Shah told CNBC-TV18, "Kalpataru Power Transmission earnings were about 15% below our expectation. This was largely caused because of delay in orders by Power Grid which started giving only in Q4. Also partly subdued margins in the civil construction business of JMC. We expect that from Q4 the performance will strengthen significantly. We reiterate the earnings in the next year should have a 28% growth."
He further added, "The main reason behind this is improvement in order backlog, which is currently at about Rs 100 billion. This is more than two times the current sales, and at about Rs 20 of earnings per share next year. The stock is trading at about 7 times at a price to book of 1.1 times. With a fairly strong balance sheet and debt equity of about 0.3 times the stock is very attractive. We think that the stock should rerate. Our target price for Kalpataru Power is Rs 187."
