HDFC Securities: Kalpataru Power Transmission’s Recovery In Sight
Transmission towers stand near the Shin Kori nuclear facility in Ulju, Ulsan province, South Korea. (Photographer Jean Chung/Bloomberg)

HDFC Securities: Kalpataru Power Transmission’s Recovery In Sight

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

HDFC Securities Report

Key takeaways from Kalpataru Power Transmission Ltd.’s FY20 Annual report are as follows:

1) geographically a well diversified order book and robust bid pipeline;

2) standalone profitability stable and moderate; consolidated profitability dragged by subsidiaries performance, mainly pertaining to build-operate-transfer (BOT) assets;

3) while borrowings increased by 25%, it is still quite comfortable (net debt to equity ratio at 0.29); and

(4) investment/loans worth Rs 1,650/Rs 320 million given to Shree Shubham Logistics Ltd.

Multiple triggers are in place for further rerating with:

1) resumptions of near 75-80% execution in Jun-20, (2) likely receipts of monetisation proceeds of three build-own-operate-transfer (BOOT) transmission assets during FY21E worth Rs 10 billion plus, and (3) restructuring of JMC Project India Ltd. three Roads BOTs, which shall reduce cash burnout.

The overhang of the promoter group’s real estate exposure will continue to restrict multiple rerating.

Click on the attachment to read the full report:

HDFC Securities Kalpataru Power - Annual Report Analysis .pdf

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