Buy Kalpataru Power; target of Rs 310: Eastern Financiers

Eastern Financiers' report on Kalpataru Power Transmission (KPTL)

Kalpataru Power Ltd (KPTL) is one of the largest and fastest growing specialized EPC companies in India engaged in power transmission & distribution, oil & gas pipeline, railways, infrastructure development, civil contracting and warehousing & logistics business with a strong international presence in 38 countries in power transmission & distribution. The company is currently executing several projects in India, Africa, Middle East, Australia, North America and Far East.

Shree Shubham Logistics (SSL), a subsidiary of KPTL, is coming out with an initial public offering (IPO) to fund its growth plans, capitalise the recently acquired non-banking finance company (NBFC) and repay part of its debt. The company is looking to raise Rs210 crore from this issue. SSL is present in the mid stream of Agri-commodity value chain and undertakes an array of activities from procurement, warehousing and processing to collateral management and certification.

"SSL is a leading player in the Agri-logistic parks (ALP) industry in India with a storage capacity of 3.5 lakh metric tonne (MT). It has chalked out an aggressive expansion plan to add another 3.87 lakh MT of storage capacity by setting up warehouses in 20 different locations. At the CMP of Rs 233.85, the stock trades at 15.5x FY16 EPS. We recommend a BUY with SOTP target price of Rs 310 an upside of 33%, over a period of 9-12 months", says Eastern Financiers research report.

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