Indian Bank and Kalpataru Projects International: Weekly Recommendations

The two stocks recommended by SMC Global Securities’ Research Team this week are Indian Bank and Kalpataru Projects International. These two stocks have shown great potential with positive financial estimates for the next financial year. So, let’s go through the details of the two stock recommendations for the period between June 9, 2025 and June 13, 2025.

Indian Bank

Indian Bank share price is ₹636 (as on June 6, 2025) and its target price is set at ₹758 with an upside potential of 19%.

Indian Bank: Investment Rationale

• The business of the bank has increased 8% YoY to ₹13,25,294 crores end March 2025, driven by a 10% surge in advances to ₹5,88,140 crores. Deposits rose 7% to ₹7,37,154 crores at end March 2025.
• Indian Bank is targeting deposit growth of 8-10% and advances growth of 10-12% for FY2026. The bank is targeting corporate credit growth of 9%.
• Advances growth was driven by retail loans rising 14% YoY to ₹1,19,097 crores at end March 2025, while credit to agriculture increased 14% to ₹1,37,627 crores and MSME 12% to ₹94,152 crores at end March 2025. The corporate credit has risen 4% to ₹1,95,407 crores end March 2025. The overseas credit has jumped 18% to ₹41,857 crores end March 2025.

• The CASA deposits of the bank increased 1% YoY to ₹2,82,854 crores at end March 2025. The current account deposits increased 2% to ₹39,630 crores, while savings account deposits rose 1% to ₹2,43,224 crores end March 2025.
• The bank has posted 6% growth in net interest income (NII), while the core fee income of the bank declined 5% in Q4 FY2025 and the Net Interest Margin (NIM) of the bank stood at 3.37% in Q4 FY2025. The bank expects net interest margin at 3.15-3.30%, ROA at 1.2%, and cost-to-income ratio at 55% for FY2025.
• The bank has continued to improve asset quality in Q4 FY2025. The ratio Gross NPA declined to 3.09% as of 31 March 2025 as against 3.95% as on 31 March 2024. Net NPA reduced to 0.19% as on 31 March 2025 as compared to 0.43% as on 31 March 2024.
• Provision coverage ratio improved to 98.10% as on March 2025 as against 96.34% as on March 2024. The bank aims to reduce the GNPA ratio below 3%, while the net NPA is expected to be maintained at the current level of around 0.19%.
• The bank expects to reduce the fresh slippage ratio below 1% in FY2026 as against the fresh slippage ratio of 1.19% for FY2025. The bank expects to keep credit cost below 1% in FY26 against the credit cost of 0.66% for FY2025. The bank proposes to book treasury gains as per the requirements and market conditions.

Indian Bank: Shareholding Pattern

Promoters’ shareholding is highest in Indian Bank at 73.84%.

Indian Bank: Valuation

Indian Bank has been consistently delivering on improving asset quality, cost efficiency, other income, and productivity in the past few quarters. Its proactive tech integration ensured a smooth transition.

It is one of the best mid-cap PSBs with strong capital ratios across cycles and the ability to deliver relatively stronger return ratios as growth accelerates.

Thus, it is expected that the stock may see a price target of ₹758 in 8 to 10 months’ time frame on a current P/BV of 1.38x and FY26 (E) BVPS of ₹549.17.

Indian Bank: Risk

• Economic slowdown
• Deterioration in asset quality

Kalpataru Projects International Limited

Kalpataru Projects International share price is ₹1,148 (as on June 6, 2025) and its target price is set at ₹1,306 with an upside potential of 14%.

Kalpataru Projects International Limited: Investment Rationale

• Kalpataru Projects International Limited is a specialized EPC company engaged in Power Transmission & Distribution, Buildings & Factories, Water Supply & Irrigation, Railways, Oil & Gas Pipelines, Urban Mobility (Flyovers & Metro Rail), Highways, and Airports. KPIL is currently executing projects in over 30 countries and has a global footprint in 75 countries.
• Order inflows for FY25 stood at ₹25,475 crores, leading to the highest ever closing order book of ₹64,495 crores as on 31st March 2025. International order accounts for 41% of the total order book.
• According to the management, the majority of these orders are at better margins and contributed by our flagship T&D and B&F businesses. It has received orders of ₹2,372 crores till date in FY26.
• The company continues to further diversify the mix, expand to new markets, and improve market position in existing business as it expects order inflows in the range of ₹26,000 crores to ₹28,000 crores for FY2026. It expects 20% revenue growth and PBT margin of 4.5% to 4.75%, which is an improvement of closer to 100 basis points as compared to FY 2025.

• It continues to relentlessly focus on securing complex large-size EPC projects, expanding global reach, investing in capex to improve competitiveness, strengthening the team, and improving delivery capabilities.
• According to the management, FY26 has strong business visibility in the domestic and international markets backed by global focus on energy transition and creation of sustainable infrastructure. It expects to improve the revenue growth trajectory on the back of a strong order backlog and proven execution capabilities.
• Net debt is at its lowest level in recent years at ₹1,953 in FY2025, driven by improved working capital, prudent capital management, and funds raised through the QIP.
• The company is targeting to complete the divestment of Vindhyachal Expressway and the sale of the balance inventory in the Indore Real Estate Project in FY26, which will further strengthen the balance sheet and return ratio.
• During the quarter ended March 2025, the company reported revenue growth of 18% to ₹5,971 crores. EBITDA margin was flat at 7.6%. EBITDA was up by 19% to ₹452 crores. APT was up by 29% to ₹169 croгes.

Kalpataru Projects International Limited: Shareholding Pattern

In the overall shareholding of Kalpataru Projects International, institutional investors have the highest shareholding at 45.03%.

Kalpataru Projects International Limited: Valuation

Kalpataru Projects International Limited has strengthened its capabilities by expanding civil business internationally, securing large T&D orders in India and abroad, and entering sectors like airports, solar EPC, and data centers.

With a strong balance sheet, improved working capital and divestment of non-core assets, the company remains positive about growth prospects in power transmission, building, metro rail, and international Oil & Gas projects.

Thus, it is expected that the stock may see a price target of ₹1,306 in 8 to 10 months’ time frame on current P/BVx of 3.01x and FY26 BVPS of ₹434.

Kalpataru Projects International Limited: Risk

• Elevated logistics costs and volatility in commodity and currency
• Geo-political issues

Conclusion

These two stocks, one from the banking sector and other from the EPC sector can reach their target price in the coming 8 to 10 months. However, it is always better if you do your analysis before investing and set a stop-loss target. To keep track of your invested stocks, open demat account with SMC Global Securities and invest on the go.

Reference:
https://www.smctradeonline.com/research/wise-money/241

Author: All Content is verified by SMC Global Securities.