Kalpataru Power to consider proposal to raise funds by issuing NCDs this week

In its regulatory filing, it said, “This is to inform you that a meeting of the Executive Committee of the Board of Directors of the Company is scheduled to be held on Thursday, December 8, 2022, to, inter alia, consider and approve the proposal To raise money by issuing convertible debentures On the basis of private placement.”

Kalpataru on Monday Power The stock closed down by 0.71% 516.85 per share on BSE. The stock touched intraday high and low 524.70 each and 513.60 respectively.

The company’s market cap is over 7,696 crores.

In the first half of FY23, Kalpataru Power posted a net profit 55% yoy to 175 cr, however, revenue declined by 4% yoy 3,071 crores. came in EBITDA 255 crores, while the EBITDA margin stood at 8.3%. The company’s order book as on September 30, 2022 was 18,856 crore (including LMG and Fasttel). The company got new orders in the first half 6,889 crores.

Meanwhile, in Q2FY23, on a consolidated basis, the company’s revenue 3,798 crore grew by 7% YoY, while profitability grew by 18% YoY 98 crores. EBITDA up 16% year-on-year 350 crore and EBIDTA margin was 9.2%. As on September 30, 2022, the net debt of the company was 2,905 crores.

Last month, in its post-Q2 report, Emkay Global said in its report, revenue growth is lagging in H1 as FY22 orders moderated. This is expected to pick up from 4QFY23. Besides, margins are expected to improve to 8.2-8.4% given softening commodity prices. KTPL’s average EBITDA margin for the last five years has been ~10.5%.

Furthermore, the report on JMC Projects states that H1FY2023 revenue growth stood at 40%. Therefore, management’s guidance of 20-25% for the year looks conservative. Margins have expanded to 8.4% as compared to ~7% YoY during H1FY2023. Softening commodity prices should support margins in the coming quarters. Funding for road projects in FY23 will be 700 million – 800 million. With restructuring and revenue growth, it could reach Rs250 million mostly in FY24. An order book of Rs 200 billion has a mean book-to-bill of 3.2 times.

On valuation, MK’s note said, “We have rolled up our valuation to 23 December, with a TP of Rs 565. We value the core KPTL standalone business at Rs 428 per share (13.5 times on December 24 earnings) and JMC’s stock is priced at Rs 88./share (30% discount to proportionate value). Cash and other investments are valued at Rs 49.00 per share. We maintain buy on the stock. Short ordering remains a risk.

Kalpataru Power is a leading EPC company with capabilities in Power Transmission & Distribution, Oil & Gas Pipelines, Railways and Civil Infrastructure businesses. Presently, the company is executing projects in more than 30 countries and has a global footprint in 67 countries.

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