Buy Kalpataru Power; target of Rs 255: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' report on Kalpataru Power Transmission

"Kalpataru Power’s (KPP) Q4FY15 revenue belied our estimate (down 6%) due to sharp 14% fall in the T&D business on account of order book slowdown (down 15% YoY). A key positive was the sharp fall in infra business losses (from a quarterly run rate of INR150mn to INR80mn). Management indicated that loss-making legacy orders will be executed over the next 2-3 months and expects ~10% margin going forward in the infra segment. KPP’s L1 position in INR26bn orders failed to translate into order intake in Q4FY15 (due to which order book fell 15% YoY), but management expects that majority of these L1 will be booked in Q1FY16.  Management is confident of doubling order intake from INR27bn in FY15 to INR55-60bn in FY16. Anchored by this, management has issued fresh guidance of 10-15% revenue growth with 10-11% margin in FY16. While we broadly retain our FY17E EPS for KPP, we raise our SOTP from INR242 to INR255 (valuing parent at 12.5x FY17 EPS) as we now value road BOOT projects and transmission projects. Maintain buy", says Edelweiss research report.

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