Kalpataru Projects - Ticking The Right Boxes: Motilal Oswal

Motilal Oswal Report

In our recent interaction, the management of Kalpataru Projects International Ltd. highlighted notable improvements in its domestic transmission and distribution prospect pipeline and inflows of large orders from the Middle East in the oil and gas sector.

These factors provide long-term revenue visibility for Kalpataru Projects, with transmission, urban infra and oil and gas being key growth drivers.

Factoring in inflows from the Middle East, we raise our FY26 estimates by 12%. Pledging by promoters as a percentage of total shares has come down to 12.8% in March 2024 from 17.5% in December 2023 and 26.6% in Q1 FY23, which we believe is resulting in valuation re-rating of Kalpataru Projects.

Our revised SoTP-based target price stands at Rs 1,200, taking into account core business valuation at a slightly higher multiple of 16 times Mar’26E earnings per share. We maintain Buy on Kalpataru Projects.

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