Kalpataru Projects - Pipeline Remains Strong Across Segments: Motilal Oswal

Motilal Oswal Report

Over the years, Kalpataru Projects International Ltd. has evolved from being a transmission and distribution EPC player to a well diversified entity straddling segments and geographies, which mitigates the cyclical nature of the T&D business to an extent.

The company now has an established presence across businesses such as oil and gas, water, urban infra, construction, railways, metros, data centers, etc., spanning 73 countries.

The merger with JMC has equipped Kalpataru Projects with synergies and capabilities to tap large and complex projects, which augurs well going forward.

Valuation and view

Kalpataru Projects is currently trading at 21.5 times/15.7 times FY25E/FY26E earnings per share.

We maintain our Buy rating with an SoTP-based target price of Rs 1,385, based on 17 times P/E for the core business. Any further reduction in the level of promoter pledge will be positive for core business valuations.

Key downside risks:

• slowdown in order inflows,

• a spike in commodity prices,

• higher crude prices,

• higher inflation,

• increase in receivables and working capital, and

• intensified competition.

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