Shares of Power Mech Projects rallied 20 per cent in Monday's trade after it along with a partner won an order with an estimated value of Rs 30,438 crore worth from Steel Authority of India Limited (SAIL). The order will be executed via a special purpose vehicle (SPV), where the Power Mech Projects would hold 74 per cent stake. The duration of the contract is 28 years, which includes two years of development period).
The stock rose 19.99 per cent to hit a high of Rs 5062.25 on BSE. The project, awarded to a consortium of Power Mech Projects and PC Patel Infra Private Limited, is for the development and operation of Tasra Opencast Project, located at Jharia Coal fields in Dhanbad District, Jharkhand.
"The scope of the MOO contract mainly comprises of mine infrastructure development including extraction of coking coal, crushing, transportation, setting up of washery and supply of steel grade coking coal to SAIL," the company informed stock exchanges.
In a separate release, the company said the contract will primarily comprise of mine infrastructure development, removal of overburden and extraction of coking coal, crushing, transportation, setting up coal washery of 3.5 MTPA capacity, supply of steel grade coking coal to SAIL, carrying out R&R activities and other activities incidental to mining asper the project document. The project has a total coal extraction reserves of 96.78 MT with an annual capacity of 4 MTPA and over burden removal during the project period is over 535.29 MBCM.
Chairman and Managing Director Sajja Kishore Babu said: This project will further strengthen our robust order book and enable the company to diversify its order book, which is in line with its strategy to have an optimum mix between power and non-power segments. This mine has all statutory approvals in place and it is a ready to mine project. The revenue booking can be started from FY24 onwards."
Babu said the project can add peak turnover of around Rs 1,200 crore plus escalation annually.
"With the revenue coming in from both the MOO Projects along with the existing operation & maintenance (O&M) business,we expect to witness sustainable growth both in top and bottom lines in the future for a longer period," he said.
Also read: Maruti Suzuki Q1 results preview: 120-160% jump in profit likely; margins to expand
Also read: Adani stocks: Adani Green Energy, Adani Transmission shares in focus ahead of Q1 results