Buy Kalpataru Projects International Ltd For Target Rs. 1,470 by Axis Securities Ltd
Robust Execution & Strong Order Book to Propel Growth
Est. Vs. Actual for Q1FY26: Revenue: BEAT; EBITDA Margin: BEAT; PAT: BEAT
Change in Estimates post Q1FY26 (Abs.)
FY26E/FY27E: Revenue: 2%/2%; EBITDA: 1%/2%; PAT: 7%/6%
Recommendation Rationale
Robust Order Book to Support Revenue Growth: As of 30 Jun’25, the company's order book stands at Rs 65,475 Cr, with 41% from T&D, 25% from B&F, 14% from Water, 11% from Oil & Gas, 5% from Railways, and 4% from Urban Infra. Backed by a strong execution track record and expanding opportunities across all segments, the company is positioned for steady revenue growth, projecting a 19% CAGR from FY25 to FY27E.
New Order Inflow to Sustain Growth: The YTD order inflow stood at Rs 9,899 Cr. The management expects full-year order inflow in the range of Rs 26,000-28,000 Cr, with a major focus on the T&D and B&F segments. It anticipates traction in Oil & Gas and the international Water segment, while remaining positive on growth across all businesses except Railways.
EBITDA Margins & PAT Expected to Expand: Recent order wins are expected to support margin expansion, driving improved profitability. Management anticipates a 100 bps increase in operating margins for the current fiscal year. Additionally, reduced debt levels are lowering finance costs, strengthening the bottom line. We project robust growth in EBITDA and PAT, with expected CAGRs of 24% and 47%, respectively, over FY25–FY27, and forecast EBITDA margins in the range of 8.5%-9% for FY26/27.
Sector Outlook: Positive
Company Outlook & Guidance: Management has guided for 20-25% revenue growth and PBT margins of ~5% in FY26.
Current Valuation: 20.5x FY27 EPS; ( Earlier Valuation: 20x FY27 EPS)
Current TP: Rs 1,470/share; ( Earlier TP: Rs 1,350/share)
Recommendation: We maintain our BUY rating on the stock.
Financial Performance
Kalpataru Projects International Ltd (KPIL) reported strong Q1FY26 results, with revenue at Rs 6171 Cr, up 35% YoY, driven primarily by higher sales in the T&D segment. EBITDA came in at Rs 525 Cr, up 39% YoY, while PAT surged 111% YoY to Rs 214 Cr. EBITDA margin stood at 8.5%, compared to 8.2% in Q1FY25 and above our estimate of 8%.
Outlook: The company is well-placed to capitalise on its strong order book, favourable sectoral trends in domestic and international T&D and B&F segments, improved performance of international subsidiaries, supportive government initiatives, and anticipated margin gains. It is projected to deliver a CAGR of 19%/24%/47% over FY25–FY27E.
Valuation & Recommendation: The stock is currently trading at 21x/17x FY26E/27E EPS.
We maintain our BUY rating on the stock with a TP of Rs 1,470/share, implying an upside of 24% from the CMP
For More Axis Securities Disclaimer https://simplehai.axisdirect.in/disclaimer-home
SEBI Registration number is INZ000161633
