Prabhudas Lilladher is bullish on Kalpataru Power Transmission has recommended buy rating on the stock with a target price of Rs 261 in its research report dated May 21, 2020.
Prabhudas Lilladher's research report on Kalpataru Power Transmission
Kalpataru Power Transmission Ltd (KPTL) reported numbers largely in-line with our estimates barring PAT which got impacted due to lower sales and higher effective tax rate (42%). Order inflows stands at Rs65.2bn for FY20 majorly contributed by T&D segment and is further L1 in orders worth ~Rs20bn. OB stands at ~Rs133bn providing revenue visibility for next 2-3 years. Despite Covid-19 impact management is confident to achieve a revenue growth of 10% with 10.5-11% EBITDA margin for FY21E. Given the strong bid pipeline and opportunities arising in T&D (Green Energy Corridor projects in domestic market and international projects) space, management has guided for an OI of Rs100-110bn (~Rs30bn already achieved).
With strong revenue visibility on back of robust order-backlog, steady margin profile, positive outlook in T&D and emerging segments like Railways/Oil & Gas we expect KPTL to deliver ~13% earnings CAGR over FY20-22E. We maintain BUY with a revised SOTP based TP of Rs261 (earlier TP of Rs275).
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