Kalpataru Projects International Limited — Credit Ratings, 18-01-2025: Credit Rating

Revenue for Kalpataru Projects International Limited (KPIL) stood at ₹1,676 crore, representing a 17% year-on-year increase compared to ₹1,434 crore in the previous fiscal. This growth was driven by strong execution in the Transmission and Distribution (T&D) sector, along with contributions from water and other infrastructure projects.

Net profit remained stable at ₹533 crore, marginally up from ₹532 crore, while Earnings Per Share (EPS) was reported at ₹5.46. Profitability was supported by better-than-peers margins, although operational costs remained a concern due to external pressures on commodity prices, impacting overall efficiency.

Operational costs showed a slight increase but remained contained, reflecting KPIL's ongoing cost management efforts. The firm reported strong cash flow, highlighted by ₹833 crore in cash and equivalents, positioning it well for future obligations.

KPIL's balance sheet showcases a solid overall gearing ratio of 1.18 times, with moderating debt levels expected to improve due to a successful equity raise of ₹1,000 crore through a Qualified Institutional Placement (QIP). However, working capital intensity remains high, requiring prompt realization of current assets.

Strategically, KPIL's diversified order book, currently at ₹56,845 crore, offers considerable revenue visibility, with ongoing international projects providing additional stability. Market sentiment appears optimistic as the firm aims to mitigate working capital pressures through effective asset realization.

Investor insight suggests a 'buy' stance based on robust revenue growth, solid liquidity, and strategic positioning, although monitoring of working capital intensity will be crucial for sustained profitability.