KP Green Engg.

KP Green Engineering Limited reported a strong FY25, with total income rising to ₹702 crores, a 99% year-on-year increase from ₹352 crores in FY24. This growth was driven by strong order execution and healthy demand in renewable energy and infrastructure segments. EBITDA more than doubled to ₹115 crores (from ₹54 crores in FY24), with the EBITDA margin improving by 110 basis points to 16.4%, reflecting benefits from scaled-up manufacturing and a shift towards higher-value products. Profit after tax also grew significantly by 109% to ₹73.5 crores, resulting in an EPS of ₹14.7 per share.

The company's total operational facility now stands at 1,42,500 metric tons per annum, with an additional 1,68,000 metric tons currently under trial production and set to go live in FY26. A major highlight is the ongoing construction of Asia's largest galvanizing plant, with a capacity of 90,000 metric tons per annum, expected to be operational in FY26, bringing the total capacity to 4,00,500 metric tons per annum. Capital expenditure for FY25 amounted to ₹185 crores, primarily for commissioning the Matar plant and augmenting the Kural unit, funded entirely through IPO proceeds without incurring interest costs.

KP Green Engineering holds an order book of over ₹800 crores, with the combined internal and external pipeline expected to exceed ₹2000 crores. The company aims for 35-40% of its orders from group companies and the remaining 60-65% from external clients. The product mix is diversified, with 50-60% from the renewable sector and 30-40% from infrastructure, including solar module mounting structures (30%), pooling substations (20%), and transmission towers (20%). The company emphasizes its customized product approach, which contributes to better margins compared to peers.

The company is actively pursuing backward integration for both existing and new product lines. For existing products, plans include rolling mills, tube mills, and slitter lines to ensure consistent quality and timely delivery. For new sectors like green hydrogen and offshore wind, backward integration involves green hydrogen storage, electrolyzers, and wind tubular towers. KP Green Engineering is also expanding into the defense sector, with its R&D team working on shelter products and other specialized items, with entry expected by the end of FY26 or next FY after necessary approvals.

The company has demonstrated improved operational efficiency, reflected in its cash conversion cycle, which improved significantly to 86 days in FY25 from 139 days in FY24. While receivable days slightly increased to 142 days from 135 days, the overall working capital management has seen positive traction despite a substantial 99% increase in topline. Management aims to maintain PAT margins in the 9-10% range, leveraging enhanced scale and automation.

KP Green Engineering projects a revenue growth rate of 60-70% for FY26, driven by its expanded capacity and robust order book. The company plans to start new capacity utilization at a minimum of 50% immediately, with full utilization of 80-90% expected within 4-5 years. Strategic initiatives include a 1MW green hydrogen project for internal use, with disclosures anticipated by September/October 2025, and expansion into new product lines like Pre-Engineered Buildings (PEB) and heavy engineering for railways and highways, with significant PEB orders expected to convert soon.