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Power Mech Projects Limited (PMPL) is one of the leading industrial services and construction companies providing versatile and comprehensive services in the power and infrastructure sector. The company specialises in ultra mega power projects, super critical thermal power projects, and sub-critical power projects. PMPL recently has been awarded the biggest order of ₹30,438 crore for a mine development and operation project by the Steel Authority of India Ltd. The project will be executed by a consortium of PMPL and PC Patel Infra, with PMPL holding a 74 per cent stake. The company’s order book currently exceeds ₹55,000 crore, which is nine times higher than its current market capitalisation of over ₹6,000 crore. According to the Quarterly Results, the company’s net sales increased by 15.87 per cent to ₹865.13 crore, the operating profit increased by 22.5 per cent to ₹104.78 crore and the net profit increased by 21.36 per cent to ₹50.59 crore in Q1FY24 compared to Q1FY23. According to the annual results, the net sales increased by 32.86 per cent to ₹3,601.19 crore and net profit increased by 53.05 per cent to ₹215.46 crore in FY22 compared to FY22. The company is consistently generating sales and reported the highest-ever profit this year which is a good sign. At TTM, the company is trading at a PE of 29 times against the industry PE of 36.26 times. Hence, we recommend HOLD. 

Sterling and Wilson Renewable Energy Ltd. is a global leader in providing end-to-end solar EPC solutions. The company also offers operations and maintenance services for solar power plants and is backed by the strong parentage of Reliance Industries Ltd. (40 per cent). The company’s net sales and other operating income fell nearly by 60 per cent in Q1FY24 to ₹515 crore, compared to ₹1,207 crore in Q1FY23. The company also reported a net loss of ₹95 crore in Q1FY24, compared to a net loss of ₹356 crore in Q1FY23. For the full year FY23, net sales fell by a staggering 60 per cent to ₹2,051 crore, compared to ₹5,199 crore in FY22. It also reported a net loss of ₹1,175 crore in FY23 compared to a net loss of `916 crore in FY22. The percentage of shares held by the company’s promoters has decreased by 3.69 per cent since the previous quarter, and they have pledged 39.5 per cent of their shares. The shares have a negative ROE of 26.7 per cent and a negative ROCE of 8.37 per cent. The company’s liquidity position is impacted by the invocation of two bank guarantees, weak operating performance in FY23 and weak credit metrics in FY24. The order book improved to ₹49 billion, with expected operational benefits from the RNEL acquisition. However, the company faces exposure to raw material price volatility and project execution risk. Hence, we recommend AVOID. 

NBCC (India) Limited is a government-owned company under the Ministry of Housing and Urban Affairs. It operates in three main business areas: project management consultancy, engineering, procurement and construction (EPC), and real estate development. As of June 2023, the president of India held a majority stake of 61.75 per cent in the company. In the initial quarter of FY24, the company witnessed a 6.62 per cent rise in its consolidated net sales and other operating income, reaching ₹1,917.87 crore compared to ₹1,799 crore in the corresponding period of FY23. However, there was a marginal decline of 1.42 per cent in operating profit, with figures decreasing to ₹105.10 crore in Q1FY24 from ₹106.52 crore in Q1FY23. 

Impressively, the company recorded a net profit of ₹77.47 crore in Q1FY24, a remarkable turnaround from the net loss of ₹5.79 crore in Q1FY23, resulting in an EPS of ₹0.42. For the entire FY23, the company achieved a substantial 13.83 per cent increase in net sales, totalling ₹8,754.44 crore, up from ₹7,690.61 crore in FY22. Operating profit also saw a significant surge, rising by 37.53 per cent to ₹547.27 crore in FY23 from ₹397.91 crore in FY22. Furthermore, the company reported a net profit of ₹277.02 crore in FY23, marking a 16.44 per cent increase from ₹237.90 crore in FY22. 


The company’s market capitalisation has surpassed ₹10,000 crore, with a strong order book and consistent quarterly order wins. NBCC (India) is virtually debt-free, with only ₹27 lakhs of current debt and has a healthy dividend payout ratio of 44.4 per cent. The company has sustained growth in orders, providing medium-term revenue visibility. The company’s financial risk profile and cash surplus are also being sustained. However, the company’s quarterly sales and profit are not consistent. This is because the company’s business is cyclical and is dependent on the timing of large projects. Hence, we recommend HOLD. 

Genus Power Infrastructure Ltd. (Genus Power) is a leading Indian metering solutions provider and part of the Kailash Group. It was founded in 1992 and has since supplied more than 15 million smart meters to customers across the Asia Pacific region. Genus Power also offers engineering, construction and contracting services, as well as strategic investment opportunities. It was also the first company in India to obtain various certifications for its metering solutions, including DLMS certification for energy meters and BIS certification for smart meters. 
 

In the first quarter of FY24, the company’s consolidated net sales and other operating income increased by 39.6 per cent to ₹261.11 crore from ₹187.04 crore in the first quarter of FY23. The operating profit also increased substantially by 95.11 per cent to ₹47.50 crore in Q1FY24 from ₹24.34 crore in Q1FY23. The company reported a net profit of ₹87.15 crore in Q1FY24, up from ₹12.30 crore in Q1FY23, an increase of 87.15 per cent. For the full FY23, the company achieved net sales of ₹808.39 crore, up 18 per cent from 685.07 crore in FY22. 
 

However, operating profit decreased by 22.37 per cent to `92.37 crore in FY23 from ₹118.99 crore in FY22. The company reported a net profit of ₹28.97 crore in FY23, down 50 per cent from ₹58.39 crore in FY22. The stock is currently trading at a high valuation, with a price-to-book ratio of 6.65 and a price-to-earnings ratio of 109, which is significantly higher than the industry average PE of 48.6. The company’s return on equity (ROE) and return on capital employed (RoCE) are also low. While the company’s sales increased in the previous quarter, its operating margin declined. If the company can improve its margin and trade at a more attractive valuation in the upcoming quarter, then it may be a good investment. Hence, we recommend AVOID. 

Hindustan Construction Company is primarily focused on delivering engineering and construction services, along with involvement in real estate, infrastructure, urban development and management ventures. Established in 1926, it stands as one of India’s most enduring infrastructure firms, boasting a rich legacy in the industry. With its extensive experience spanning nearly a century, Hindustan Construction Company has played a pivotal role in shaping India’s infrastructure landscape. The company’s quarterly consolidated financial results for Q1FY24 indicate a 15.07 per cent increase in net sales and other operating income, rising to ₹2,564.83 crore from ₹2,228.92 crore in Q1FY23. 
 

In Q1FY24, the company reported a net profit of ₹11.55 crore, contrasting with a net loss of ₹2.71 crore in Q1FY23. Looking at the annual figures, for FY23 the company achieved net sales of ₹365.98 crore, reflecting a 3.31 per cent increase from ₹354.25 crore in FY22. However, operating profit decreased by 5.20 per cent, amounting to ₹96.30 crore in FY23, down from ₹101.58 crore in FY22. The net profit also decreased significantly by 80.19 per cent to ₹6.42 crore in FY23 as opposed to ₹32.42 crore in FY22. The company is engaged in solar and wind power projects with full-spectrum services. Its valuation looks expensive as compared to its five-year median PE. 
 

In the last quarter, sales dropped by over 8 per cent but the company has improved its margin. The Indian renewable energy sector is the fourth most attractive renewable energy market in the world. India was ranked fourth in wind power, fifth in solar power and fourth in renewable power installed capacity as of 2020. With the increased support of the government and improved economics, the sector has become attractive from an investor’s perspective. India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040. The company is poised to capitalise on the increasing demand for renewable energy in India and globally, indicating a promising future outlook. Hence, we recommend HOLD. 

(Closing price as of October 03, 2023)