PhillipCapital said it estimated healthy 19 percent CAGR in FY19-22 earnings backed by a strong order book.
Kalpataru Power Transmission shares gained 1.7 percent intraday on June 14 after global brokerage house PhillipCapital India initiated coverage with a buy rating and target price of Rs 670, implying 37 percent potential upside.
The research firm said the T&D equipment and infrastructure conglomerate is a unique play on key infrastructure sector segments, backed by a management that has consistently demonstrated its ability to incubate new businesses, expand margins, and manage working capital.
A major drag on KPP so far has been its capital deployment into asset-ownership and non-core diversification, which it believes should peak and reverse in FY21, leading to a substantial release of cash.
PhillipCapital said it estimated healthy 19 percent CAGR in FY19-22 earnings backed by a strong order book, while the stock trades at 12x FY21 PE against its long-term average 16x.
Release of equity through assets sales will be a key re-rating trigger, it added.
The stock rallied 51 percent in last nine-month. It was quoting at Rs 499.60, up Rs 8.30, or 1.69 percent on the BSE at 12:53 hours IST.Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.The Great Diwali Discount!
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