Buy Kalpataru Power Transmissions, target price Rs 490: Emkay Global

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Emkay Global has buy call on Kalpataru Power Transmissions with a target price of Rs 490. The current market price of Kalpataru Power Transmissions is Rs 391.

Time period given by analyst is one year when Kalpataru Power Transmissions Ltd. price can reach defined target.

Kalpataru Power Transmissions Ltd., incorporated in the year 1981, is a Mid Cap company (having a market cap of Rs 5852.88 Crore) operating in Power sector.

Kalpataru Power Transmissions Ltd. key Products/Revenue Segments include Income from EPC,Contracts,& Others, Transmission Lines, Towers & Structures, Others, Scrap, Export Incentives and Other Operating Revenue for the year ending 31-Mar-2020.

Financials

For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 3916.00 Crore, up 9.91 % from last quarter Total Income of Rs 3563.00 Crore and up 11.25 % from last year same quarter Total Income of Rs 3520.00 Crore. Company reported net profit after tax of Rs 261.00 Crore in latest quarter.


Investment Rationale
The brokerage has cut FY23E/FY24E EPS by ~12% each, factoring in a 50bps cut in margins and a 5.6% cut in revenue. While inflows are expected to touch ~Rs80bn, it factors in a large long gestation (5-6 years of execution) of the project and hence there is a cut in revenue estimates for FY23E/FY24E. It has estimated EBITDAM of 9.7%/10.3% for FY23E/FY24E. Its FY23E/FY24E EPS stand at Rs29.7/Rs34.1. The stock trades at ~10x FY24E EPS.



Promoter/FII Holdings
Promoters held 51.58 per cent stake in the company as of 31-Dec-2021, while FIIs owned 5.7 per cent, DIIs 34.19 per cent.

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