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    Buy Kalpataru Power Transmission, target price Rs 615: Emkay Global

    Synopsis

    Kalpataru Power Transmissions, incorporated in the year 1981, is a Mid Cap company (having a market cap of Rs 8267.44 Crore) operating in Power sector.

    Kalpataru Power TransmissionGetty Images
    Promoters held 51.55 per cent stake in the company as of 30-Jun-2022, while FIIs owned 5.39 per cent, DIIs 35.98 per cent.
    Emkay Global has buy call on Kalpataru Power Transmissions with a target price of Rs 615. The current market price of Kalpataru Power Transmissions is Rs 553.95. Kalpataru Power Transmissions, incorporated in the year 1981, is a Mid Cap company (having a market cap of Rs 8267.44 Crore) operating in Power sector.

    Kalpataru Power Transmissions key Products/Revenue Segments include Income from EPC,Contracts,& Others, Transmission Lines, Towers & Structures, Scrap, Other Operating Revenue, Export Incentives and Others for the year ending 31-Mar-2022.

    Financials
    For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 3808.00 Crore, up 3.17 % from last quarter Total Income of Rs 3691.00 Crore and up 6.88 % from last year same quarter Total Income of Rs 3563.00 Crore. Company has reported net profit after tax of Rs 98.00 Crore in latest quarter.

    The company’s top management includes Mr.Mofatraj P Munot, Mr.Manish Mohnot, Mr.Sanjay Dalmia, Mr.Parag Munot, Mr.Vimal Bhandari, Mr.Narayan K Seshadri, Ms.Anjali Seth, Mr.Sajjanraj Mehta. Company has B S R & Co. LLP as its auditors. As on 30-06-2022, the company has a total of 15 Crore shares outstanding.

    Investment Rationale

    The brokerage values Kalpataru Power standalone entity at 15x (at par with KEC's exit P/E) vs 13.5x earlier, to arrive at its SoTP-based Dec-23 TP of Rs 615/share (earlier, Rs565). Emkay Global believe this may hold further upside, if one were to factor in the merger synergies. "Better standalone inflows (YTD inflows stand at ~Rs70bn along with L1 of ~Rs45bn) and softening commodity will improve earnings going forward," said the brokerage.

    Promoter/FII Holdings
    Promoters held 51.55 per cent stake in the company as of 30-Jun-2022, while FIIs owned 5.39 per cent, DIIs 35.98 per cent.



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