Accumulate Kalpataru Power; target of Rs 292: P Lilladher

Brokerage house Prabhudas Lilladher is bullish on Kalpataru Power Transmission (KPTL) and has recommended 'Accumulate' rating on the stock with a target price of Rs 292, in its research report dated July 09, 2015.

July 10, 2015 / 15:53 IST

26 Aug, 2025 12:21

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Prabhudas Lilladher's report on Kalpataru Power Transmission

Strong inflow in Q1FY16 (Rs18bn) and strong L1 Pipeline (Rs20bn) gives comfort on management guidance of Rs55-60bn in inflow and 10-15% sales growth in FY16. KPTL is also looking at monetising real estate assets (Indore/Thane) to free up capital and improve RoCE. Shree Shubam Logistic (SSL) IPO and asset monetization could be the medium-term trigger to watch out for. Maintain “Accumulate”.

"Expect significant pick-up in inflows: Outlook on order inflow from domestic and international markets continue to remain strong. Domestic markets are expected to improve, driven by ordering for National Grid, Green Corridor and improved traction in SEBs and Railways. KPTL sees significant traction in tender pipeline over the next 3-6 months from Power Grid/SEB/BOT projects. We understand that Power Grid is likely to put out bids worth Rs100bn in the next 3/4 months and tenders worth Rs50-60bn are likely to be floated on the BOT route. KPTL has already announced orders worth Rs18bn in Q1 and L1 in further Rs20bn worth of projects. Given the bid pipeline and L1 position in few projects, KPTL remains confident of achieving inflow of Rs50-60bn for FY16 (~50-55% growth YoY). The standalone order book at the end of FY15 stood at ~Rs51.6bn (down 24% YoY). We believe, given the strong inflow in Q1, sales growth in FY16 could be close to the upper end of guidance at 10-15%."

Outlook and Valuation: "The stock is trading at 13.5xFY17E core PE. We believe the growing international presence, strong outlook in domestic T&D market and increasing presence is likely in high growth areas like Railways which should help the company deliver 25% earnings CAGR over FY15-17E. Maintain accumulate with a target price of Rs 292", says Prabhudas Lilladher research report.

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