Motilal Oswal Initiates Coverage on Kalpataru Projects International with a Price Target of Rs 1500

Kalpataru Projects International (KPIL) Research Report

Company Overview Kalpataru Projects International (KPIL) has provided visibility into its addressable market for both its T&D and B&F segments, with a strong outlook for order inflows and execution over the next 2-3 years.

Market Analysis The company's exposure in the Middle East is limited to approximately 10% of its order book, with projects progressing normally, albeit with minor delays in dispatches. The recent gas shortage has not impacted its domestic manufacturing plants, which are operating at 80-85% utilization levels. Additionally, payment situations across its water projects have begun to improve.

Financial Projections With an order book of nearly INR633 billion, KPIL is expected to achieve a 18% CAGR in revenue, 20% CAGR in EBITDA, and 27% CAGR in PAT over FY25-28. We have marginally adjusted our estimates to reflect a strong order book and slightly lower margins.

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Recommendation We reiterate our BUY rating for KPIL with a SoTP-based Target Price (TP) of INR1,500, based on Mar'28 estimates. Key risks to our estimates include prolonged disruptions in the Middle East region, gas supply shortages extending beyond 1-2 months, a slowdown in ordering, and a spike in commodity prices, particularly steel.