Power Mech Projects: A mid-cap infrastructure company with significant exposure to the mining sector

Power Mech Projects is a prominent mid-cap player in the industrial services and construction sectors, with a particular focus on power and infrastructure.

Before we discuss this company, however, it is important to recognize the inherent risks that lurk in the midcap sector. Midcap companies, typically defined as those with a market capitalization between Rs 5000 crore to Rs 20,000 crore, tend to experience greater price volatility compared to large-cap stocks. This is due to their smaller size, which can lead to larger fluctuations in share prices based on market sentiment, economic changes, or company-specific news.

That said, mid-cap companies can also offer significant growth potential assuming the starting valuations are captured correctly. To that end, we also analyze Power Mech’s intrinsic value and discuss whether it’s overvalued or undervalued.

So let’s begin with discussing the company’s fundamentals, including (most importantly) its risks and challenges, and then followed by intrinsic valuation.