Kalpataru Power reported Q3FY11 numbers largely in line in revenue and PAT terms, driven by stable execution in T&D segment. The company also reported good traction in new orders for the quarter led by transmission and distribution segment and expects a further traction in the coming quarter.
The company reported a 30 bps yoy improvement in Ebitda margins during the quarter, which on a 9MFY11 basis remained stable at 12.1%.
While T&D segment saw a 54 bps margin pressure on Ebit level, infrastructure division posted a 200 bps improvement in margins despite a flattish revenue growth in Q3FY11. Management expects OPMs to improve going forward owing to healthy order book mix.
While Q3FY11 order intake for KPTL grew by 56% yoy to Rs 700 crore, it declined marginally by 6.5% yoy on a 9M basis to Rs 1,860 crore. Management expects an improving traction in order intake in the next 5-6 weeks from PGCIL and has bid for Rs 4,000 crore worth of T&D tenders recently.
The company currently has an outstanding OB of Rs 5,000 crore on standalone basis and Rs 9,300 crore (ex L1) on a consolidated basis, which should be sufficient for the next 18-20 months of revenues for KPTL.
More than 66% of the standalone OB for KPTL comes from the domestic markets and balance from export markets. Management expects to conclude FY11 with an outstanding OB of Rs 5,500 crore, implying a 10% yoy growth.
While JMC has reported a flattish PAT growth for 9MFY11, the management sounded positive about the next 5-6 quarters expecting OPMs to rise from current levels.
We maintain our hold rating for KPTL. The stock currently trades at a PE of 10.2 and 9.2 for FY11E & FY12E basis, respectively.
Edelweiss