Kalpataru Power Transmission - Kotak

Kalpataru Power Transmission Limited (KPTL) reported Q4FY12 numbers in line with our estimates on revenue and profitability front. Slower execution in domestic T&D projects has led to YoY decline in FY12 reported PAT.

Stock has been underperforming the broader market through past two quarters. Muted order book growth and company's fund raising in last fiscal that has met with skepticism are the primary reasons for this.

We reduce our earnings estimate for FY13 to factor in 1) increasing competition in domestic market leading to pricing pressure 2) increase in raw material prices 3) continuing wage inflation.

We maintain our recommendation to 'Accumulate' with a one year DCF based target price of Rs.91 (Rs 130 earlier).

Source : Equity Bulls

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