This Power Transmission Stock Jumps by 9 per cent to Intraday High as the Company Completes Acquisition of Kalpataru Power DMCC

In the last 3 years, the stock price has given 144 per cent returns to its shareholders.

On Thursday, shares of Kalpataru Projects International Ltd jumped by 8.97 per cent to its intraday high of Rs 979 as the company announced that it has successfully completed the acquisition of Kalpataru Power DMCC.

Kalpataru Projects International Ltd (KPIL) has announced the completion of its acquisition of 100 per cent equity shares of Kalpataru Power DMCC (KP DMCC), a step-down wholly owned subsidiary. The transaction was executed by purchasing 1,000 equity shares from Kalpataru Power Transmission (Mauritius) Ltd, a wholly owned subsidiary of KPIL. As a result, KP DMCC has now become a direct wholly owned subsidiary of KPIL, effective 3rd March 2025. The company confirmed that there has been no change in its effective percentage shareholding in KP DMCC.

KPIL had initially informed stock exchanges on 10th January 2025 about entering into a Share Sale and Purchase Agreement (SSPA) with its wholly owned subsidiary, Kalpataru Power Transmission (Mauritius) Ltd, to purchase the entire stake in KP DMCC.

KP DMCC operates in the United Arab Emirates (UAE) under a Service Activity license issued by the Dubai Multi Commodities Centre (DMCC). The total consideration for acquiring the 100 per cent shareholding in KP DMCC is not expected to exceed AED 0.90 million (approximately USD 0.25 million). The transaction has been executed at arm’s length, and the promoter or promoter group of KPIL does not have any financial interest in this acquisition.

The restructuring does not impact KPIL’s overall shareholding in KP DMCC. The only change is the shift from an indirect step-down wholly owned subsidiary to a direct wholly owned subsidiary, ensuring a streamlined corporate structure.

About Company

Kalpataru Power Transmission Ltd is a global EPC player with diversified interest in power transmission and distribution, oil and gas pipeline, railways and biomass-based power generation.

In the Quarterly Results of December 2024, the company reported revenue of Rs 5,732.48 crore, reflecting a growth of 17.08 per cent year-on-year and 16.28 per cent quarter-on-quarter. The net profit stood at Rs 141.96 crore, increasing by 0.68 per cent year-on-year and 13.12 per cent quarter-on-quarter. The net profit margin for the quarter was 2.48 per cent, compared to 2.55 per cent in September 2024 and 2.88 per cent in December 2023.

With a market capitalisation of Rs 187 crore and a PE ratio of 30.4x, the company trades at a discount compared to the industry PE of 36x. The company has ROCE of 16 per cent and ROE of 10.4 per cent. In the last 3 years, the stock price has given 144 per cent returns to its shareholders. The company has been maintaining a healthy dividend payout of 23.1 per cent.

Investors should keep an eye on this Mid-Cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.