Kalpataru Projects International: Buy Recommendation with Target Price of Rs 1466 by Prabhudas Lilladher

Kalpataru Projects International Research Report

Resilient Growth Outlook

Kalpataru Projects International (KPIL) is expected to maintain a strong growth outlook driven by a robust transmission and distribution (T&D) pipeline across geographies. International markets are anticipated to outpace domestic markets, supported by better margins and payment cycles.

Segmental Performance

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• B&F (Building and Factories) segment continues to witness strong traction, led by data centers and core infrastructure, with sustained double-digit growth visibility.
• O&G (Oil and Gas) business is witnessing improving traction in international markets, with a ~$1 billion opportunity pipeline over the next 2 years.
• Railways segment remains weak with limited incremental opportunities, prompting selective participation.
• Water segment is expected to gradually improve driven by better collections under JJM 2.0.
• Urban Infra business remains in a scale-up phase, with revenue expected to reach ~INR70 billion by FY29.

Valuation and Recommendation

The stock is trading at a P/E of 15.4x/12.4x on FY27/28E core-EPS. We maintain our 'BUY' rating, valuing the core business at a P/E of 16x Mar'28E, arriving at a revised SoTP-derived TP of INR1,466. Our cautious stance on KPIL's Middle East exposure is factored into this valuation.

Key Highlights

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• Limited Middle East exposure (10-11% of order book)
• Near-term execution may see minor slippages (~INR2 billion)
• Medium-term opportunities remain intact