Prabhudas Lilladher has given Buy recommendation for Kalpataru Power Transmission with a target price of Rs. 465 in its research report issued on Feb 21, 2022
Prabhudas Lilladher’s research report on Kalpataru Power Transmission
The board of Kalpataru Power Transmission ltd. (KPP) approved merger of JMC Project (subsidiary) with KPP (all equity merger) in 4:1 ratio, expected to be completed by Q4FY23. This merger will create one of India’s largest EPC company’ having global footprint that caters to various sectors such as Power Transmission, Building & Factories (B&F), Railways, O&G, Water, Urban Infra and Heavy Civil. Order book of combined entity including L1 stands strong at Rs370bn as on Q3FY22 of which T&D accounts for 24%, B&F 30%, Railways 10%, O&G 6% and Water 30%. We believe the merger to be beneficiary in cost rationalization, strengthening balance sheet, bidding large size orders and expanding non T&D segment in international market. We continue to remain positive on stock in the 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.
At CMP stock trades at PE of 15.7x/12.5x/10.5x FY22E/23E/24E. Maintain ‘BUY’ rating on stock with revised SoTP of Rs465 (earlier Rs444).
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At 14:40 hrs Kalpataru Power Transmission was quoting at Rs 400.40, down Rs 2.70, or 0.67 percent.
It has touched an intraday high of Rs 404.00 and an intraday low of Rs 388.05.
It was trading with volumes of 24,952 shares, compared to its thirty day average of 46,278 shares, a decrease of -46.08 percent.
In the previous trading session, the share closed up 3.53 percent or Rs 13.75 at Rs 403.10.
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 19.27 percent below its 52-week high and 18.46 percent above its 52-week low.
Market capitalisation stands at Rs 5,962.32 crore.