Prabhudas Lilladher has given Buy recommendation for Kalpataru Power Transmission with a target price of Rs. 444 in its research report issued on Feb 15, 2022

Prabhudas Lilladher’s research report on Kalpataru Power Transmission

Kalpataru Power Transmission (KPTL) reported weak Q3FY22 performance with revenue decline of 7% YoY and margins getting impacted due to higher commodity and freight cost. Given muted performance in 9MFY22, higher commodity price and freight cost, management has revised downward its FY22 revenue guidance to single digit decline (earlier 5-10% growth), EBITDA margins to be ~9-9.5% and order inflow guidance at ~Rs70-80bn. Domestic T&D activity is expected to pickup in coming quarters led by TBCB, private players and SEBs. While on international front tendering opportunity remains robust from regions like Africa, Middle East, Bangladesh, Nepal, SAARC and Nordic countries. Given execution challenges, higher commodity price and increased freight cost, we revised downwards our EPS estimate by 27%/22% for FY23/24. However, remain positive on stock in long run owing to 1) strong outlook from international markets, revival in domestic T&D, along with growth emerging in segments such as Railways/ O&G and 2) deleveraging backed by asset monetization.

Outlook

At CMP stock trades at PE of 14.9x/11.9x/9.9x FY22E/23E/24E. We roll forward our estimate to FY24, with revised SoTP of Rs444 (earlier 508) and maintain ‘BUY’ rating on stock.

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At 17:30 Kalpataru Power Transmission was quoting at Rs 392.55, up Rs 10.60, or 2.78 percent.

It has touched an intraday high of Rs 394.00 and an intraday low of Rs 383.90.

It was trading with volumes of 3,345 shares, compared to its thirty day average of 42,986 shares, a decrease of -92.22 percent.

In the previous trading session, the share closed up 1.37 percent or Rs 5.15 at Rs 381.95.

The share touched its 52-week high Rs 495.95 and 52-week low Rs 338.00 on 03 August, 2021 and 19 April, 2021, respectively.

Currently, it is trading 21.13 percent below its 52-week high and 15.72 percent above its 52-week low.

Market capitalisation stands at Rs 5,845.43 crore.

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