Buy Kalpataru Projects; target of Rs 1,385: Motilal Oswal

Motilal Oswal's research report on Kalpataru Projects

KPIL, in its annual report, emphasized its strategy to strengthen its presence in existing geographies by tapping into large and complex EPC projects, diversify into newer geographies and foray into newer businesses such as data centers, airports, tunneling, urban mobility, hydrocarbons, etc. The company continues to be a key beneficiary of the domestic and global upswing in upgradation and expansion of the T&D network, driven by increasing urbanization, electrification, and the shift toward cleaner sources of energy.

Outlook

KPIL is currently trading at 21.5x/15.7x FY25E/FY26E EPS. We maintain our BUY rating with an SoTP-based TP of INR 1,385, based on 17x P/E for the core business. Any further reduction in the level of promoter pledge will be positive for core business valuations.