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Kalpataru Power Transmission an outperformer: Karvy
Karvy Stock Broking has downgraded its rating on Kalpataru Power Transmission from buy to outperformer with a target price of Rs 1030. Kalpataru Power Transmission Limited's (KPTL) reported sales in line with research firm's expectations at Rs 4,749.5 million.
Karvy Stock Broking has downgraded its rating on Kalpataru Power Transmission from buy to outperformer with a target price of Rs 1030 in its August 19, 2008 research report."Kalpataru Power Transmission Limited's (KPTL) reported sales in line with our expectations at Rs 4,749.5 million. This is a growth of 29% (YoY) and de growth of 25% (QoQ). Net profit declined by 22% (YoY) and 42% (QoQ). This is around 16% lower than our expectations. PAT for Q1 FY09, stands at Rs 290 million, reflecting a net profit margin of 6.1% and an EPS of Rs 11."
The report also says"We retain our valuation for standalone entity (KPTL) at Rs 940 per share (based on 12xFY10 earnings). However, we revise value for JMC projects (subsidiary with 52% stake) from Rs 100 per share to Rs 90 per share (based on 8x FY10 EPS), stemmed from the above mentioned revision in profit estimates in JMC. Hence, our revised price target for the consolidated entity (KPTL) stands at Rs 1030 per share, against previous target of Rs 1040. Consequently, we downgrade our rating from BUY to Outperformer. Our target price is at 6.7x EBITDA of FY10 against current 5.6x,"according to Karvy's research report.
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