Buy Kalpataru Projects; target of Rs 1500: Motilal Oswal

Motilal Oswal's research report on Kalpataru Projects

We continue to remain positive on Kalpataru Projects International (KPIL) based on its positioning across fast-growing power T&D EPC as well as the Buildings and Factories (B&F) segment. The company has a strong order book of INR606b spread across domestic and international geographies, providing healthy revenue visibility of 2.5-3 years. Following a weak execution in 1HFY25, a ramp-up is expected in the coming quarters, driven by the strong order book and easing payment situation. Benign commodity prices provide comfort on margin expansion, and interest expenses are likely to come down post the recent fund raise via QIP. Promoter pledge has already come down to around 8% of the total shareholding, and with the expected IPO of real estate arm, we expect this to gradually wane down further.

Outlook

We slightly revise our estimates downward and roll forward our TP to Mar’27 estimates. Reiterate BUY on KPIL with an SoTP-based TP of INR1,500, valuing core business at 19x on two-year forward earnings.

For all recommendations report, click here