Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
KALPATARU POWER
OUTPERFORMER (RS122, MCAP: RS18BN / US$413M)
• Kalpataru Power is a leading player in power transmission/ distribution and infrastructure.
• It has a diversified business portfolio across transmission EPC, oil & gas pipelines, biomass energy, agri-logistics, real
estate and infrastructure (roads, industrial structures, etc), with a focus on transmission and infrastructure.
• The company had an order backlog of ~Rs50bn at the end of Q3FY11 (1.7x FY11 revenues). The order intake in the
Oct-Dec 2010 quarter was Rs7bn (+68% yoy). The domestic transmission business accounted for Rs28bn (56% of total
order backlog), while international transmission orders were worth Rs17bn (34%). The infrastructure (pipeline)
segment had orders worth Rs3.75bn (8%), while the balance orders of Rs1.25bn were contributed by distribution.
• Key management inputs:
o Orders from PGCIL slowed down in 9MFY11, but are expected to increase in Q4FY11
o The power transmission business is witnessing increasing competition due to the entry of pure EPC construction
companies. However, Kalpataru is bidding cautiously and not trying to compete with the newer entrants by
quoting at lower margins. The current order backlog provides revenue visibility for the next 18 months
o The ‘Right of Way’ (RoW), a key clearance for transmission projects, is becoming difficult to obtain due to various
reasons – increased demand for land for transmission towers, slow decision making by the bureaucracy,
interference by local politicians, etc. These issues could cause up to 3-6 months of delay in project execution
o The cost of borrowing has increased by about ~100bp since April 2010 and is currently ~9.5%
o From a long-term strategic point of view, the company plans to enter the BOT segment due to higher margins
(~15%), v/s 10-11% for EPC projects
o Kalpataru is currently focusing on BOT projects in India, though the trend of developing transmission projects on
BOT basis is catching up in Brazil, Kenya and other African and South American countries.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
KALPATARU POWER
OUTPERFORMER (RS122, MCAP: RS18BN / US$413M)
• Kalpataru Power is a leading player in power transmission/ distribution and infrastructure.
• It has a diversified business portfolio across transmission EPC, oil & gas pipelines, biomass energy, agri-logistics, real
estate and infrastructure (roads, industrial structures, etc), with a focus on transmission and infrastructure.
• The company had an order backlog of ~Rs50bn at the end of Q3FY11 (1.7x FY11 revenues). The order intake in the
Oct-Dec 2010 quarter was Rs7bn (+68% yoy). The domestic transmission business accounted for Rs28bn (56% of total
order backlog), while international transmission orders were worth Rs17bn (34%). The infrastructure (pipeline)
segment had orders worth Rs3.75bn (8%), while the balance orders of Rs1.25bn were contributed by distribution.
• Key management inputs:
o Orders from PGCIL slowed down in 9MFY11, but are expected to increase in Q4FY11
o The power transmission business is witnessing increasing competition due to the entry of pure EPC construction
companies. However, Kalpataru is bidding cautiously and not trying to compete with the newer entrants by
quoting at lower margins. The current order backlog provides revenue visibility for the next 18 months
o The ‘Right of Way’ (RoW), a key clearance for transmission projects, is becoming difficult to obtain due to various
reasons – increased demand for land for transmission towers, slow decision making by the bureaucracy,
interference by local politicians, etc. These issues could cause up to 3-6 months of delay in project execution
o The cost of borrowing has increased by about ~100bp since April 2010 and is currently ~9.5%
o From a long-term strategic point of view, the company plans to enter the BOT segment due to higher margins
(~15%), v/s 10-11% for EPC projects
o Kalpataru is currently focusing on BOT projects in India, though the trend of developing transmission projects on
BOT basis is catching up in Brazil, Kenya and other African and South American countries.
No comments:
Post a Comment