Rs 472 Crore Order Alert! This Small-Cap Power Stock Wins Gujarat Contracts

Rajesh Power Services Limited has secured domestic turnkey contracts worth Rs 471.92 crore, including Taxes, from Madhya Gujarat Vij Company Limited for strengthening power-distribution infrastructure across Gujarat.

The contracts cover conversion of 11 kV overhead lines into Medium Voltage Covered Conductor networks and development of underground network infrastructure under MGVCL’s SI Scheme Robust-III. The company said the work is to be completed within 18 months.

The order value is meaningful in relation to the company’s operating scale. At Rs 471.92 crore, the gross contract value is equivalent to about 29 per cent of Rajesh Power Services’ consolidated revenue from operations of Rs 1,627.94 crore in FY2025-26, although the order amount includes taxes and is therefore not directly comparable with reported revenue.

The win also fits the company’s established EPC capabilities in distribution networks, underground cabling and MVCC projects. Rajesh Power Services provides engineering, procurement, Construction, commissioning, operations and maintenance services for transmission and distribution infrastructure, with government utilities forming an important part of its customer base.

MGVCL is a domestic entity, according to the company’s disclosure. Rajesh Power Services said neither its promoters, promoter group nor group companies have any interest in MGVCL, and the contracts do not constitute related-party transactions.

The 18-month execution timeline is broadly in line with management’s earlier commentary that most of its projects are executed over 18 to 24 months. Management had indicated that project mobilisation and execution schedules, rather than availability of bidding opportunities, would determine the pace at which its Order Book converts into revenue.

The contracts come after a year of strong financial expansion. Consolidated revenue rose 52 per cent year-on-year to Rs 1,627.94 crore in FY2025-26, while consolidated profit after tax increased to Rs 143.20 crore from Rs 96.63 crore in the preceding year. Management has previously reiterated an ambition of around 40 per cent growth for FY2026-27, supported by existing project visibility and a wider tender pipeline.

However, execution and cash conversion will remain important factors. The company’s FY2025-26 operating cash flow was negative at Rs 41.42 crore as receivables, inventory and other working-capital requirements increased alongside revenue growth. Rajesh Power Services has said that billing patterns, retention money and utility payment cycles can affect cash flows in EPC projects.

The company has also been pursuing geographic diversification beyond Gujarat, particularly through transmission opportunities in states such as Rajasthan, Maharashtra, Odisha, Jharkhand and Uttarakhand. Yet Gujarat remains the dominant source of its current order book, making the MGVCL award a further reinforcement of its core market even as it seeks a broader footprint.

As of 10:01 am on October 12, 2026, Rajesh Power Services shares were trading at Rs 782.95, up 6.84 per cent from the previous close of Rs 732.85. The stock was about 49.6 per cent below its 52-week high of Rs 1,554.70, while its one-year decline of 49.98 per cent compares with a 6.29 per cent fall in the BSE 500 over the same period.

The key near-term milestone for the company will be timely mobilisation and execution of the MGVCL works, particularly as larger EPC order inflows can increase both revenue visibility and working-capital needs.

Disclaimer: The article is for informational purposes only and not investment advice.