Anand Rathi upgrades Kalpataru Proj to 'Buy' on strong order visibility

Kalpataru Projects has secured orders worth ₹19,500 crore in FY26 year-to-date (Y-T-D), led by Buildings & Factories (B&F) (56 per cent) and Transmission & Distribution (T&D)/Urban (44 per cent).

Anand Rathi has upgraded its rating on Kalpataru Projects International to ‘Buy’ and raised its target price to ₹1,408 from ₹1,351, citing strong order momentum and improving working capital and leverage metrics.

Order inflows remain strong

The company has secured orders worth ₹19,500 crore in FY26 year-to-date (Y-T-D), led by  Buildings & Factories (B&F) (56 per cent) and Transmission & Distribution (T&D)/Urban (44 per cent). With an L1 pipeline of ₹7,000 crore, the brokerage said Kalpataru Projects appears on track to meet its FY26 order inflow target of ₹25,000 crore.

 

Kalpataru Projects’ consolidated order book stands at ₹63,300 crore, offering revenue visibility of about 2.8x trailing twelve-month (TTM) revenue, the note added.

Earnings outlook 

With a large share of orders in higher-margin segments, the brokerage expects earnings growth to remain durable. Management expects margins to improve further as legacy orders are completed. In 9MFY26, consolidated profit before tax (PBT) margin rose about 80 basis points (bps) to 5.3 per cent, ahead of the company’s targeted 50 bps improvement, the report said.  ALSO READ | Paras Defence shares rise 4% as it acquires 49% stake in Himanshi Thermal

Working capital and debt trend improve

Standalone net working capital (NWC) improved to 97 days, down 16 days year-on-year (Y-o-Y), which helped reduce standalone net debt by about ₹454 crore Y-o-Y to ₹2,240 crore as of December 31, 2025. The improvement was aided by recovery of Jal Jeevan Mission (JJM) receivables, with further improvement expected on higher disbursements in the water segment and better payment cycles in Q4, the note said.

Q3 performance beats estimates

The company reported revenue of ₹5,780 crore in Q3FY26, ahead of the brokerage’s estimate of ₹5,660 crore, driven by strong traction in T&D, B&F, oil & gas and urban infrastructure.

 

The report said the profit before tax (PBT) margin improved 31 basis points Y-o-Y, supported by:

 

• A favourable mix, with around 70% of the order book (OB) coming from B&F and T&D, which operate at double-digit margins, and
• Lower finance costs aided by an improved net debt position.
• Valuation and changes to estimates

The brokerage raised its revenue estimates by about 5 per cent for FY27E and 9 per cent for FY28E, and reiterated that the stock’s valuation is supported by a strong order book, execution momentum, improving receivables and potential monetisation of road assets.   ALSO READ | Data Patterns soars 41% in one month, nears record high; here's why

Key risks

Risks flagged include execution delays, volatility in key raw material prices, and labour availability constraints.

 

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