Sell Kalpataru Power, target of Rs 516: IIFL
June 17th, 2009
IIFL has recommended a sell rating on Kalpataru Power, with 12-month price target of Rs 516, in its report dated June 15, 2009.
“At the very least, financials would continue to be dragged down by interest costs pertaining to working capital employed in the contract. Interest costs in 4Q increased 50% QoQ to Rs302m, resulting in 54% YoY decline in profits. We forecast earnings will remain flat in FY10, with margins declining by 70 bps YoY owing to low margins in contracts won in new verticals. An adverse outcome in this contract would result in downsides to our estimates. We maintain ‘SELL’, with target price of Rs 516,” says IIFL’s research report.