Multibagger Stock: Kalpataru Projects rallied 76% in 2024 so far, gained 250% in less than 2 years; what lies ahead?

Despite market fluctuations, shares of Kalpataru Projects International have maintained a consistent upward trend for the past 22 months, consistently reaching new record highs. The company's shares, which were trading at ₹356.70 apiece in June 2022, are now trading at ₹1,249.70 apiece, which is an increase of 250%. 

Throughout this period, the stock experienced only four negative finishes, with the remaining months showing positive performance. Looking at the stock's annual performance, it has surged by 76% in the current year so far, surpassing the entire return of 27% achieved in 2023. This also marks the highest yearly gain for the stock since 2017.

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Starting from its low point of ₹169.50 per share in 2020, the stock has risen by an impressive 637% to date. On April 30, it touched a new all-time high of ₹1,298 per share. This remarkable rally is attributed to the company's growing order book, improved financial performance, and expansion into new market segments.

Kalpataru Projects is in a sweet spot amid the government’s increased focus on infrastructure. Initiatives like Global Energy Transition, Energy Security, One Nation, One Gas Grid, the Jal Jeevan Mission (tap water supply), and increasing urbanisation auger well for the company. 

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To achieve the goal of making India a $5 trillion economy by FY2025 and sustaining growth until 2030, it's estimated that the government will need to invest $4.5 trillion in infrastructure by 2030.

As a result, the total capital expenditure in India's infrastructure sectors from FY2020 to FY2025 is expected to be around ₹111 lakh crore. During this period, sectors like energy (24%), roads (18%), urban development (17%), and railways (12%) are projected to account for approximately 71% of total infrastructure investments in India. 

This significant investment in the infrastructure sector is anticipated to create ample growth opportunities for companies operating in this space, said domestic brokerage firm Sharekhan in its recent note. 

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Strong order book 

In terms of orders, the company secured several contracts in March, including one valued at ₹2,071 crore, awarded on March 28. These contracts are for the transmission and distribution projects in international markets, as well as a contract for designing and constructing an underground metro rail project in India. 

The company also won contracts totaling ₹2,445 crore in mid-March. At the end of December 2023, the company's order book stood at ₹51,753 crore, of which T&D comprises 37%, or ₹19,367 crore. 

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Increased power demand, upgradation of T&D infrastructure, and greater adoption of renewable energy led to a growth spurt in the T&D business segment. Meanwhile, in the B&F segment, promising opportunities are emerging from projects like data centers, airports, and industrial plants, offering robust prospects for expansion.

Kalpataru Projects International is one of India’s largest listed, diversified engineering and construction companies engaged in power transmission & distribution (T&D), buildings and factories (B&F), water supply and irrigation, railways, oil & gas pipelines, urban mobility (flyovers & metro rail), highways, and airports.

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It is currently executing projects in over 30 countries and has a global footprint in 70 countries, its website showed. 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.