Quote on Kalpataru Power Transmissio Jyoti Roy, Angel Broking Ltd
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Below are Quote on Power Transmissio By Mr. Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd
Kalpataru Power Transmission Ltd. (KPTL) is one of the market leaders in providing turnkey solutions to T&D companies. Over the years the company has entered into other segments like Railways and Oil & Gas pipeline in order to reduce its dependency on the T&D space and help the company grow faster. The company had an order backlog of ~Rs. 13,300 at the end of Q3FY21 and had L1 status in tenders worth Rs. 3,100 crore. The management has indicated that order pipelines are healthy and has guided for revenue growth of 0-5% for FY2021 as execution picks up further in Q4FY21. The company has already sold off three of its distribution assets and is in the process of selling off its fourth distribution asset post which consolidated net debt on books will reduce significantly from current level of Rs. 2,343 crore. Moreover JMC projects in which the company owns a 67% stake has an order backlog of Rs. 14,203 crore at the end of Q3FY21, which provides strong revenue visibility. Sale of Transmission Asset, merger of KPTL and JMC projects, strategic stake divestment in Logistic business will result in a significant deleveraging of the balance sheet over the next few quarters. Management guidance for pledge reduction by Dec'21 is also positive and will lead to a significant rerating for the company. We have a BUY rating on the company with a target price of Rs. 425.
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