Buy Kalpataru Projects; target of Rs 1500: Motilal Oswal

Motilal Oswal is bullish on Kalpataru Projects has recommended buy rating on the stock with a target price of Rs 1500 in its research report dated October 29, 2024.

Broker Research

October 31, 2024 / 12:33 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on Kalpataru Projects

Kalpataru Projects’ (KPIL) 2QFY25 revenue was in line with our estimate. KPIL reported a revenue growth of 8% YoY, while EBITDA/PAT grew 13%/17% YoY. Execution growth was adversely impacted by delayed collections from water projects, which is likely to improve following the state elections. The company foresees an annual pipeline of ~INR600b for domestic T&D projects in the coming few years. We expect KPIL to be a key beneficiary of the robust T&D pipeline across domestic and international geographies, buoyant outlook for B&F projects, and improving international subsidiary performance. KPIL’s focus on margin improvement, working capital management, and non-core asset divestment will augur well going forward. We cut our estimates by 6%/8%/5% for FY25/FY26/FY27 to factor in weaker-than-expected water segment performance; we roll forward our TP valuation to Dec’26E. We maintain our SOTP-based TP of INR1,500 based on 19x P/E for the core business on an improved prospect pipeline. Reiterate BUY.

Outlook

KPIL is currently trading at 19.7x/14.9x FY26E/FY27E EPS. We cut our estimates but roll forward our valuation to Dec’26E earnings. We maintain our SOTP-based TP of INR1,500, based on 19x P/E for the core business. Reiterate BUY.

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