Kalpataru Power Transmission (KALPOW) - ICICI Direct

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The standalone order backlog at | 6100 crore renders good revenue visibility for FY13E and FY14E. KPTL won orders worth | 600 crore during Q2FY13. On a consolidated basis, the backlog stands at | 11300 crore (KPTL+JMC Projects) Exhibit 2: Assumption sheet (%) FY11 FY12 FY13E FY14E Order inflow growth 25.6 8.7 4.5 15.1 Order backlog growth 10.0 10.9 8.5 11.1 Revenue Growth 9.3 6.8 15.3 7.6 EBITDA margins 11.6 10.9 10.4 10.5 PAT Growth 9.5 -12.8 4.4 11.9 Source: Company, ICICIdirect.com Research Order backlog and inflow analysis: • The company has a strong carry forward of orders at | 6100 crore, presenting strong revenue growth ahead • With | 600 crore of new orders added during the quarter, the company had been able to maintain an order replacement ratio of 0.84x • Of the total order book, 50% is on a variable cost basis while the rest are on fixed cost basis (international orders) • KPTL is already L1 in six large orders that it expects to flow in by Q3FY13. Of these, four projects are from international markets while the remaining two are from domestic markets • JMC has an order backlog of | 5200 crore with new order wins during the quarter amounting to | 250 crore Exhibit 3: Trend of order backlog for standalone business (| Crore) . 7000 6000 5000 4000 3000 2000 1000 0 5200 5000 4800 5000 5000 Q3FY10 ICICI Securities Ltd | Retail Equity Research Page 2 Q4FY10 Q1FY11 Q2FY11 Source: Company, ICICIdirect.com Research Q3FY11 5500 Q4FY11 5900 6000 Q1FY12 Q2FY12 5500 Q3FY12 6100 6170 6100 Q4FY12 Q1FY13 Q2FY13
KPTL received orders worth | 600 crore. Of the overall standalone order book, 50% have a price variation clause. For JMC Projects, the total order book is |5200 crore. The order replacement ratio stood at 0.84x Current book to bill ratio at 1.9x renders visibility into FY13E and FY14E provided execution remains stable. In terms of order backlog break-up, transmission orders continue to dominate with a nearly 901% share in the backlog, with infrastructure and distribution segment combined having a tenth share in the backlog Exhibit 4: Trend in order inflows (| Crore) . 2500 2000 1500 1000 500 0 429 Q3FY10 ICICI Securities Ltd | Retail Equity Research Page 3 652 Q4FY10 345 Q1FY11 842 804 Q2FY11 Source: Company, ICICIdirect.com Research Exhibit 5: Book to bill trend (on TTM basis) (x) 2.5 2.3 2.1 1.9 1.7 1.5 1.3 1.1 0.9 0.7 0.5 Q3FY10 2.3 Q4FY10 1.9 Q1FY11 1.8 Q2FY11 Source: Company, ICICIdirect.com Research 1.8 Revenue and profitability analysis Q3FY11 Q3FY11 1.8 1401 Q4FY11 Q4FY11 1.9 995 Q1FY12 Q1FY12 2.0 694 Q2FY12 Q2FY12 2.1 315 Q3FY12 Q3FY12 1.9 2000 Q4FY12 Q4FY12 2.0 650 600 • Led by a strong execution, revenues jumped a handsome ~22% YoY. Of the total revenues, 89% was booked from transmission, 10% from infrastructure & power and 1% from DMC • EBITDA margins at 8.9% were noticeably below our expectations of 10.5% and the management’s guidance of 10-10.5% for the full year. • A favourable rupee movement led to forex saving in finance cost of | 2 crore, thereby bringing the same down to | 25.7 crore from | 31.4 crore in the last quarter • JMC Projects reported a strong topline growth of 43.0% to | 606.6 crore. However, weaker EBITDA margins played spoilsport owing a sharp rise in raw material costs. The management has further revised down the EBITA margins expectation from the last quarter of 6.0-6.5% to 5-6.0% level in the current quarter • Given the strong order book and consequent revenue visibility, we estimate the topline and bottomline will grow at a CAGR of 11.4% and 8.0% over FY12-14E, respectively, for the standalone business Q1FY13 Q1FY13 2.0 Q2FY13 Q2FY13 1.9
Page 1: Result Update Rating matrix Rating
Page 5 and 6: Exhibit 8: Trend in segmental EBIT
Page 7 and 8: Financial summary Profit and loss s
Page 9: RATING RATIONALE ICICIdirect.com en

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