Buy Kalpataru Power Transmission; target of Rs 695: Sharekhan

Sharekhan's research report on Kalpataru Power Transmission

Q4FY2023 standalone performance a mixed bag; wherein revenue growth was strong; however, OPM and net profit were below estimates. The management has ambitious revenue growth target of over 25% for FY24/FY25 and expects PBT margin of 4.5-5% in FY24. Highest-ever annual order inflows of Rs. 25,241 crore led to an all-time high order book of Rs. 45,918 crore with additional L1 orders of Rs.4,000 crore. Performance is expected to improve driven by a robust order book and tender pipeline, merger synergies, subsiding cost headwinds. Monetization of non-core assets and reduction in promoter’s pledge could be key re-rating catalysts.

Outlook

We maintain a Buy on Kalpataru Power Transmission Limited (KPTL) with an unchanged PT of Rs. 695, as stock is attractively valued at ~12/~9x FY24/25E PER and optimistic outlook on execution and margins.

For all recommendations report, click here