Kalpataru Power aims Rs 700-800 crore cash flows each year; expects steel, aluminium prices to stabilize

Kalpataru Power Transmission expects to generate Rs 700-800 crore of free cash flows every year, Manish Mohnot, managing director, told CNBC-TV18.

The company announced that its subsidiary JMC Projects will be merged with it to benefit from synergies, to create a stronger balance sheet and also to enable the combined entity to bid for larger projects. With this merger, the merged entity will have a combined orderbook of almost Rs 37,000 crore and an international footprint in 67 countries.

In an interview to CNBC-TV18, Mohnot said, “From a margin perspective, we have had some impact coming on volatility in the last few years, but it looks like things should stabilize on steel, aluminium and copper.

“Therefore, we continue to target 5.5-6 percent at PBT level as compared to the current level of close to 5 percent given that our debt is so low; on a consolidated basis our debt is only at Rs 2,000 crore, it has come down close to Rs 1,500 crore in the last 2 years and with this margin, we should be easily generating Rs 700-800 crore free cash flow every year at least for the next 2-3 years given the current visibility of orderbook,” said Mohnot.

Talking about orderbook, he said, “A significant portion of the orderbook will start generating revenue in next year itself. Therefore, we have projected USD 3 billion revenue in the next 3 years which means we should be doing 15 percent growth at a consolidated level for next year.”

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