Buy Kalpataru Projects; target of Rs 1450: Emkay Global Financial

Emkay Global Financial' research report on Kalpataru Projects

The T&D and Building and Factories segments were the primary growth contributors, while the railways and water segments faced execution challenges due to a weak order book, intense competition, and delays in cash flows. For FY25, order inflows stood at Rs255bn, taking the order backlog to an all-time high of Rs645bn (~3x), which provides strong revenue visibility. For FY26, the management has guided for Rs260-280bn in order inflows and 20% revenue growth, which we believe is achievable, given the strong order book and promising tender pipeline. Despite strong revenue growth, NWC was well under control at 94 days (well within management’s guidance of below 100 days), which is commendable. Securing large highmargin orders, improving execution, maintaining effective working capital control, and exiting non-core businesses are the management’s key focus areas.

Outlook

We maintain BUY on Kalpataru Projects International Ltd (KPIL) with a TP of Rs1,450 (implying 30% upside). Standalone revenue/EBITDA/PAT grew by 21%/31%/48% YoY, led by strong order book, improved execution, and operating efficiencies.