Sharekhan's research repor on Kalpataru Power Transmission
Better than expected execution and higher OPM leads to beat on net earnings. Management maintained its guidance for 5-10% standalone revenue growth for FY2021 and OPM of 10.5-11%. The company has bagged orders worth Rs. 2,470 crore YTD and is L1 in Rs. 1,000 crore orders. Order backlog remains strong providing 1.8x TTM standalone revenues. The agreement for sale of the third project Kohima Mariani Transmission remains intact and is working to close all T&D assets sales transactions in FY2021 which would help further deleveraging the balance sheet.
Outlook
We maintain our Buy rating on Kalpataru Power Transmission Limited (KPTL) with a revised PT of Rs. 325, considering its attractive valuation and strong execution and order intake capabilities.
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