For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

This Small Cap Power Stock Likely To Gain 26%, Strong Order Book Offers Good Revenue Visibility

|

HDFC Securities' report on Kalpataru Power Transmission Limited (KPTL) suggesting the investors buy the stock of the company for a target price of Rs 471 apiece. Investors buying the stocks of the company at the current market price can expect a return of in price around 18% in 12 months, considering the brokerage's target price.

 

Stock Outlook & Returns

Stock Outlook & Returns

August 08, Tuesday, Kalpataru Power's stock's current market price is Rs 375.15 apiece, yesterday it jumped 1.19%. Currently, the stocks are trading Rs 43.35 apiece above the 52-week low and Rs 107.3 below the 52-week high respectively.

The 52 week low of the stock is Rs 331.80 apiece recorded on 11th May 2022 and the 52-week high is Rs 482.45 apiece recorded on 5th August 2021, respectively.

The shares of the company in the past 1 week have jumped 0.11% and 5.53% in the past 1 month, respectively. Over the past 1 year, the shares have fallen 19.25% and 19.78% in the past 3 years, respectively. In the past 5 years, the stocks jumped 5.385.

 Its Return on Equity (ROE) is 12.62%. TTM PE ratio is 10.33. The P/B ratio is 1.26. TTM EPS is Rs 36.33. The dividend yield is 1.73% and the face value is Rs 2. Kalpataru Power Transmission Limited is a small-cap Power Transmission company having a market capitalization of Rs 5,586.33 crore.

Financial highlights
 

Financial highlights

Revenue: Rs 15.4bn (-2.8%/-23.3% YoY/QoQ, a 4.7% miss). EBITDA: Rs 1.3bn (-19.8%/-24% YoY/QoQ, a 11.7% miss). EBITDA margin, at 8.4% (-179/-8bps YoY/QoQ, vs. our estimate of 9.1%), was lower due to higher commodity prices and freight costs.

Interest cost: Rs 280mn (- 17.6%/-6.7% YoY/QoQ). RPAT was at INR 1.1bn (+48.7%/+12.7% YoY/QoQ). Normalising the Rs 460mn gains from Linjemontage (LMG), its Sweden-based subsidiary, the APAT, at Rs 785mn (+3.3%/-9.8% YoY/QoQ, a 1.7% beat), is in line, aided by lower tax expenses. For FY23, KPTL reiterated its revenue growth guidance of 10-15% YoY; EBITDA margin is expected at ~9%. 

Robust OB providing good revenue visibility

Robust OB providing good revenue visibility

Total orders received in FYTD23 stood at INR 42.5bn (order inflow for Q1FY23 is INR 36.3bn); domestic orders 25%, international orders 75%. The OB, as of Jun'22, stood at INR 175.7bn (~2.5x FY22 revenue). OB includes L1 orders worth INR 42bn and INR 11.8/9.3bn LMG/Fasttel orders. 32% of the OB comprises domestic orders and balance 68% of international orders. Shares of T&D/railways/O&G in OB are at 75/15/10%. 

Comfortable balance sheet; strengthening underway

Comfortable balance sheet; strengthening underway

The standalone/net debt increased to Rs 13.5/9.3bn, as of Jun'22 vs. Rs 11.9/4.1bn, as of Mar'22. KPTL has received occupancy certificate (OC) for the Indore real estate project, with Rs 2.9bn of pending cash flows to be realised. During the quarter, KPTL received 0.2bn, and it expects to receive another INR 1bn+ in the balance part of FY23. KPTL has received a no-objection certificate (NOC) from SEBI and exchanges for the KPTL-JMC merger and expects the merger to complete by Q4FY23. The company has guided that the promoter pledging is expected to come down substantially by Q3FY23. KPTL has further guided about growth in core EPC business, international expansion, divestment of non-core business and reduction of debt (Rs 3.5bn from FY22 level) by FY23 end.

Order momentum picking up

Order momentum picking up

Order momentum picking up Kalpataru Power (KPTL) reported revenue/EBITDA/APAT of Rs 15.4/1.3/0.8bn, (missing)/beating our estimates by (4.7)/(11.7)/1.7%. RPAT came in at INR 1.1bn, aided by dividend income of INR 460mn from LMG and lower tax expenses. Normalising the gains, PAT has come in line. EBITDA margin shrunk both sequentially and annually to 8.4% on account of higher commodity prices and freight costs. KPTL secured new orders worth Rs 42.5bn in FYTD23, taking the order book (OB) to Rs 175.7bn (~2.5x FY22 revenue, includes Rs 42bn L1). The standalone/net debt increased to Rs 13.5/9.3bn, as of Jun'22 vs. Rs 11.9/4.1bn, as of Mar'22. The pending cash flow to be realised from the Indore real estate project, for which OC was received in Jul'22, is Rs 2.9bn, with Rs 1bn+ expected in balance part of FY23. This shall help deleverage the balance sheet further. We maintain BUY with an SOTP valuation of Rs 471.

About - Kalpataru Power Transmission Limited

About - Kalpataru Power Transmission Limited

Kalpataru Power Transmission Limited (KPTL) is among the leading Engineering, Procurement, and Construction (EPC) companies with proven experience and expertise spanning over three decades. KPTL is executing marquee projects with comprehensive capabilities that deliver complete solutions covering the design, testing, fabrication, erection and construction of transmission lines, oil and gas infrastructure and railways projects on a turnkey basis. KPTL has established its footprints in 63 countries spread across five continents.

KPTL is part of the Kalpataru Group established in 1969. It is a diversified conglomerate with an interest in Real Estate, Power Generation, Agri Logistics and EPC in major infrastructure segments like Power Transmission and Distribution, Buildings & Factories, Roads & Highways, Water & Irrigation, Railways and Oil and Gas.

Disclaimer

The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.

Story first published: Tuesday, August 9, 2022, 15:59 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X