Stock Tips: In the last one month, the shares of a power company have fallen by about four percent, but the brokerage firms are bullish about it and have fixed the target price for one year at about 56 percent profit from the current price.
Stock Tips: Shares of a power company have fallen by about four per cent in the last one month, but brokerage firms are bullish about it and have set a one-year target price at around 56 per cent profit from the current price. The sentiment of investors was affected due to the weak December 2021 quarter results of Kalpataru Power and its prices broke down but due to strong fundamentals, its price has strengthened by more than two percent in the last five days.
Kalpataru Power receives huge orders from the Railways, seeing that market experts have confidence in it. Analysts at brokerage firm Reliance Securities retained the buy rating of Kalpataru Power and maintained a one-year target price of Rs 608. This is about 56 percent more than the current price. Kalpataru Power had closed on NSE on 18 February at a price of Rs 389.
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For this reason, market experts have expressed confidence
According to market experts, strong transmission capex (capital expenditure) in domestic and global markets is expected to benefit Kalpataru Power. Experts at Reliance Securities believe that on the back of strong orders from Railways and a healthy order book, the revenue can grow at a CAGR of 11 per cent (Compound Annual Growth Rate) till the financial year 2021-2024, while its earnings from the decline in debt are expected to grow in the same period. can grow at a CAGR of 15%. In such a situation, investors can earn a profit of about 56 percent in a year on investment in this stock by keeping a target price of Rs 608 at the current price.
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No cut in estimates of revenue-net profit for the next two financial years
Kalpataru Power’s revenue fell 7 per cent year-on-year in the third quarter October-December 2021 of the current financial year, but it increased by 14 per cent on a quarterly basis to Rs 1850 thousand crore, which was less than the market experts’ estimate of Rs 2270 crore. The company’s Adjusted Profit After Tax (Adj PAT) also declined by 15 per cent on a yearly basis but was higher by 50 per cent on a quarterly basis. The profit of the company was affected due to spending more money on interest. Reliance Securities has forecast a 6 per cent decline in revenue in FY 2022 due to lower execution in the December 2021 quarter, while it has also cut its net profit (PAT) estimate by 17 per cent in the December 2021 quarter due to lower margins. However, for FY 2023 and FY 2024, the brokerage firm has not made any change in its estimates of revenue and net profit.
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