KP Green Engg. — Q4 FY25 earnings call

Call held 20 May 2025

Management summary

KP Green Engineering Limited reported a robust FY25, with significant growth across all key financial metrics, driven by strong order execution and capacity expansion. Revenue nearly doubled to ₹702 crores, and PAT grew 109% to ₹73.5 crores, supported by margin expansion. The company is aggressively expanding capacity to 4,00,500 metric tons by FY26 and strategically diversifying into new product lines and sectors like green hydrogen and defense, while also improving operational efficiencies.

Highlights

  • Total income rose to ₹702 crores in FY25, a 99% year-on-year increase.

  • EBITDA more than doubled to ₹115 crores in FY25, with margin improving by 110 basis points to 16.4%.

  • Profit after tax grew 109% to ₹73.5 crores in FY25.

  • EPS increased to ₹14.7 per share in FY25 from ₹9.6 in FY24.

  • Cash conversion cycle improved significantly to 86 days from 139 days.

Key financials

  1. Revenue ₹702 Cr +99%YoY
  2. EBITDA ₹115 Cr +113%YoY
  3. EBITDA Margin 16.4%
  4. PAT ₹73.5 Cr +109%YoY
  5. EPS ₹14.7 +53.1%YoY
  6. Receivable Days 142 days
  7. Cash Conversion Cycle 86 days

What they filed

Q4 FY26: revenue up 191.4%, net profit up 220.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY23Q2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue53 104 245 262 432 +715%532 +412%714 +191%
EBITDA9 18 33 40 68 +656%98 +444%147 +345%
Net profit5 11 24 27 46 +820%58 +427%77 +221%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹800 Cr

as of 2025-05-20 quantified

Execution

execute the order within 30-90 days. Majority of these orders will get covered by September.

Composition

Mix 5 products
  • Renewable Sector 55%
  • Infrastructure (PEB, Heavy Engineering) 35%
  • Solar MMS Structure 30%
  • Pooling Substation 20%
  • Transmission Towers 20%

Share of order book by product· categories overlap, and sum to 160%

Pipeline

deal pipeline tcv

Internal plus external order pipeline

Order book is strong, with significant internal and external pipeline, executable within 30-90 days for current orders.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed entirely from IPO proceeds
    • Commissioning Matar plant and augmenting capacity at Kural unit ₹185 Cr
    Capital expenditure for the year amounted to Rs. 185 crore, primarily directed toward commissioning our Matar plant and augmenting capacity at Kural unit. Given the rapid scale up, we pragmatically tapped into both internal accruals and external financing, ensuring that our cost of capital remained in line with our target of maintaining a healthy interest coverage ratio. ... the entire CAPEX is done from the IPO proceeds. So there is no interest cost or anything that is going into this particular unit. So once we complete this then only we go for another CAPEX or anything.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 60%-70%
    I just now said that the committed numbers is 60%-70% growth by our CMD, Dr. Faruk Patel. So we will be trying to achieve that growth rate of 60%-70%.

    — Salim Yahoo

Profitability

  • PAT Margin Profitability · Ongoing · High confidence 9%-10%
    Hardik, as I already said that we are having a very strong margin compared to other players in the industry. We will be looking to maintain those margins at a level of, PAT at a range of 9%-10%.

    — Salim Yahoo

Capacity

  • Total Capacity Capacity · FY26 · High confidence 4,00,500 metric tons per annum
    Also, our Asia's largest galvanizing plant, which is capacity 90,000 metric tons per annum is under construction and expected to be operational in this financial year. So in this financial year, our total capacity is 4,00,500 metric tons per annum.

    — Muinulhaque Kadva

  • New Capacity Initial Utilization Capacity · Immediately · High confidence at least 50%
    Again, you will see that the capacity will get increased with the added capacity. So again, we will start with at least 50% utilization immediately.

    — Salim Yahoo

  • Full Capacity Utilization Capacity · 4-5 years · Medium confidence 80%-90%
    If you say full utilization, at least 4-5 years, you will see the kind of 80%-90% utilization depending upon how the businesses grow, how the businesses that we are growing.

    — Salim Yahoo

Order Mix

  • Group Companies Share of Orders Order Mix · Ongoing · High confidence 35%-40%
    At present, company targets 35%-40% is from the group companies and rest all from outside.

    — Salim Yahoo

New Market Entry

  • Defense Sector Entry New Market Entry · End FY26 or next Financial Year · Medium confidence Entry
    Yes, each product requires for the type is in defense that because the R&D team is working on that and yes, we will get in end of these financial year or next Financial Year we are entering that.

    — Muinulhaque Kadva

Other

  • Green Hydrogen Project Disclosures Other · September or October · Medium confidence Disclosures
    So that 1 MW probably, I think will be coming to the disclosures when these things are coming, maybe by September or maybe by October, it will be happening by that.

    — Alok Das

What to watch in Q1 FY26

Green Hydrogen Project Update

September or October
Current 1MW model for internal use, solar/wind interface
Target Public disclosures on project details

Why it matters

Signals progress on a new strategic initiative in a high-growth sector, indicating future diversification.

So that 1 MW probably, I think will be coming to the disclosures when these things are coming, maybe by September or maybe by October, it will be happening by that.

Q&A highlights

8 direct
Volume vs. Value Metrics for Customized Products Direct
basically we work into multiple products and these are customized products. So if you look at the volume, metrics and volume, because every product will have a different way. It is not a standardized product that we sell in the market. So it is a customized product. So volume will not be the right comparison with the numbers that we give.

Clarifies the company's business model, explaining why traditional volume metrics are less relevant and emphasizing value/margin due to customization.

Asked by Agastya Dave

Profitability and Margin Superiority Direct
if you look at the peers, you will find that our margins are far better than the peers. And the reason for that is not that we are not, we are doing customized product delivery. So that requires a lot of designing that requires a lot of customization. That is the reason.

Explains the source of the company's higher margins compared to peers, linking it to their customized product strategy and design capabilities.

Asked by Agastya Dave

Royalty Payment Justification Direct
Faruk sir is a shareholder in all the other companies also and he is giving majority of the orders to KPGEL and other companies also. And you can see that the entire KP Group has been created and is being run by Dr. Faruk Patel through his, if you look at his journey, he has come from scratch and has built his entire empire. So I think in fact 2% is something which is really desirable because he is presenting and lot of orders and everything that he promotes to get those orders in KP Green Engineering also.

Addresses a potential corporate governance concern regarding related-party payments, providing management's rationale for the 2% royalty based on the CMD's contribution to business and group creation.

Asked by Yogesh Zambare

Backward Integration Strategy Direct
we are doing in backward integration for the existing product and also the backward integration for the new sector like that the green hydrogen and offshore wind. So first of our all product, the backward integration like that we are planning for rolling mill, tube mill and another slitter line, CTL line for the consistently good money and timely delivery and the quality backup.

Provides insight into strategic moves to enhance margins, quality, and delivery for both current and future product lines, including new areas like green hydrogen.

Asked by Suraj Sali

Green Hydrogen Initiative Details Direct
This is an initiative first to demonstrate our entry into the Green Hydrogen. What we are creating a model for 1 MW to start with and whatever that Green Hydrogen will be utilizing to our internal process... So that 1 MW probably, I think will be coming to the disclosures when these things are coming, maybe by September or maybe by October.

Details a new strategic initiative in a high-growth sector, indicating future diversification and sustainability focus with a specific timeline for disclosures.

Asked by Priyanshi Kankane

Galvanizing Plant Usage Strategy Direct
I would rather try to hit the competitors by utilizing my strength as my part of my product, right. So until and unless there is a dire need, I will not go into giving my facility to outsider.

Clarifies the strategic intent behind the significant investment in the galvanizing plant, emphasizing competitive advantage and internal control over quality rather than external service provision.

Asked by Hardik Gandhi

Revenue Growth vs. Capacity Expansion Discrepancy Direct
There is no execution problem. But we take orders once we have the capacity energized, after that it stabilizes and then the order book we take and then execution time period is also there. So keeping all this in mind, we have given a conservative number that what we have, like last time also we have given 60%-70% growth and we have grown 100%.

Addresses a potential concern about underutilization or execution issues, providing management's rationale for conservative guidance despite significant capacity additions.

Asked by Dhruv

Defense Sector Entry and R&D Direct
Sir, some shelter product and all product, we are doing the type test and in parallel we are applying for that for the vendor approval and application for the particular product. So it takes time, but very soon we are starting for that particular. We are coming in steel shelter in the defense sector.

Highlights a new high-potential market entry, indicating diversification and leveraging engineering capabilities for specialized products with ongoing R&D and approval processes.

Asked by K Rajesh

3 min read 6 chapters

Detailed narrative

Robust Financial Performance in FY25

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.

Significant Capacity Expansion and Modernization

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.

Strong Order Book and Diversified Product Mix

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.

Strategic Backward Integration and New Market Entry

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.

Operational Efficiency and Working Capital Improvement

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.

Future Outlook and Growth Initiatives

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.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Capital Goods earnings calls