaining.
These energy storages, both in the battery storage and then the pumped storage, are required to balance the power grid stability, and we will be contributing a little way, our contribution to that. This project involves a 1,000 MWh output, and an expected revenue of nearly INR 103 crore per year, over 15 years. That will give an overall revenue of INR 1,563 crore. It involves a CapEx of about INR 800 crore, and that we have got a consortium of partners with, led by Power Mech, 51%. This one, the short duration project, 18 months, and facilities are available, land is not a problem. There is a proper contract with West Bengal Power Development Corporation.
Then the agreement is in place, and we have to now get going on this project. And the battery is the main part of this this investment, and the balance of systems is mainly the electrical systems and the balancing facilities and all. And that is a key breakthrough. And then Singareni, as we said, you know, INR 2,550 crore, it has got the three components of the business. Of course, engineering integration has to be done. There are a lot of outsourcing and integration of with the in-house expertise in construction and engineering coordination, project management, we have to take it up. And out of INR 2,550 crore, the breakup is mechanically is INR 1,550 crore, civil is about INR 720 crore, electrical is INR 280 crore.
Therefore, that drives the business in all these segments, and that will be. The schedule is about 38 months, and there is a fair payment terms available from BHEL. This has been taken from BHEL, and with a 10% advance, and then a retention of 5% only. And now we are aggressively driving their business, and we have taken up on the board some of the experts in the balance of plant business in the country, and they're leading the team. And already a lot of engineering work has been taken up. October is the zero date, and we in fact, out of 38 month, 38 month schedule, we would like to do it at a shorter cycle time. Based on the drive and the inputs, we can drive it.
Already a lot of initial action has been taken in engineering, and also some ordering has been done in the key packages in coal handling, ash handling, and cranes. Most of the balance ordering should be completed by April, May, key major orders. That should help us, and already site work have already taken up. Therefore, this is the main aspect of the two businesses we have recently taken. Now coming back to the major business segments, sorry. Power sector continues to drive the business, and as we have seen almost 66% of the business is in the power, power sector driven. Now looking at the you know investments coming in the way, Adani Group is a major player in terms of the capacity addition and ordering.
If you look at the last two years and plus, where the continuous flow of, you know, investments are coming up, and then the key players like BHEL and L&T are getting the order. The major players in this segment are the, Adani, which has, has got a profile of 24,520 MW of ordering, and substantial ordering they have done. And then NTPC is about 12,300 MW. Other key players are, Damodar Valley Corporation, and then Mahan, Koradi, then, Singrauli, where recently we have taken the, BOP job, and then various electricity boards. Altogether, the capacity, ordering, which has been done in the last two years, it has gone up to 54,740 MW.
These two players are the main beneficiaries in terms of the EPC and the ordering aspects, and both is of interest to us. Only the BHEL, with a total ordering of about 37,140 MW, they have got nearly INR 200,000 crore of orders over the last two plus two years. L&T has come back into the play, as we have brought out earlier also. Apart from the Nabinagar and Gadarwara, where they have taken from the NTPC two key main plant orders. Adani has diversified the ordering, apart from BHEL to L&T also in four projects in Assam, Korba, Korba, and then new projects which are to be identified.
That is helping the L&T profile for about 12,800 MW, with a order booking of INR 42,523 crore. Therefore, these two players are going to play a major role, and BHEL is a key customer for us, and our excellent relationship from the point of view of performance, consistent ordering on us, we continue to expect orders from them. And then Adani has been an important part of our business growth, and substantial ordering also is there.
The current status is that, as on today, out of this 49,940-some aspect of the work orders, this 1,000 MW, nearly about 12,900 MW ordering has been completed by BHEL, and balance tendering is of 24,000 MW. And then tendering balance by Adani is about 18,400 MW, and that transfers up to opportunities of +60,000 crore in various sectors. That is in the contracts in the terms of civil, structural, mechanical, and then associate auxiliaries. And that should help us to continue the growth profile in the power sector business next two to three years.
Now, one more aspect, if in this capacity addition of what is going to be, what has been ordered is that these opportunities will also drive the O&M, which I expected 8,000-10,000 MW of commissioning every year. Of course, last one or two years, there has not been much of progress. This year, about +4,000 MW have been added to the grid. Even though the Central Electricity Authority has kept a target of 16,000 MW, there can be some shortfall, but our expectation is about 8,000 MW-10,000 MW on average should be added. That should help us to get a O&M profile of roughly INR 10,000 crore in the next 5-7 years.
That means apart from the existing O&M profile, these are the new ordering, which will, which will happen, and that will increase our O&M presence in the market. Now, the key sectors of the business, as I told you, apart from this one, there are opportunities in the infrastructure, railways, roads. And then another aspect we are trying to look at is the mining and material side. NMDC is coming with an investment of for a 50 million ton extra additional iron ore capacity. Then Steel Authority is having investment profile of more than INR 100,000 crore.
We have already started participating in these tenders, NMDC, for their two mining projects. They have called tenders for about 30 million tons of capacity addition in the iron ore, then 20 million tons tenders we are participating. And then IISCO Burnpur, part of the Steel Authority of India, has got an investment of about INR 45,000 crore, and there are about two jobs we have. At present we have quoted for about INR 2,200 crore, and there are other opportunities also expected. Therefore, on the mining side, steel side, and then O&M side, we continue to expect the opportunities. As I said, on the power sector itself, there will be 1,200 additional opportunities across every year, apart from the renewal of the projects which will take place.
That should substantially increase the O&M profile. Then the organization is also quite geared up in terms of resource management, in terms of capacity building, and then, you know, training of the people, and then handling the higher market size of the O&M business. And we have the manpower strength has gone up based on the business requirements from 40,000 in the beginning of January 2025 to, by December 2025, it has reached almost 48,000. And O&M continues to play a key role in terms of about 18,000 skilled engineers, supervisors, technicians, and operators with very high skill-based control room operation, field operation, field management. These aspects have been taken up.
The important things of the O&M is that we are a leading player, with a we have reached a profile of about 75,000 MW. And recently, about 4,000+ MW also, the additional jobs we have taken from Vedanta Group, and that will add to the profile. And the key aspects in this is our consistent performance with reference to the availability guarantees, 90%-95%, auxiliary power, auxiliary power capacity, meeting their parameters, and then specific fuel consumption. These are the most important things for driving the higher margins for the owner. The better these parameters are maintained, better is the availability and also generation, and that is how the renewal of the O&M order also comes regularly in the O&M sector.
Therefore, as the balance immediate opportunities, we are targeting about INR 4,500 crore to see that how much we can meet our target of INR 10,000 crore in the current year, mainly from Adani, BHEL, and possibly a few other O&M orders. Then, the continued investment, I think recently we have seen, Government of India is planning a capital investment of INR 1,250,000 crore in the infrastructure and other sectors, up from more than INR 1,000,000 crore. And that should open up a lot more opportunities in the coming year also.
We continue to depend on these type of new investments from EPC players like BHEL, and then customers like Adani, and then all our valued customers in the power sector and also infrastructure in railways also. Investment is there, but the competition seems to be pretty high, and same is the road sector. Therefore, that is based on what we would like to take it, based on our capacity to handle it, and also our interest in how much margin we should keep it up. Then, the metros are also growing up. Therefore, company having diversified long back from the power sector to non-power sector, with about 35%-36% in the non-power sector, that growth remains consistent. We continue to drive on these new capacities and also opportunities. Thank you very much.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Pritesh from Lucky Investments. Please go ahead. Pritesh, you can go ahead.
Yeah, hi. Sir, just a couple of questions. One, on this INR 17,000 crore backlog, you know, you always have a fairly strong backlog and additional orders. How much of this INR 17,000 crore is where the execution is slow, and, what are the challenges there? And if you look at your execution for the first nine months, you know, vis-à-vis the accretion in backlog, the execution is slightly weaker. So maybe you want to call out some comments on these two areas, please.
Yeah, out of the INR 17,000 crore order book, so the execution challenges are not there. Mainly, some of the new orders we received during the last year, there were delays in the starting of the project because of the extended monsoons during the last Q2 and Q3. And some of the projects like Kaiga, where extended monsoons, and Vijayapur is one project where environmental clearance issues are there, so there are delays in starting the projects. And we expected Yadadri township project also expected some major revenue in Q2, but due to rains and delays in the starting of the projects, impacted the projected revenue. Apart from there are no challenges, all the order book, what existing INR 17,000 crore order book is executable order book. There is no long-pending order book in this.
Does this still include the MDO order, or this excludes now the MDO order in the INR 17,000 crore?
Sir, we have removed this last financial year itself for INR 1,260.
Okay.
Crore of MDO order.
Okay.
This is without MDO order.
Okay.
Only INR 936 crore of GDP project only running in the MDO.
Okay. And, you know, on the, the new areas that you've taken, that is Balance of Plant order or a BESS order, or all the new areas now, you know, here, what is the margin profile, and have you compromised any margins?
Sir, the BOP EPC is new line where we were planning to enter into to scale up our operations to expand our scope of execution from under construction activity to the EPC delivery, EPC delivery in BOP system. In BESS, actually, we, Power Mech has been in the forefront for India's energy growth story, and we do not want to miss the energy transition phase as well. So we have found a 100% subsidiary as a PM Green for this, and this is a small attempt we to see where the renewable segment fits into the Power Mech's vision of sustained growth and margins. We are cautiously optimistic about this segment, and we will have.
So we are investment of around 16%-18% IRR. We are anticipating on this projects on equity investments.
Ramaiah here. Regarding the Singareni, I think what we have to also look into is that the synergy the company brings about in the execution of a, on a backward integration basis. As I said, you know, we are strengthened with a very strong engineering team, engineering and project management team. And more than that, the in-house value addition is substantial, compared to other BOP players, where they have to outsource everything. Because of our capacity in, different segments and site execution, civil comp is almost, 25% of the, total segment, and then installation work, services job. And then, some of the other, local sourcing, all these, supply chain management, we'll be able to do.
More importantly, there is a provision of a advance which helps a working capital management, and the retention is only 5%, which relies, which can translate into better cash flows. And then escalation provision also, which co-compensates for the any variation in the prices. Therefore, and then the nearness of the site for better access and execution. Therefore, the basic strength, as I said, is on in-house capability, substantially in execution and outsourcing, and that should help us to see this project is done properly and also reasonable margins.
So my last question is on the revenue side. So what growth do you expect now on, the full year number? And the MDO business, what is the profit now expected next year? Don't give us for this year, but next year, what is the profit expected out of MDO? And what is the revenue growth, on the, contracting side expected?
Revenue growth this year, maybe at 17%-18%. We may try to touch even 20%, sir. We are targeting 20%, but may touch at 17%-18%. And the margins of MDO is concerned, the second mine, KBP Mines, just started the revenue generation, and we touched INR 41 crore for one and a half month of revenue in the Q3. And Q4, we are projecting around INR 100 crore from this KBP alone. And, overall, we may touch around 15%-16% during the current year. And, next year, the production ramp-up will happen in the KBP mining, and our washery and Parsa will be ready by December, so only one quarter only we'll operate with full capacity.
The ramp-up will happen from 2028 onwards, the major ramp-up in the margins, but next year we may touch around 16%-17% range of average EBITDA we can expect from the MDOs.
Thank you, sir.
Thank you. The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Hi, good afternoon, sir, and thanks for the opportunity. My first question, the revenue guidance, sir, I think we had given revenue guidance of INR 6,500 crore, if I'm not wrong.
Correct.
Are we on track to achieve that, or is it, are you guiding a lower number now?
Yeah. Out of INR 6,500 crore, we projected almost INR 700 crore from the UP water division revenue. But in as per to revise this guidance to the INR 6,200 crore, INR 6,100 crore-INR 6,200 crore level. And now, based on the still nine months of growth trajectory, 17% growth, we may touch around INR 6,000 crore because now Singareni has also started billing. Now we are, we're hoping that now top line may surge by another INR 100 crore from Singareni, and we will. And again, the mining also ramp up happened, so we are expecting around INR 6,000 crore we may touch this year.
Understood. What was your mining revenue for the last nine months?
Sorry? Um.
What was the mining revenue for the last nine months, and how do you think it will shape up in FY 2027 and FY 2028?
This is last quarter, we touched almost INR 41 crore we recognized from KBP, and INR 29 crores from Parsa. Expecting maybe by next quarter, INR 100 crore from KBP and INR 30 crore from [KTPMP]. So INR 130, we may touch around INR 250 crore-INR 260 crore this year overall.
How do you think about F 2027, F 2028, given the progress?
2027, we touch around 600-700 between, depends on the scale up of operation, KBP, and the likely uptake of client. And FY 2028, we may touch around 1,800-1,900 with escalation value.
If I remember correctly, I think there was some washery or something was, I think, pending for Tasra, right?
Yeah. As for the timeline, we have to complete this by this December end. So we are on the track now. All the activities at the washeries are undergoing under process, and so we are hoping that by September, we are targeted to complete the washery, and by December, we'll be ready with our washery.
Understood. My last question is on the prospect list, especially for the coal EPC. Of course, there are a number of coal projects which are, I think, construction has started. Do you think that, of course, compared to the fiscal when it started in April 2025, are you seeing the prospect list getting bigger? And are you getting more confident for FY 2027 order inflow from this coal EPC/BOP?
Yeah, I think, BOP is going to be an opportunity. Three more projects are expected, because actually, BHEL has got a lot of in-house capacities, filled up. And, they are also trying to see that, outsourcing is a better option, and with the very capable parties like Power Mech and all, who are strong on execution. Because BHEL's problem is in execution, and then, that is how they would like to balance it. That is, we are expecting, three more opportunities, maybe another, nearly INR 7,500 crore-INR 10,000 crore of opportunities, but it's a question of call, we have to take it on that BOP. But what is expected is that in other sectors also, similar opportunities are expected to come in EPC, in mining and mineral sector also.
As I said, about MDO is on a good basis, and then, the steel business also it is there, and then, infrastructure. Therefore, this company has a base on the order basis can develop, you know, we are quite confident couple of projects we can handle it because of the in-house synergy available.
The private thermal EPC, do you think, do we have a chance to take those opportunity?
Yeah, that is, it is again, it is a competition, that depends on how do we position ourselves based on our interest and also the margins we have to keep it. And, more than that, the number of players or competition can also be less in this segment, for BHEL, maybe, two to three players. Of course, recently, the thyssenkrupp has entered in a big way. They have taken a couple of jobs in Koradi, Raghunathpur, et cetera. Because of, every organization, they approach the BOP, they, have their inbuilt strength like thyssenkrupp on the coal handling. That is how they are entered, and, that is a qualification for them also. And, for us, our execution capabilities, that is how, it can be. But, it can be maybe three, four players maximum.
So my question are more of the likes of Adani, Torrent Power, JSW. Adani, of course, the pipeline has only ballooned, and I think we are working with Adani in number of projects. So does that part of piece, do you think that is a very large prospect, and you can get some meaningful order inflow in the next 12-18 months?
Yeah. Adani's basic philosophy of outsourcing the supply chain management is that, you know, they try to in-house manage their engineering and supply chain orders. Now, unless BHEL, like BHEL, which has come to the stage of ordering more on the balance of plant and on a turnkey basis, Adani still, you know, keeps those engineering in-house, and they have got a strong support system from consultants. And then key supply orders, they have got a very strong supply chain in major equipment like in the coal handling, ash handling, water systems, electrical and sanitary systems. And they would like to outsource it to the extent possible on the execution side, strongly. And that is where, you know, we are the preferred vendor for them.
We have got a strong relationship with them, mainly depending on our performance only. In fact, our presence in Adani is substantial. As I said, you know, it is coming to Adani, it is more than 2,500 MW, close about 7,500 MW we are working. And, in the case of BHEL also, it is a similar theme. Therefore, as I explained earlier, Adani's ordering balance backlog is there. We continue to work with them. And, recently also, we have made some more quotes for some of the jobs in Mahan STPS, and then Amarkantak, et cetera. Same thing with the JSW also.
Understood, sir. Thank you and all the best. Thank you.
Thank you. The next question is from the line of Rishab from Nexus Securities. Please go ahead.
Hello, am I audible?
Yes, sir.
Thank you for the opportunity. Actually, I just wanted to ask about the revenue guidance for FY 2027, and how, why you revised the guidance for FY 2026 from 65 to 6 months?
Yeah. So, FY 2027 guidance, revenues and we'll come with the guidance after the full year. But based on the order book, so far, we are on the course to achieve at least 20%-25% growth. And also improvement in the margin profile depends on the mix of random and increase in the MDO order. So we are confident of getting on the last, the financial March number, on that 20%-25% growth we can project for the 2027.
And at 2026 guidance, we projected INR 6,500 crore, as I earlier explained to Mohit also. INR 700 crore of revenue we projected from the UP water division, where because of Jal Jeevan Mission, where the central government funds were not allocated and bills were uncertified, because of that, we have not received any, recognized any turnover during the current year. That impacted the guidance of 2026. So which we are mitigating with the increase in the new orders and other alternatives. So even there is INR 700 crore shortfall, but we are managing INR 200 crore-INR 300 crore extra by way of doing extra revenue from the other new orders.
Now, coming back to what Arvind said, with the present backlog of INR 17,326 crore, if we take the normal conversion margin of about 40%, you know, it should reach reasonably INR 6,000 crore-INR 7,000 crore. That is a fair game, plus what we expect to get in the first two quarters of the next year. And that is how the revenue gets fixed up. That's why there can be growth also, like, this year we had a growth from 5,500 to 6,500+ . The same growth is also expected in the coming year also.
Okay, sir. Thank you.
Thank you. The next question is from the line of Amar Ahir from Radin Capital. Please go ahead.
Hello, sir.
Yeah.
Can you help me with the geographical mix of the order book, you know?
Yeah, I think, coming to domestic and international, it is 95% domestic and 5% international. Let us look at the investments where they are taking place. They are taking place in North and east, and to some extent, south and west also. Therefore, I don't have the exact figures for the breakup, but our substantial power plant works are mostly going in the eastern side and northern side, and to some extent, on the western side also. Where the infrastructure is spread all over the country, it's a question of where we are going to take the call.
Railways and then roads, we are working in, for example, in Chhattisgarh, we are working, in Andhra , we are working, in Tamil Nadu, we're working, then Maharashtra also, we are working. And then, UP, for example, Jal Jeevan Mission, we are working in the UP. That is an opportunity wherever it is available, based on the selection of the projects and our interest on that, we are taking it. As far as geography is concerned, Power Mech has got one unique strength. We are capable of executing the job even in the eastern sector also. That is how we have seen a strong presence in eastern sector recently. Now we are trying to look at the opportunity in Assam also. We have got an experience working in Assam also.
It's not a challenge for us to say Singareni is there or Orissa is there, or Bihar is there. And all these places, we have, we've got a substantial presence in working.
Okay, sir. Got it. And could you help with the power breakup for the INR 17,000-odd crore across erection works, O&M field works, electrical?
Around, roughly around INR 3,000 crore are with Power Mech, ETC business. Civil is around INR 9,100 crore, that includes all water, sand mines and mining. O&M business of around INR 2,500 crore, electrical, INR 1,000 crore, and solar, INR 159 crore, and BESS, INR 1,560 crore.
Okay, sir. That's all from me, sir. Thank you so much.
Thank you. The next question is from the line of Devang Shah from Allwest Investment Managers. Please go ahead.
Yeah, hi. Good morning, sir. You know, I just want to know the way you are anticipating next year, what kind of, you know, your order inflow we can expect, in general, and also on, NBO business also, if there is anything, for the FY 2027.
Yeah. Now, looking at the opportunity side, as on today, we have mapped opportunities of about INR 130,000 crore-INR 140,000 crore. Of course, the balance opportunities just starting about INR 3,500-INR 4,000 crore in the, in these two months, and we are vigorously following that. That is spread across, different sectors, different sectors it is spread across. And, therefore, power sector will continue to a, a major role, and then railways and infra. Railways and, roads. And then O&M also, there should be more opportunities coming up with more plants getting commissioned. And then, and then, in also in the ETC business, we have seen, as I told you, the total opportunity size in the, contracts on power sector itself is +60,000 crore.
We hope substantial portion will be ordered, based on the, how much is the, push comes from the BHEL side. BHEL has to do a lot of ordering, and then Adani is doing timely ordering. And then, we have not, we are waiting for the actions of L&T also, about INR 42,000 crore. Of course, our, my, my, our interest is in the site construction execution, EPC. That we have identified INR 60,000 crore in, item rate contracts, and around, INR 9,000 crore-INR 10,000 crore in various, BOP contracts.
So maybe around INR 10,000+ crore only we will look at, sir, next year as a guidance on the order inflow is concerned. Regarding MDO is concerned, this year we'll touch around INR 250 crore turnover. And, second, Tasra and also washery will be ready by Q4 of 2027. So we are projecting around INR 600 crore-INR 700 crore of revenue from the MDO group together.
Okay. So it's fair to assume INR 10,000 crore in normal, your, in your business, we may expect this, this kind of opportunity, you know, as an order inflow for the FY 2027. That is bare minimum level. Am I right, sir? Am I understood correctly?
Right. Right.
Sir, sir, as far as the CapEx is concerned, you know, what would be your current month, current year, FY 2026, the CapEx, that is, you know, trajectory is going on, and, looking forward in FY 2027, you know, what kind of CapEx you are looking for?
Yeah. Right now, the regular CapEx in Power Mech is only INR 100-INR 120, depends on the order inflow, regular CapEx. And washery we are constructing in our books, so around INR 280 crore this year will cap. Approximately INR 280 crore will incur, and the next year, maybe around INR 400 crore. Total INR 680-INR 690 crore of CapEx will incur in the, on the washery itself. So INR 380, you can take the current year and INR 520 crore next year.
Next year, you are saying INR 480 crore, right?
This, FY 2026 by March, you can take roughly INR 300 crore out, cash outflow will be INR 380 crore in advance form, but that will be booked as a CapEx, post receipt of the material. So overall, this year and next year together, around INR 690 crore-INR 700 crore as a washery cost in our books. And, INR 100 crore-INR 120 crore, on an average on the regular CapEx, the cranes and the vehicles.
Okay. And, sir, the way we are, you are saying, you know, now the MDO business has also started to, you know, contributed in the revenue, and FY 2020 onwards, it is going to have a significant contribution. So, you know, currently we are having some kind of, you know, operating margin, somewhere close to 12%, and you are saying there is some kind of improvement we are going to see in FY 2027. So what kind of number we can expect in as far as range is concerned about 12%?
Yeah. So we're starting with 0.25% marginal EBITDA jump, and after that, year-on-year will be 0.5% jump till we reach the peak rate capacity. By 2029 onwards, you will get peak of 13.5%-14% EBITDA margins.
So somewhere close to, you know, 12.5%, we can expect from initial level?
So last year it was around 12.3% level, and we will maintain maybe 0.25% extra. Maybe this year we will maintain at 12.5%. Hoping that this will maybe increase of 0.25% year-on-year, and once we are ready with our washery by 2028 onwards, maybe 0.5% jump will be there in the margin.
Okay. Okay. Thank you, sir. Okay.
Thank you. The next question is from the line of Rajesh Kumar Rathi from Right Shopping Private Limited. Please go ahead.
Yeah, hi. I'm not sure if somebody has asked question before I was late to join. I have questions regarding the new labor laws. Industry sources are telling me that post-implementation of the law, especially for the contract labors, the cost can go up by 8%-12% because of the PF and ESI matters, et cetera. Do you concur with that view?
Yeah. Yeah. No, it is an important point what you have raised, sir. You see, minimum wages is a government prerogative, but most of our contracts are also tied up with the minimum wages as part of the price variation.
Right.
And that should reasonably offset the increase in terms of covering up any increase of cost and all. Any such type of statutory variation, the government notification, if the provision is not there, it becomes a matter of issue. Previously, it has happened in 2018, 2019 also, similar problem came up. Finally, government settled it, and most of the contractors, public sector companies, and the private companies also started implementing it. That means.
Mm-hmm.
The variation was allowed, and finally, we got the compensation. Therefore, we, we don't expect any impact on that because it is fairly covered in the contract provision itself, because we put a very specific thing. Our prices are quoted based on the existing minimum wages and any variation. That means, except for the normal variation in terms of the PVC or the price indices, the ad hoc revisions made by the government, it is subject to a variation clause. For that way, we are confident it can be covered.
So change in the clauses will kick in, sir. We can claim with the client on the difference of cost. All the existing contracts, we can claim, but for the new contracts, we can load the additional cost, and we can submit our tenders.
Yeah, of course, for the new contracts, you can do that. But what about the MDO and, you know, non-government contracts? I don't think, you know, they generally accept that labor cost increase clause, et cetera.
So there, my clients is Steel Authority. I see EPC contracts for me. It is not a investment case for me. So the Steel Authority and Central Coalfields will compensate that PVC clauses are there in that, so in that they'll cover this issue.
No, these ad hoc prices, they will still be covered in the MDO contracts for the.
Yeah.
Because, you know, the prices at which it was quoted and taken based on the conditions existing or the whatever the levels of pricing were available for the minimum wages. If there is a substantial variation as a government directive, that is subject to contract variation.
Part of this pricing, sir, in the MDO contract, labor indices are also part of that escalation clause, so they accordingly.
Oh, I see. I see. So you don't expect any dent on the EBITDA margin?
Yeah. So majority of our projects are construction projects, so they are not into EPC engineering and all. So majority covers all the escalation clauses. Almost 75%-80% of our contracts, BOP is covered by this.
Oh, yeah.
Then, variation or the adoption resolution is also a matter of basic or contract offer.
So you don't expect any dent on the EBITDA margin?
It will not have any dent, sir, but for the company employees, where you'll have marginally, we have to shift the.
Yeah, yeah. That, that's a one time.
That's a one-time, and there's a [crosstalk] probably created this quarter.
What about production slowdown or some disruption? Because I'm told that this contract labor thing, you know, a lot of paperwork has to be done, et cetera. So will it slow down the process a little bit for a couple of months or so?
No, I think some of the labor contractors are demanding some other additional benefits and all in, so for that purpose, they are fighting. I don't know. Government is already looking into that, and if any changes are there, it will, it will not have no impact on our financials. It will impact the employer's financials.
Every four years, there is always a case for the contractors and labor people to start for a rise in the minimum wage, basically.
Yeah, because I am told there is a ban today, due to all this, by this contract labor group, et cetera.
That is by the farmers against two years trade agreement.
Okay. Okay. Yeah, that's all from my side. Thank you so much.
Thank you. The next question is from the line of Itali Shah from Shriram Mutual Funds. Please go ahead.
Hello. Yeah, I wanted to know the breakup of the order inflow, the INR 6,700 crore in the various segments of mechanical, civil, O&M and all?
Mechanical is around INR 1,600 crore, ma'am. INR 2,063 crore from civil, O&M INR 1,097 crore, electrical INR 280 crore, solar INR 159 crore, and BESS INR 1,560 crore. This comes around INR 6,761 crore.
Thank you.
Thank you. The next question is from the line of Mudit Bhandari from IIFL Capital. Please go ahead.
Hi, sir. Out of total order book of around INR 17,000 crore, what's our pending order book for JJM, UP? And have you done any execution within this 3Q or nine-month FY 2026?
The pending order book is INR 1,000 crore, sir. We are not executing. We are executing only the O&M projects, where 100% completed projects, we are bringing these projects into the O&M phase. So 250 schemes, which we have converted so far, and we were going to start building this from Q4 onwards. The existing pending works, till the clarity from the government on the allocation of fund, we will slow down the execution of these works. Only to bring the projects into the O&M phase only, the balance minimum requirements only, we are increasing funds and we are using.
And that to this year, we received almost INR 140 crore from the Q1 to till YTD. Around INR 140 crore we received from the state government. Another INR 100+ crore , we are proposing, the file is pending before the Chief Minister, so we are expecting another INR 100+ crore by before March.
Got it, sir. And regarding our EPC of BHEL, Singareni, so you said around one-two months you will do procuring, so it will start execution in start FY 2027, right?
Sorry, which one, sir? Singareni. Singareni, we actually started executing, sir. INR 100 crore we are expecting this Q4 revenue.
Okay. Okay, got it. And regarding BESS, so when do we expect to achieve financial closure?
This actually we have as per the agreement, nine months' time is there from the date of agreement. So this, mid of this month, we are signing the agreement, so we have nine months' time after that to close the financials.
Agreement is by.
Okay. Mid of.
Okay, okay. Got it, sir. Thank you so much.
Thank you. The next question is from the line of Bhagwat from Prosperity Wealth Management. Please go ahead.
Thank you for the opportunity. Most of my questions have been answered. Just two more points I wanted to understand. Number one, what is the expected peak borrowing and the corresponding interest rate, considering the MDO segment also peaks by FY 2028 or FY 2029?
Okay. We are majorly, our borrowing is only the working capital limit so far, and we have, equipment loan of INR 98 crore, and the balance is INR 700 crore are the working capital limits which we borrowed. Weighted average cost of the working capital is 8.5%, and our equipment loans, we are borrowing at 7.8%. So blend of around 8.2%-8.3%, the average weighted cost will be there. With reference to MDO is concerned, the KBP mine, we are raising term loan of INR 256 crore. We have not drawn that money. That raise, we are raising at 9.5%, policy fund loan. And washery also we are raising loan at 9.5%.
Okay. On total basis, what we can expect the total number of borrowings?
As of now, it is INR 833 crore gross debt as of December, sir. This will go up another INR 400 crore by next year.
Okay. Thank you. Okay, and, second question, what's the effective tax rate on the full year basis on consolidated numbers?
Sorry.
The corporate tax rate on consolidated book.
Yeah. This is 25% on the main company, and there are the increase in the corporate tax is mainly some of the sand mines are on LLP names. So LLP, where the tax rate is 35%, when we are consolidating that revenue, your average cost is coming is a high, higher side.
Can you please comment, like, can we expect around 28% or 29%? That's what we can expect on consolidated number?
No, it will come to 2.8%-2.9% average. 28%, yes, average.
Okay. Okay. Okay, thank you, sir.
Thank you. The next question is from the line of Amar Ahir from Radian Capital. Please go ahead. Amar, you can go ahead.
Hello, am I audible?
Yes, sir.
Just one last question. That, where do you see strong demand in across all your verticals?
Sorry, your voice is breaking, sir. We are unable to hear.
Your voice is breaking, Amar.
Is it fine now?
Yeah, now better.
Yeah. I was asking that, from which vertical of yours do you see a strong demand going ahead?
Power sector is the major vertical, where we are going to get new orders from the power sector.
Wind farm.
Wind farm also, wind farm, power. And now we are venturing into the wind farm of non-power also. Recently, we won the monorail project of Bombay. We are yet to receive the order. So we are majorly expecting orders from the power side.
Okay, sir. Thank you so much. That's it.
Thank you. We'll take the next question from the line of Vedant Kabra from AVN Capital. Please go ahead.
Hi, ma'am, am I audible?
Yes, sir.
Yes, I just have a follow-up question on the labor laws. Just to estimate for the worst-case scenario, assuming the labor laws go into full implementation, do we have a quantifiable EBITDA margin impact?
Our labor component of the total cost can be about, say, in the service jobs, it is 50%-60%.
Okay.
50%-60% for our people, service installation, wind farm, et cetera. Whereas in the material-based contracts, it will be less. But absolute figures cannot be there, because, you know, we pay to the contractors based on the item rates or the fixed rate, and, the actual values on which the labor payments are made is, we don't have a specification on it, but on a broad basis, we know that.
We have a limited impact on these rate variations because of the PVC clauses and minimum wages already we are implementing, so there are no much impact from the government.
So just to assume, let's say, the cost goes up by somewhere between 8%-10%, in that case, what will be our EBITDA impact?
That's right, sir. We can claim the PVC from the client, so our revenue also will go up. The compensation will come from the client, so we'll pass that compensation to the subcontractor.
Okay, this is true for even the locked-in contracts?
Yes.
Okay. And sir, just last question: What is your current understanding on this implementation timeline of the labor law codes, especially across the states in which you are operating?
There are certain, they actually, it is applicable from April. Certain people are saying it is applicable from certain, April onwards, first April onwards.
Okay.
But the act is already announced in the month of November. We are creating provisions in the Q3 itself for the existing liabilities in the books, and actual implementation will be from first April, so there are various interpretations are there. Now, we are seeking clarification on that, but with effect from first April only, generally, the government will implement this.
Okay. Thank you so much. That's all from my side.
Because there are rules to be framed from the government side, so there is a delay.
Okay, noted. Thank you.
Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing remarks.
Yeah. Thanks for the participation from you, and thanks again for your time. I think looking at the what we can say is that a reiteration of the profile of investments, government is bullish on investments, so private sector is coming in a big way, mostly in the power sector also. Power sector capacity expansion will go up from, say, it will go up to 320 GW. Maybe earlier, they were planning 80 GW addition from 220 GW, they may go to 320 GW. That will add, as on today, I told you about 55,000 MW-60,000 MW have been added. And then some more ordering will come up because the projects which are in the pipeline development is about 35,000 MW-40,000 MW.
Therefore, this will happen in the next two years. And then, of course, nuclear power, we have to see because their present capacity of 9 GW, it will go up to 20 GW. And battery storage, where we entered recently, you know, government is very bullish on that. Battery storage, pump storage, they want to increase the capacity to battery storage to 47 GW by 2031, 2032, and pump storage from 4.75 GW to 18.8 GW. In fact, we are looking at some of these opportunities of pump storage. It brings on the synergy in our working system on the civil and the electromechanical packages, and we are discussing with some of the players also on that. Therefore, then wind farm, as I said, you know, the increased capacity addition of 8,000-10,000 MW.
The add-on, approximately about 1,200, 1,500 crores. That will be, every year it will be adding added. It depends on how much we can capture that and who are the customers we'll be taking to have that wind farm in-house or outsourcing completely. But that is how, we are there looking at it, and, we hope that next year also we'll have a growth of 20%, 25%.
Thank you very much. On behalf of Nirmal Bang Equities Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you.
Thank you.