Buy Kalpataru Projects International Ltd For Target Rs.1470 by Axis Securities Ltd

Robust Execution & Strong Order Book to Propel Growth
Summary
* Revenue and PAT growth: In FY25, KPIL achieved revenue of Rs 22,316 Cr, up 14% YoY, attributed to robust execution of T&D and B&F segments. The company’s net profit stood at Rs 567 Cr for FY25, a 10% growth YoY, reflecting improved operational efficiency and resilient margins.
* Financial Management: The company has demonstrated strong capital stewardship by reducing net debt and maintaining a healthy Net Debt-to-Equity ratio of 0.3x as of 31st March, 2025. Consolidated net debt declined by 25% YoY to Rs 1,953 Cr by the end of FY25. Successful Qualified Institutional Placement (QIP) garnered strong support from leading domestic and international investors, signifying deep market confidence in the long-term strategy.
* Oil & Gas: KPIL’s oil & gas business delivered revenue of Rs 1,758 Cr in FY25, registering ~114% YoY growth, driven by improved execution of domestic projects and the ramp-up of international engagements. The business gained strong momentum by executing a project for a leading Saudi energy major, marking a key milestone in KPIL’s Middle East expansion
Key Highlights
* Robust Orderbook: As of 31st March, 2025, the company’s order book stood at an all-time high of Rs 64,495 Cr. The order book is well-diversified across business verticals, geographies, and project types. Order inflows for FY25 stood at Rs 25,475 Cr, with nearly 90% contributed by our core T&D and Buildings & Factories businesses, ensuring strong visibility on margins and execution.
* T&D: The Power T&D business remained KPIL’s largest and fastest growing business in FY25, delivering strong revenue growth of 28% YoY to Rs 10,026 Cr. During the year, the company secured new T&D orders worth Rs 14,461 Cr, primarily from India, Sweden, Latin America, Africa, and the Middle East.
* B&F: The business delivered strong performance in FY25, with revenue rising 22% YoY to Rs 5,854 Cr, supported by a balanced portfolio of residential, commercial and industrial EPC projects. KPIL secured Rs 8,225 Cr in new orders during the year, including marquee wins in the residential and airport segments, further reinforcing its execution capabilities and longterm competitiveness.
Key Competitive Strengths
a) Strategically Positioned; b) Focused on Operational Excellence; c) Growth Prioritised Strategies Implemented a) Strategic Expansion; b) Expanding Horizons; c) Digitalisation Growth Drivers a) Government Support for the Roads & Highways segment, b) Initiatives for the Airports, c) CapEx for the Railways segment, d) Promotion of Urban Infra, e) Demand in the Ports segment Key Focus Areas moving forward a) Strengthening Core EPC Capabilities; b) Expanding Global Presence; c) Strategic Inorganic Growth; d) Enhancing Efficiency and Returns
Outlook & Recommendation:
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. 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 18% from the CMP.
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