Buy Kalpataru Power Transmission; target of Rs 485: Sharekhan

Sharekhan's research report on Kalpataru Power Transmission

Kalpataru Power Transmission Limited’s (KPTL) steady performance in Q3FY2021 results despite challenges. Order inflow remained healthy during Q3FY21 and order backlog remains strong providing 1.7 x TTM standalone revenues. Management expects better revenues y-o-y with stable margins for FY21. It expects double digit growth with stable margins in FY2022. Order inflow to be in the range of 9,000-10,000 crore in FY22E. Expecting deal closure for the sale of its third project Kohima Mariani Transmission in Q4FY21 or else by Q1FY22 which would further deleverage its balance sheet.

Outlook

We maintain our Buy rating on Kalpataru Power Transmission Limited (KPTL) with a revised PT of Rs. 485, rolling forward our standalone valuation multiple to FY2023E.