Kalpataru Power Transmission Ltd | Fundamental Analysis

By | 4th April 2018

CMP: 481.45          Target Price: 553.00          Upside:15%

Reasons to Invest:

  • Kalpataru Power Transmission Ltd (KPTL) is primarily engaged in the business of Engineering, Procurement and Construction (EPC) relating to infrastructure comprising power transmission & distribution, railway track laying and electrification, and also oil & gas pipe Lines Laying, etc.
  • Overall order book position as on Dec 17 for Kalpataru Power Transmission Ltd (KPTL) standalone is around Rs 10532 crore. 46% of orders are from T&D international markets, 28% from domestic transmission markets and 13% of order book is from infrastructure and railway segment each. PGCIL accounted for around 8% of total order book.
  • For JMC Projects, a subsidiary of Kalpataru Power Transmission Ltd (KPTL), the company has an order book of around Rs 7500 crore with around 62% from factories and buildings, 6% is from industrial, 17% from infrastructure segment and 7% is international
    while rest from other sectors. You might like this : Take Solutions | Fundamental Analysis
  • In addition, The company has a global footprint in over 50 odd countries on transmission projects. The company would continue to expand that global footprint and with the support from Exim Bank of India and opportunities coming from the international market, company expects that will continuously expand. The company is currently executing several contracts in India, Africa, Middle East, CIS, SAARC and Far East.
  • Over the past decade, it continued capital investments in both transmission and other infrastructure sectors, but has managed to maintain debt levels at the lowest in the industry. Its credit rating continues to be good and enjoy strong support of bankers, due to years of building relationships of trust.
  • Further more, Net profit of the company rose 31.66% to Rs 75.23 crore on 25.59% rise in net sales to Rs 1417.37 crore in Q3 December 2017 over Q3 December 2016. On margin front, the company expects margins of around 10% for FY 18. Management expects margins sustainable around this level for FY 19 as well. JMC has pass through clause for most of the projects so margin volatility has reduced. You might like this : Investment Process On Track In A New Financial Year

Valuation

The Company continues to focus on improving profitability and return ratios as a result of improved margins and unlocking of capital from non-core assets. Its diversification focus has led to success in securing significant orders in the non-T&D business, with healthy margins. Thus, it is expected that the stock will see a price target of Rs.553 in 8 to 10
months time frame on a one year average P/E of 21.58x and FY19 (E) earnings of Rs.25.62.

Face Value Rs.: 2.00
52 Week High/Low: 535.95/283.10
M.Cap Rs. in Cr.: 7388.36
EPS Rs.: 19.99
P/E Ratio (times) 24.08
P/B Ratio (times) 2.85
Dividend Yield (%) 0.34
Stock Exchange BSE

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Disclaimer:

My descriptions, videos, presentations are only for educational and information purposes and under no circumstances should be used for making investment decisions. I cannot guarantee the accuracy of any information provided.
The stocks picks are based on my own research and personal views and sometimes are from newspapers, tv channel program, magazines, etc. No part of compensation is or will be directly or indirectly related to the views and recommendations of this research. I have not served as an officer director or employee of company and have not been engaged in market – making activity of the company covered in the research report. Consult qualified financial advisor before making any investment decision.

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