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Prabhudas Lilladher Report
Kalpataru Projects International Ltd. reported decent quarterly performance with standalone revenue growth of ~15.4% YoY and Ebitda margins remaining broadly flat at 8.7%.
Net working capital days improved to 106days versus 134 days in Q1 FY23, driven by efforts towards project closure and timely collections. Order pipeline remains strong across business verticals such as transmission and distribution, water, building and factories and oil and gas. Management priorities are currently on-
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increasing margin to 9-10% over next two-three years,
expanding international business in new and existing areas, and
strengthening resources via training.
Management maintained its FY24 guidance of 30% plus standalone revenue growth, Rs 260 billion order inflows, 4.5%-5% profit before tax margin and interest cost below 2% of sales.
Debt is likely to be higher compared to FY23 owing to high growth expectations in FY24. We remain positive on Kalpataru Projects in long run owing to-
strong order backlog,
strong order pipeline across segment,
focus on geographical expansion for segment such as water, railways, civil etc.
increasing pre-qualification for large contracts and
operational and cost synergy arising due to merger.
The stock is trading at price-to-earning of 15.8 times/11.9 times FY24/25E. Maintain ‘Buy' rating on stock with revised SoTP based target price of Rs 732 (earlier Rs 625), valuing core business at 13 times FY25E (11 times earlier), owing to robust tendering prospects.
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