Edelweiss's research report on Kalpataru Power
Kalpataru Power (KPP) clocked yet another stellar performance—100% jump in order intake and 33% EBITDA spurt, 8% higher than estimate—in Q4FY18. Key highlights: 1) 27% revenue growth primarily driven by 40% surge in railways & 20% growth in the T&D business; 2) margin remained healthy at ~11%; 3) increase in net debt by INR2bn was due to higher working capital in core business & infusion in various BOOT projects, debt is expected to rise further by INR2-3bn; and 4) performance of JMC (EBITDA up 40%) and Shubham Logistics (SSL; 80% utilisation) remained encouraging.
Outlook
We remain constructive on the stock and believe KPP is strongly poised to ride the railways growth wave. Value unlocking from sale of real estate projects, road assets and SSL is a key monitorable. We maintain ‘BUY/SO’ with SOTP-based TP of INR560.
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