Multibagger Stock Hits 20% UC and 52-Wk High on Rs 30,438-Cr Order from SAIL

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Multibagger Stock Hits 20% UC and 52-Wk High on Rs 30,438-Cr Order from SAIL
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Shares of the leading infrastructure-construction company Power Mech (NS: POMP ) Projects hit a 20% upper circuit and a new 52-week high of Rs 5,069.45 apiece on Monday, significantly outperforming the overall domestic market mood.

Shares of Power Mech Projects have rallied 133.5% so far this year, and have skyrocketed 361.4% in the past one year, making it a multibagger stock.

The construction and engineering major has secured a Mine Development and Operation Project (MDO) order worth Rs 30,438 crore from the state-owned steel-producing giant Steel Authority of India (NS: SAIL ).

The Maharatna public sector undertaking (PSU) SAIL has awarded an MDO project to a consortium of Power Mech Project and PC Patel Infra Private Ltd for the Development and Operation of the Tasra Open Cast Project (OCP) contract located in the Jharia Coal fields of Dhanbad District in Jharkhand.

The contract worth Rs 30,438 crore has been awarded to Power Mech Project for a long period of 28 years, of which the development period will span over 2 years.

The scope of the MDO contract will majorly comprise 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 as per the project document.

“The project has a total coal extraction reserves of 96.78 MT with an annual capacity of 4 MTPA and overburden removal during the project period is over 535.29 MBCM,” Power Mech Projects said on Monday.

The contract would be executed through a Special Purpose Vehicle (SPV) with Power Mech Projects holding a 74% stake and PC Patel Infra holding a 26% stake.

The said project will further strengthen Power Mech Projects’ robust order book. This project can add peak turnover of around Rs 1,200 crores plus escalation annually, the small-cap construction company said on July 31, 2023.

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