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* KPTL is a diversified EPC player involved in execution of power transmission and pipeline projects. It also undertakes buildings, roads and power plant construction projects through its subsidiary JMC Projects.
* KPTL’s standalone order book stood at Rs142 bn as of 2Q FY19 end; order inflow in H1 FY19 stood at Rs47.4bn up 48% with L1 in excess of Rs20bn. Kalpataru Power Transmission (KPTL) has delivered a strong performance in 2QFY19 led by better-thanexpected execution in Railway, Oil & Gas Pipeline and T&D business. At subsidiary level, JMC’s revenue continue to grow owing to improved project execution also Shree Shubham Logistics reported strong growth in revenue.
* Looking ahead, we expect KPTL to be one of the key beneficiaries of strong transmission capex in both domestic and global markets, which would drive 21% CAGR in earnings through FY18- 20E.
* We have valued SSL based on EV/EBITDA multiple of Rs8.0/share. We have BUY recommendation on the stock with a Target Price of Rs544.
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