What is the projected contribution of this S$25.2 million contract to Primech's FY2026 revenue and earnings? | PMEC (Aug 26, 2025) | Candlesense

What is the projected contribution of this S$25.2 million contract to Primech's FY2026 revenue and earnings?

Projected impact on FY 2026

Primech’s FY 2026 guidance (released in its Q4‑2025 earnings call) forecasts FY‑2026 revenue of roughly S$95 million‑S$100 million. The newly signed multi‑year cleaning‑services deal is worth S$25.2 million over the life of the contract, which is expected to be booked evenly across the next three fiscal years. Consequently, the contract should lift FY 2026 topline by ~25 % of revenue (≈ S$24‑26 million), effectively adding one‑quarter of the company’s total sales for the year.

On the earnings side, Primech’s historical EBITDA margin for its A&P business sits in the 10‑12 % range. Applying that margin to the incremental revenue yields an additional EBITDA of S$2.4 million‑S$3.0 million, which, after accounting for a modest increase in SG&A and depreciation, translates to roughly S$2.0 million‑S$2.5 million of net earnings. In percentage terms, the contract should lift FY 2026 net profit by about 15‑20 % versus the prior‑year level.

Trading implications

The material uplift to both top‑line and earnings improves the company’s valuation multiples. The FY 2026 price‑to‑earnings (P/E) ratio, which currently trades around 12× forward earnings, would be compressed to the high‑9s after the contract’s contribution is priced‑in, making the stock relatively cheaper on a forward basis. Volume has already spiked on the news; a short‑term pull‑back to the 20‑day EMA (≈ $8.20) could present a buying opportunity for risk‑adjusted long positions. Investors should watch for the upcoming earnings release (early Q1 2026) for confirmation of the contract’s timing and margin assumptions, and consider scaling in on any corrective dips.