Hold Kalpataru Power; target of Rs 336: IDBI Capital

IDBI Capital's research report on Kalpataru Power

KPP meets our expectations. As against Revenue/EBITDA/PAT expectations of Rs12 bn/Rs1.2 bn/Rs722mn, KPP matches with Rs11.6 bn/Rs1.3 bn/Rs704 mn. With company maintaining the guidance, we think H2FY18 could be the time to watch out for. JMC targets 15% revenue growth in FY18. With higher exposure to private sector projects, we remain cautiously optimistic. Further, we have revised the number downwards for asset heavy subsidiaries by 12-14% in FY18/19. This will contribute lower other income to standalone. With team in place, Shree Subham, has marched past EBITDA positive mark. With steep interest outgo, PBT is in red-albeit showing an improving trend. Without major change in estimates, we maintain HOLD.

Outlook

Using sum-of-the-parts to value this company, we arrive at a fair value of Rs336 (earlier value of Rs.349). And we maintain HOLD.