Emkay Global Financial's research report on Kalpataru Power
KPTL (Standalone) missed street’s estimates due to lower revenue owing to low opening order book in the T&D segment and slower progress in select projects. Revenue fell by 6% YoY for Q2FY23, while EBITDAM came in at 8.2% vs. 8.4% QoQ. Management now expects revenue growth to be at 7.5-10%, as the execution pace is expected to pick up in 4QFY23. Strong order inflows of ~Rs69bn (YTD) imply revenue pickup for FY24. Order book stands at Rs188bn (Rs157bn as of March 2022-end), excluding L1 of Rs43bn. JMC Projects reported 36% YoY revenue growth for Q2FY23, with EBITDAM at 8.3% – flat QoQ and up 180bps YoY. YTD inflows stood at Rs75bn, while order book at the end of the quarter stood at Rs200bn.
Given improved order inflow, higher valuation of JMC Projects, and rollover to Dec-2023, our TP now stands at Rs565 (earlier Rs545). We maintain our Buy rating on the stock, as improvement in real estate business, merger of JMC in KPTL, and improved inflows across segments are all positives.