Kalpataru Stock Gain 5% After Company Signs ₹7550 Cr Aramco Contract

Shares of Kalpataru Projects International gained 5% on Tuesday's trading session after the company won a ₹7,550 crore project from Aramco.

What Happened: Kalpataru said the company signed three contracts for the three packages of the third expansion phase of a master gas system network in Saudi Arabia with Aramco. The project has a contract value of 3.4 billion riyal, equivalent to ₹7550 crore. 

The company in March had said it was selected for EPC (Engineering, Procurement and Construction) contracts by ARAMCO for the project.

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Brokerage Views: Brokerages are bullish on the scrip after the company announced its results on May 5. Motilal Oswal maintained their "buy" call with a target price of ₹1360.

According to the brokerage, the company will continue to benefit from improved domestic transmission and distribution (T&D) pipeline. Huge impetus on T&D capex in India, Europe, Africa, Latin America and the Commonwealth of Independent States (CIS) region has resulted in huge order inflows for the company. India T&D order inflow of the company grew 47% year on year to ₹4340 crore. 

HDFC Securities maintained their "buy" call and increased its target price to ₹1,426 due to strong order booking, improving growth outlook, strong balance sheet and net working capital (NWC) days.

In FY24, the company received ₹30,020 crore worth order in FY24 and has an order book of ₹58,400 crore. The company's net working capital (NWC) cycle reached 99 days in March 2024 and the company has guided a NWC of below 100 for end of FY25. 

Price Action: Shares of Kalpataru Projects International were trading 5% higher at ₹1,260 on Tuesday in the afternoon session. 

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