Buy Kalpataru Power, target of Rs 284: Karvy

Karvy Stock Broking has upgraded its rating on Kalpataru Power Transmission from market performer to buy with a price target of Rs 284 in its March 9, 2009 research report. “Kalpataru Power Transmission (KPTL) announced on 4th March 2009, that the company has bagged orders worth Rs 3.73 billion from Power Grid Corporation of India (PGCIL) for supplying power transmission equipment in India. This is followed by a large order worth USD 250 million (Rs 12 billion) from Ministry of Energy and Water, Kuwait during January 2009. Including the new order from PGCIL, total order book of KPTL (standalone) is Rs 48 billion (including L1) with an average execution period of 22 months. The latest project secured from PGCIL is expected to commence from March 2009 and scheduled to be completed within 27 months. Hence, we expect partial revenue to be booked in FY10 and remaining in FY11.”

“We maintain our revenue and earnings estimates and retain our price target of Rs 284, based on 4.5x FY10 earnings. However, owing to recent price correction, we upgrade our rating from Market performer to BUY,” says Karvy Stock Broking’s research report.

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