Kalpataru Projects’ record order book supports resilient EPC growth despite Middle East disruptions
Kalpataru Projects International Ltd.
BUY
₹1,440
₹1,405
₹1,725
19.79%
Investment View and Valuation
In its August 12, 2026 result update, ICICI Securities retained its BUY recommendation on Kalpataru Projects International Ltd. (KPIL). The investment case is based on resilient core EPC execution despite Middle East disruptions, a record order book, structural transmission and distribution (T&D) opportunities, improving profitability and a stronger balance sheet.
ICICI Securities values KPIL at 20 times FY28E EPS and has a target price of Rs 1,725 per share, compared with the current market price of Rs 1,440.
Q1 FY27 Financial Performance
| Particular | Q1 FY27 | Year-on-year change |
|---|---|---|
| Consolidated revenue | Rs 6,408 crore | Up 4% |
| Comparable core revenue, excluding Road SPVs and Brazil | Rs 6,396 crore | Up 9% |
| EBITDA | Rs 562 crore | Up 7% |
| EBITDA margin | 8.8% | Improved by 26 basis points |
| PAT | Rs 312 crore | Up 46% |
| PAT margin | 4.9% | Up from 3.5% |
Comparable core revenue remained resilient despite labour shortages early in the quarter and Middle East-related supply-chain disruption. The improvement in profitability reflected operating leverage, a favourable business mix and disciplined working-capital management.
Segment Performance
| Segment | Q1 FY27 revenue | Year-on-year change | Key development |
|---|---|---|---|
| Transmission and Distribution | Rs 2,924 crore | Up 10% | Largest core segment, accounting for about 46% of core revenue; supported by execution and an expanding presence in HVDC and GIS substation projects. |
| Buildings and Factories | Rs 1,588 crore | Up 15% | Aided by project progress and business mix. |
| Oil and Gas | Rs 693 crore | Up 18% | Supported by the Saudi project. |
| Urban Infrastructure | Rs 295 crore | Up 15% | All tunnel-boring machines were fully utilised. |
| Water | Rs 626 crore | Down 7% | Affected by slower Jal Jeevan Mission execution and collections. |
| Railway | Rs 195 crore | Down 23% | KPIL focused on execution and project closures. |
Record Order Book and Execution Visibility
Order visibility is central to ICICI Securities’ positive view. Q1 FY27 year-to-date order inflows were Rs 7,668 crore, with another approximately Rs 7,300 crore of L1 or favourably placed projects. The consolidated order book reached a record Rs 66,607 crore as of June 30, 2026.
T&D and Buildings and Factories accounted for 91% of year-to-date inflows. The order book mix was as follows:
| Segment | Share of order book |
|---|---|
| Transmission and Distribution | 44% |
| Buildings and Factories | 29% |
| Water | 11% |
| Oil and Gas | 6% |
| Urban Infrastructure | 6% |
| Railways | 4% |
| Domestic projects | 69% |
| International projects | 31% |
Growth Opportunities and Management Guidance
Management retained guidance for at least 15% FY27 revenue growth and more than 75 basis points of PBT-margin improvement. It is targeting Rs 30,000 crore of FY27 order inflows and indicated that guidance could be revised upward by the end of Q2 FY27.
- Management estimates a domestic T&D addressable market of Rs 1.0 lakh crore to Rs 1.25 lakh crore annually for at least five years, supported by renewable-energy evacuation and electricity demand.
- KPIL secured Rs 4,163 crore of T&D orders year to date and had more than Rs 5,000 crore of related L1 projects.
- Buildings and Factories secured more than Rs 2,800 crore of orders, and its order book exceeded Rs 19,600 crore.
- KPIL won its first Middle East Water-treatment project, worth Rs 344 crore.
- The company is selectively evaluating opportunities in BESS, pumped storage, nuclear power and international roads and highways, although these newer opportunities remain at an early stage.
Balance Sheet and Financial Outlook
Financial flexibility improved during the quarter. Net working capital declined to 80 days in Q1 FY27 from 91 days a year earlier, while consolidated net debt fell 67% year on year to Rs 917 crore. Management plans approximately Rs 800 crore of FY27 capex and is targeting sub-100-day working capital.
ICICI Securities forecasts revenue and PAT CAGRs of 14.8% and 18.9%, respectively, over FY26 to FY28E.
Key Risks
- Lower-than-expected order inflows.
- Delay in monetisation of non-core investments.
Disclaimer: This is a summary of a research report published by the broker/research house identified above. The views, recommendations, target prices and estimates are those of the respective broker and do not represent DSIJ investment advice. The summary may be AI-assisted, hence please refer to the original report for complete details, disclosures and risks.
