Kalpataru Projects International and Paradeep Phosphates: Weekly Recommendations

The two stocks recommended by SMC Global Securities’ Research Team this week are Kalpataru Projects International and Paradeep Phosphates. These two stocks have shown great potential with positive financial estimates for the next two financial years. So, let’s go through the details of the two stock recommendations for the period between April 21, 2025 and April 25, 2025.

Kalpataru Projects International Limited

Kalpataru Projects International share price is ₹940 (as on April 17, 2025) and its target price is set at ₹1,082 with an upside potential of 15%.

Kalpataru Projects International Limited: Investment Rationale

• Kalpataru Projects International (KPIL) is a part of the Kalpataru Group, a diversified conglomerate with interests in EPC and real estate. KPIL is involved in the EPC segment, primarily in the power T&D sector, railway infrastructure, and oil & gas infrastructure, and has a presence in 70 countries.
• The company witnessed a strong momentum in order booking across T&D, B&F, Water & Urban Infra business. The order book stood at ₹61,429 crores as on 31st Dec 2024 and additional L1 of ₹2,500 crores. Recently, it has bagged fresh orders worth ₹2,366 crores, including T&D projects in India and abroad and a repeat B&F order from key clients.
• The management of the company highlighted strong traction in the HVDC segment driven by rising power demand and renewables. With this, FY25 order intake reaches ₹24,850 crores, ensuring strong execution visibility and sustained growth, which provides good visibility for growth going forward.
• Its international order book has seen strong growth backed by significant wins across the Middle East, Africa, Europe, and Latin America. Its global subsidiaries like LMG (Brazil) and Fasttel (Sweden) reported record performance, highlighting KPIL’s expanding international footprint and robust overseas business momentum.

• Moreover, KPIL is well-positioned to capitalize on the estimated ₹2.5-3.5 trillion investments in India’s power T&D sector by 2029. The company is also targeting upcoming tenders worth ₹25,000-30,000 crores in High Voltage Direct Current (HVDC) projects over the next 3-6 months.
• On a consolidated basis, the company reported Q3 FY25 revenue of ₹5,732 crores, reflecting a 17% Y-o-Y growth. EBITDA increased by 13%, with a margin of 8.4%. Segment-wise, T&D grew 42%, B&F 26%, and Oil & Gas saw an impressive 123% rise. The water business underperformed due to delays in JJM projects, though improvement is anticipated with higher government allocations.
• Consolidated net debt declined 27% QoQ to ₹2,694 crores, while stand-alone net debt dropped 35% to ₹1,820 crores. Net working capital days improved, reducing by 6 days to 112 (stand-alone) and by 4 days to 94 (consolidated).
• The company continues to invest in capex, supported by a strong order backlog and improved visibility. Focus remains on owning construction equipment to boost competitiveness and execution efficiency.
• The management of the company expects EBITDA margins to improve, focusing more on PBT guidance. Double-digit margins are targeted, depending on execution and order inflows. While cautious on the Water segment short-term, long-term outlook is positive. Strategic focus remains on large T&D and B&F projects, supported by strong pipelines and infrastructure opportunities.

Kalpataru Projects International Limited: Shareholding Pattern

Institutions’ shareholding is highest in Kalpataru Projects International at 45.85%.

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 ₹1,082 in 8 to 10 months’ time frame on 3 year’s average P/BVx of 2.54x and FY26 BVPS of ₹426.

Kalpataru Projects International Limited: Risk

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

Paradeep Phosphates Limited

Paradeep Phosphates share price is ₹135.70 (as on April 17, 2025) and its target price is set at ₹172 with an upside potential of 27%.

Paradeep Phosphates Limited: Investment Rationale

• Paradeep Phosphates Ltd (PPL) is a leading company in India’s phosphatic fertilizer industry, with a total production capacity of 3 million metric tonnes (MMT), including 2.6 MMT of phosphates and 0.4 MMT of urea.
• Its two manufacturing units in Paradeep, Odisha (1.8 MMT), and Zuarinagar, Goa (1.2 MMT), produce a wide range of fertilizers, including DAP and various NPK grades (N10, N-12, N-14, N-19, N-20, N-28), as well as urea. PPL caters to over 9 million farmers through 70,000 retail points across 15 Indian states and supplies industrial products such as gypsum, HFSA, sulphuric acid, and ammonia.
• It plans to invest ₹4,000 crores over five years to increase the Phosphatic Fertiliser manufacturing capacity in both intermediate and final products including Port/Jetty and infrastructure development. Alongside, this strategic investment will increase production capacity, reduce environmental impact, and contribute to agricultural growth.
• The company’s sulphuric acid expansion is on track, increasing capacity from 1.39 MMTPA to 2.0 MMTPA, targeted for completion by Q3 FY26.

• On the backward integration front, its sulfuric acid capacity expansion from 1.3 million tons per annum to 2 million tons per annum remains on track for completion by Q3 FY’26, supporting its phosphatic acid integration strategy.
• Additionally, it has completed the first phase of the energy-saving initiative at the Goa plant, which is expected to yield efficiency gains and cost savings in the coming quarters.
• The company has received no objection for the merger of Mangalore Chemicals and Fertilisers Ltd into the company and the company is expected to file the Scheme of Arrangement with the NCLT in due course. Post-merger, the combined capacity would increase to 3.6 MMT to become one of the leading private-sector fertiliser companies in India.
• The merger is expected to enhance economies of scale, improve resource efficiency, and boost market competitiveness. PPL’s strong presence in North, Central, and East India complements MCFL’s dominance in South India, creating a diversified market reach. According to the management, the merger is expected to be completed by next year.
• In Q3 FY25, revenue quality improved with higher production, primary sales, and POS sales. Revenue was up by 58% YoY to ₹4,104.9 crores, EBITDA was up by 27.6% to ₹371.5 crores and PAT was up by 45.7% to ₹158.8 crores.

Paradeep Phosphates Limited: Shareholding Pattern

In the overall shareholding of Paradeep Phosphates, promoters have the highest shareholding at 56.05%.

Paradeep Phosphates Limited: Valuation

Paradeep Phosphates Limited has efficient raw material sourcing, strong backward integration, diverse product mix, extensive distribution network and deep rooted relationships with channel partners and farmers.

Paradeep is well-positioned for sustained growth with new capacity additions and market penetration post-merger. Looking ahead, it remains focused on optimizing its fertilizer mix, managing the raw material price fluctuations, and driving operational excellence.

Thus, it is expected that the stock may see a price target of ₹172 in 8 to 10 months’ time frame on the current P/BV of 2.94x and FY26 BVPS of ₹58.50.

Paradeep Phosphates Limited: Risk

• Government’s Policy and Subsidy Payouts
• Global Uncertainties

Conclusion

These two stocks, one from the engineering & construction sector and other from the fertilizer 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.