Buy Kalpataru project Transmission; target of Rs 837: HDFC Securities

HDFC Securities' research report on Kalpataru project Transmission

Kalpataru project (KPIL) reported Q1FY24 revenue/EBITDA/APAT of INR 36.2/3.1/1.3bn, (missing)/beating our estimates by (1)/1/9%. KPIL secured new orders worth INR 73.8bn in FYTD24 (vs. FY24 guidance of INR 240-250bn), taking the order book (OB) to an all-time high of INR 473.3bn (~3.3x FY23 revenue). It reiterated its FY24 revenue growth guidance at 30% YoY with an EBITDA margin band of 8-8.5% and a PBT margin band of 4.5-5%. On the monetization of BOOT assets, it is expecting to monetize the Vindhyachal Expressway project in Q3FY24. It guided for a capex of INR 2.8-3bn in FY24 and NWC days below 100. KPIL expects robust order booking, driven by T&D and Civil, with market share gains coming both in local and international markets.

Outlook

Given robust order booking, improving growth outlook, and stable margins, we upgrade our estimates. We roll forward our valuation to Jun25 and maintain a BUY rating on the stock with an increased SOTP-based valuation to INR 837/sh.