Kalpataru Power Transmission (KALPOW) - ICICI Direct

Valuations
Execution rates have certainly improved over the last couple of quarters
as exhibited by revenue growth of over 20% YoY. However, at the same
time margins have taken a back seat owing to a structural shift in the
composition of backlog (shift towards international orders). A pick-up in
margins will be the key catalyst, going ahead. We continue to value KPTL
on an SOTP basis (roll our valuations on FY14E and ascribe multiple of 7x
for base business and 20% holding company discount to M-Cap of JMC)
and arrive at a target price of | 98/share.
Exhibit 10: Valuation snapshot
Exhibit 11: Twelve months forward P/E
(X)
12
10
8
6
4
2
0
Apr-11
May-11
Jun-11
ICICI Securities Ltd | Retail Equity Research Page 6
Jul-11
Aug-11
Sep-11
Oct-11
Source: Company, ICICIdirect.com Research
Stake held Estimated Value Contribution to KPTL Methodology
% | crore | crore |/share
Standalone Business 100 1,348 1,348 88 7X FY14E EPS
JMC Projects 69.4 281 156 10
Total SOTP valuation 1,629 1,504 98
Source: Company, ICICIdirect.com Research
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
12 m Forward P/E
Apr-12
May-12
Jun-12
Jul-12
20% discount to current
market cap
Aug-12
Sep-12
Oct-12
Nov-12