Midcap Power Stock To Buy As Recommended By HDFC Securities For 44% Robust Returns

Leading brokerage firm HDFC Securities is bullish on Kalpataru Power Transmission Ltd (KPTL), a midcap power sector stock. The brokerage has assigned a "Buy" on the stock with a target price of Rs 708 apiece, which implies a potential upside of 44% from its current level. The stock's market capitalisation is Rs 8,036.21 crore. Below are the key takeaways from the report about the stock:

Kalpataru Power Transmission - Stock Outlook

The stock of Kalpataru Power Transmission on NSE last traded at Rs 494.70 apiece, down 2.01%. The stock recorded its 52 week low on 11 May 2022 at Rs 331.80 apiece and 52 week high on 14 December 2022 at Rs 575.95 apiece, respectively.

The stock in the past 1 week has fallen 2.65%. It declined 2.9% in the past 1 month and 1.03% in the past 3 months, respectively. In the past 1 year, it gave 22.63% positive return. In the past 3 years, it gave 9.71% positive return. In the past 5 years, it gave 4.68% positive return.

HDFC Securities recommended "Buy" the Stokc with a Target Price of Rs 708/share

According to the brokerage, Kalpataru Power (KPTL) reported revenue/EBITDA/APAT of INR 35/3/1.1bn, (missing)/beating our estimates by 2.9/4/(11)%. Healthy execution growth was witnessed in Water, B&F, O&G and Urban Infra businesses. KPTL secured new orders worth INR 195bn in FYTD23, taking the order book (OB) to an all-time high of INR 414bn (excluding L1 of INR 52bn). KPTL is eyeing transmission, B&F, Water and Railways as the growth driver. With the merger completed with JMC, KPTL expects a financial synergy in terms of interest cost savings of INR 500-700mn in FY24. The merged entity is well-placed to bid for larger project sizes in both domestic and international markets. Within the domestic market, water and transmission opportunities are huge; KPTL expects a 60-70% opportunity within the water segment is yet to open as other states start opening tender under JJM (mostly carried by UP till now).

It added, "We have recalibrated our estimates higher to factor in strong order inflows. We roll forward our valuation to Dec 24E and maintain a BUY rating on the stock with an increased SOTP valuation of INR 708/sh."

 

Disclaimer

The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.