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Kalpataru Power Transmission Ltd.

BSE: 522287 Sector: Infrastructure
NSE: KALPATPOWR ISIN Code: INE220B01022
BSE 00:00 | 01 Feb 515.10 -0.40
(-0.08%)
OPEN

515.00

HIGH

524.30

LOW

512.85

NSE 00:00 | 01 Feb 515.35 0.05
(0.01%)
OPEN

517.90

HIGH

524.65

LOW

513.00

OPEN 515.00
PREVIOUS CLOSE 515.50
VOLUME 13230
52-Week high 591.10
52-Week low 332.30
P/E 20.72
Mkt Cap.(Rs cr) 7,670
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 515.00
CLOSE 515.50
VOLUME 13230
52-Week high 591.10
52-Week low 332.30
P/E 20.72
Mkt Cap.(Rs cr) 7,670
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kalpataru Power Transmission Ltd. (KALPATPOWR) - Chairman Speech

Company chairman speech

Our priority is accelerating profitable growth and transforming KPTL todeliver sustainable stakeholder value.

Dear Stakeholders

The financial year 2021-22 was characterised by severe second wave ofCovid-19 pandemic global geo-political conflicts high inflation and unprecedentedvolatility in commodity prices along with broad disruptions in the global supply chain.Against this challenging backdrop we have delivered a noteworthy financial performancedriven by top- line growth consistent profitability successful management of cost andimproved market leadership position. Combined with our execution excellence compellingbusiness portfolio customer connect and cost focused approach we have delivered a recordperformance year after year demonstrating the strength of our resilient business modelwhich is designed to succeed in any operating environment.

Improved Business Performance - Strong Financial Position and LeadingBusiness Portfolio

The financial year 2021-22 was a year of demand recovery and notableorder booking for KPTL and JMC on account of strong impetus on infrastructure developmentby Government revival of real estate sector pick-up in industrial activity and risingadoption of renewables. We quickly identified and responded to the cost inflationchallenge by successfully implementing cost reduction initiatives effective hedging andimproving operating efficiency to offset increased raw material and freight costs and atthe same time continuing to provide efficient project delivery to our customers.

I am happy to report that we have achieved turnover of Rs 14777 Croresat consolidated level with growth of 14% over the previous year. Our EBITDA marginremained healthy at 9% in 2021-22 which was lower than 2020-21 primarily due to costinflation. Our consolidated PAT was Rs 535 Crores with EPS of Rs 36.3 for 2021-22.

We have consistently demonstrated our track record of strong cashgeneration and efficient working capital management as we have reduced our consolidatednet debt by 17% from 2019-20 levels. Our net debt is at Rs 1902 Crores with a net debt toequity ratio of 0.43x. We continue to make considerable progress on our deleveragingjourney with improvement in working capital days record number of project closures anddivestment of T&D BOOT portfolio.

KPTL and JMC has a leading market position with a sound strategy aswe have successfully navigated the pandemic and volatile operating environment.Simultaneously we have also delivered a robust financial performance.

KPTL will continue with its deleveraging journey by actively looking toexit non-core businesses and improving its capital management.

We plan to complete restructuring on Wainganga Road Project andrefinancing for Vindyachal Road Project in 2022-23. In case of Kurukshetra Road Projectwe have issued notice of termination and handed over the asset in line with the provisionsof the concession agreement. These steps will improve the operational viability of RoadBOOT assets.

The Board of Directors clearly understands the importance of returns toshareholders and as a result of the Company's strong financial profile andconfidence in its strategy and growth outlook have proposed a dividend of Rs 6.5 pershare subject to approval of shareholders. KPTL continues to have a progressive dividendpolicy as we have consistently improved its dividend payout from 12% in 2019-20 to 25% in2020-21 and 19% in 2021-22. Going forward the Board aims to use the Company's freecash flow to fund its capex invest in new growth opportunities in the core business andmake further returns to shareholders as appropriate.

Our consolidated order book is at all-time high of over Rs 32761Crores and we have secured record new orders of Rs 18161 Crores in 2021-22. We havesignificantly improved our market position in T&D Water B&F and Urban Infrabusinesses during the year as we have secured several high value projects and diversifiedour global presence to 67 countries with addition of four new countries in 2021-22. We areconsistently improving our competitive position and business mix with emphasis onsegments and markets that have higher growth outlook & better margin profile.

In the T&D business we have secured single largest order till datein our history of Rs 3276 Crores in the South American market. At the same time wesecured our first international order for the B&F business in Maldives andstrengthened our Urban Infra business with two new road projects in Africa valuing over Rs2200 Crores. In our Water business we have achieved record order inflows of Rs 3286Crores in 2021-22 significantly expanding its geographical reach within India.

We continue with our strategy to enter and expand new markets andgenerate new revenue streams beyond our traditional markets. This is very well depictedwith the performance of our Sweden subsidiary; LMG has reported good growth in revenue andprofitability since our acquisition in April 2019 as we have almost double the size ofbusiness. In Fasttel Brazil we are strengthening the organisation alongside integratingtheir systems and process in-line with KPTL.

We continue to strengthen our market position through active businessmix management as we plan to secure new business from the high-growth segments like MetroRail Airports Data Centers and Heavy Civil Infrastructure. More than ever we arestrengthening our capabilities in civil electrical design and engineering areas fordomestic and international markets as we continue to expand our leadership position infocused EPC business.

We remain committed to scale-up our EPC business by expediting ourmarket reach driving superior project delivery balanced business portfolio acrosscustomers and markets and augmenting local presence in key geographies.

We are convinced that our wide global presence diverse business mixand strong execution capabilities provides us with competitive advantages and adoption ofdigital Industry 4.0 technologies enables us to sustained cost and qualitycompetitiveness. This will help us drive sustainable and profitable growth.

Strategic Enabler - KPTL-JMC Merger Digital & Sustainability

In 2021-22 we have commenced a number of business transformationinitiatives. The objective of these initiatives will be to help us drive growth in corebusiness improve profitability by optimising the portfolio and footprint improving theoverall cost base efficiency through operational and manufacturing excellence andImplementing the next phase of our strategic evolution will help us to better leverage ourexpertise and competence specifically in our key focus areas making KPTL more digitaland sustainable.

Implementing the sustainability agenda. These strategic initiatives aredriven with an objective to build a future proof organisation with a targeted revenue goalof USD 3 Billion by 2025.

One of the major step taken in this direction is the merger of JMC withKPTL. In February 2022 the Board of Directors of KPTL and JMC approved the scheme ofamalgamation of JMC with KPTL. This is a significant milestone for both the companies tounleash their growth potential and drive the next phase of growth. We believe combiningour two companies will create substantial long-term value for all our stakeholders.Moreover the merged entity will benefit from operational & cost synergies arisingfrom scale and size of the combined business. The merger will also enable us to bid forlarge size complex projects along with improved management bandwidth. The combined entitywill have a strong balance sheet and financial flexibility to invest in core EPC business.The process of getting necessary approvals for the merger are underway and progressing asper schedule. The merger is expected to be completed in 2022-23.

Our investment in technology infrastructure and digital tools hasallowed us to improve our project delivery react to situations with speed and ensure weare focused on value creation. In 2021-22 we focused on higher adoption of digitalisationacross the entire project ecosystem and driving project delivery through mechanisation andtechnology.

We are putting sustainability and ESG at the core of our strategy withclear ambition to improve our performance on KPTL firmly believes financial performancehas to be in-line with social and environmental performance. The goal is to sustainablycreate value.

Parameters related to decarbonisation occupational safety diversitysocial integration and corporate ethics. In doing so we want to align our sustainablegrowth in-line with the larger society and communities. We want to promote measures thatallow us to be more committed to the environment strengthen our social function withgreater safety more diversity and better human resources and continue to promote anethically responsible business culture. You can read more about our sustainabilityoutcomes in this integrated Annual Report.

Outlook

Governments around the world are giving high impetus to infrastructuredevelopment in order to stimulate economic activity post the pandemic. Infrastructurespending on transport infrastructure housing social infrastructure and clean energy hasbegun to rebound and is expected to grow significantly over the coming decade. MoreoverIndia continues to remain attractive destinations for investment with heighten focus byGovernment on increasing public capital expenditure infrastructure development andintroducing favorable reforms and policies like Make in India Digital India Power forAll Smart Cities Housing for All etc. Furthermore surge in oil prices will improveprospects and economic recovery in Middle East economies leading to higher capex andinfrastructure development opportunities in Gulf countries. These structural developmentsoffer tremendous growth potential for KPTL given its core competencies and strong globalfootprints in the EPC space.

Despite many macro uncertainties coupled with accelerating inflationKPTL has a decisive strategy in place to mitigate the inflationary pressures and we feelconfident about our ability to deliver consistent long-term performance and sustainablevalue creation. Furthermore the declining trend of commodity prices and stability inglobal supply chain will facilitate better project delivery.

On behalf of the Board of Directors I would like to thank ourcustomers subcontractors vendors bankers and shareholders for their trust in KPTL andour employees for their hard work and commitment.

Best Regards

Mofatraj P Munot Chairman

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