KALPATARU POWER TRANSMISSION
Kalpataru is a transmission engineering, procurement and construction (EPC) company. The company holds 67% stake in JMC Projects through which it carries construction activities. During Q1FY18, the company’s revenue de-growth in transmission business was duly offset by 17% and 27% YOY growth in railway and piping businesses, respectively. Annually, the company has reported 13.8% and 39.8% revenue and PAT growth, respectively. The company holds robust order book at 975 crore as of June 2017, of which 43% comprise international orders, providing revenue visibility for over two years, while JMC too holds order book of 7000 crore till Q1FY18. Going forward, the company is also likely to benefit from high transmission capex by domestic and global markets. Power Grid SEB’S would invest 45,000 crore for improvement of intra-state transmission network. Thereby, considering strong order book of self and subsidiaries and the government spending, we recommend Buy in the scrip for a target of 418 and with a stop loss of 340.