Power Mech Projects Limited (NSE: POWERMECH, BSE: 539302) has been awarded a major EPC contract exceeding ₹2,500 crore by Bharat Heavy Electricals Limited (BHEL) for the Balance of Plant (BoP) package at the 1 x 800 MW Stage-II expansion of the Singareni Super Thermal Power Project (SSTPP), located at Pegadapalli in Mancherial district, Telangana. The contract spans 38 months and significantly reinforces Power Mech’s standing in India’s industrial EPC ecosystem.
This project is being developed by the Singareni Collieries Company Limited (SCCL) as an extension of its existing 2 x 600 MW facility. BHEL, the primary EPC contractor for the full power plant package, has subcontracted the critical BoP scope to Power Mech under a full turnkey engineering, procurement, and construction delivery model. The scope includes vital subsystems such as coal and biomass handling systems, ash management, utilities, induced draft cooling towers, water and effluent treatment systems, fire protection, associated civil and structural works, and all electrical and instrumentation components.
How does the Singareni Stage-II project align with India’s evolving thermal power strategy in 2025?
India’s energy landscape is undergoing a strategic recalibration as it attempts to simultaneously expand renewable energy capacity and stabilize grid operations with high-efficiency base-load thermal power. The addition of this 800 MW unit to the Singareni complex underscores the role of supercritical thermal plants in ensuring round-the-clock electricity for industrial and domestic needs. While renewables continue to dominate headline capacity additions, institutional energy planners are prioritizing “dispatchable” generation to mitigate intermittency concerns.
According to Power Mech’s Chairman and Managing Director, Sajja Kishore Babu, the contract reinforces the company’s commitment to long-term infrastructure development aligned with national energy security goals. He stated that Power Mech’s execution capabilities across large and complex projects continue to play a pivotal role in nation-building efforts. The integration of biomass handling into the BoP scope also aligns with the government’s push for cleaner combustion technologies and co-firing strategies.
What is the strategic value of this contract for Power Mech’s EPC book and growth visibility?
Institutional sentiment around Power Mech has improved in recent quarters due to its diversified project pipeline and expanding presence in infrastructure subsegments beyond thermal power. This contract from BHEL adds significant scale to its EPC book and enhances revenue visibility through FY27. The 38-month execution period ensures a multiyear earnings contribution, while the high-margin nature of BoP systems strengthens profitability expectations.
Power Mech’s ability to secure large-scale projects from public sector clients such as BHEL and SCCL also signals regulatory confidence in its compliance and quality standards. Industry observers believe that such high-value contracts could place Power Mech in a strong position to bid for future opportunities under the National Infrastructure Pipeline (NIP) and upcoming utility expansions across water, rail, and renewables.
How are institutional and retail investors responding to Power Mech’s execution pipeline and order inflow?
As of October 15, 2025, Power Mech shares traded at ₹2,785.00, marginally down by 1.31% in intraday movement. Despite the minor dip, the stock remains well above its March 2025 low of ₹1,700 and continues to consolidate near its 52-week high of ₹3,415. Market capitalization currently exceeds ₹8,800 crore, and trading activity has picked up on delivery-based participation.
The stock’s adjusted P/E ratio of 24.27 places it within the typical range for mid-cap infrastructure counters. Retail interest remains strong, while institutional flows are steady. Analysts tracking the company point to a mix of order book strength, sector tailwinds in thermal and O&M services, and robust management commentary as key factors driving long-term positioning.
What differentiates Power Mech in India’s competitive EPC landscape and how diversified is its revenue stream?
Established in 1999 and headquartered in Hyderabad, Power Mech Projects Limited is one of India’s few vertically integrated EPC firms with a global footprint. The company operates in over 10 countries and services a wide range of industrial segments including thermal power, transmission, railways, steel plants, oil & gas, cross-country pipelines, and civil infrastructure. Over the past decade, Power Mech has expanded its capabilities to include operation and maintenance (O&M), repair and overhauling, renovation and modernization, and turnkey project execution.
Its entry into high-complexity EPC contracts and non-power infrastructure sectors marks a strategic transition that helps mitigate the cyclicality of thermal orders. With significant exposure to railway electrification, urban infrastructure, and smart water projects, Power Mech is positioning itself as a full-spectrum infrastructure delivery partner under the National Infrastructure Pipeline (NIP) and other government-led mega capital expenditure programs.
How does the Singareni BoP package contribute to India’s larger industrial and regional development goals?
The Singareni TPS Stage-II project is expected to play a catalytic role in driving regional development in Telangana. By expanding grid-connected capacity in one of India’s coal-rich belts, the plant will improve industrial electrification, attract capital-intensive manufacturing, and enable more predictable supply to local consumers.
The inclusion of biomass handling infrastructure within the project indicates an intentional pivot toward cleaner fuel alternatives and carbon-reducing strategies. India’s Ministry of Power has set ambitious targets for co-firing biomass pellets with coal in existing and upcoming thermal plants, and EPC players like Power Mech are now expected to play an engineering role in enabling such hybrid configurations.
What are the broader implications of this award for the Indian EPC and thermal sectors in FY26 and beyond?
Thermal EPC players are witnessing a renaissance in FY25–26 as utilities look to balance India’s renewable ambitions with base-load reliability. Experts point out that while solar and wind will continue to dominate the capacity mix, thermal additions in the range of 25–30 GW are still expected under the 2030 roadmap, primarily using supercritical and ultra-supercritical configurations.
The current award cycle, including Power Mech’s contract from BHEL, reflects a realignment in project finance and vendor engagement models. Fewer but more capable players are being chosen for critical packages, and the role of BoP contractors is expanding to include digital systems, emissions control technology, and renewable integration. Companies like Power Mech, which offer in-house engineering and a diversified track record, are expected to gain share in this next phase of EPC consolidation.
What are the forward-looking growth catalysts and potential risks for Power Mech going into FY26–FY27?
Looking ahead, Power Mech is expected to target opportunities in renewable infrastructure, civil aviation, mining development-cum-operations (MDOs), and cross-border pipeline projects. Its ability to build on the current momentum will depend on disciplined execution, effective cash flow conversion, and maintaining low working capital intensity.
Risks include delays in government tender processes, cost escalations due to raw material volatility, and execution bottlenecks on brownfield sites. However, the company’s high execution-to-order ratio and strong compliance track record provide some buffer. Strategic alliances with public sector clients like BHEL also reduce receivables risk and provide regulatory comfort.
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