The Hindu Business Line : Kalpataru Power fired up on multiple triggers

THE Kalpataru Power Transmission stock today scaled its new 52-week high of Rs 456 and finally settled at Rs 436 at session's close with a gain of 13.08 per cent. Trading volumes were also hefty.

According to brokers and analysts, the stock is on a roll on multiple triggers.

The company, which designs, fabricates, constructs and erects power transmission networks (up to 800 KV) and sub-stations on a turn-key basis, is primarily on a growth line on the back of reforms and investment thrust in the power sector.

According to Mr Gaurav Dua of Anagram Stockbroking, the heightened activity in the transmission and distribution sector has not only improved the flow of orders for companies such as Kalpataru, but also payments by SEBs and has kept the margins at a stable level.

"A record capacity utilisation of the company points to the buoyancy currently enjoyed by Kalpataru," he said. It has recently bagged an order from Qatar worth Rs 93 crore and at the end of December quarter its order book position also showed a record figure of Rs 1,000 crore.

But much of the additional premium fetched by the stock can be attributed to its real estate business and newly acquired construction business. "The company is expected to show significant improvement in profitability from its real estate venture," Mr Dua added.

Mr Rajesh Agarwal of CD Equaisearch said the stock was attracting a higher P/E multiple than its peers because of its foray into areas which are hyper active now and promise more than average profit growth. "Despite the low gearing ratio and diversified interests, Kalpataru is attractively priced compared to others in the power transmission field," Mr Dua observed.

KPTL has stepped into gas pipeline construction projects and bagged orders from GSPL for construction of gas terminals. It has planned to step up its activity through investment in capacity expansion in power transmission, biogas and oil/gas pipeline.

The acquisition of JMC Projects, a listed construction company, during the current fiscal has also added fizz to the stock, the brokers added.

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