KP Green Engg. — Q4 FY26 earnings call

Call held 13 May 2026

Management summary

KP Green Engineering reported a transformational FY26 with robust financial growth, driven by strong execution and capacity expansion. The company achieved significant revenue and profit growth, supported by a healthy order book and strategic diversification into various engineering verticals. While inventory levels increased due to geopolitical hedging, management expressed confidence in sustained long-term growth and margin maintenance.

Highlights

  • FY26 Revenue of ₹1,250 crores, up 78% YoY.

  • FY26 EBITDA of ₹249 crores, up 117% YoY, with margin at 20% (vs 16% in FY25).

  • FY26 PAT of ₹136 crores, up 85% YoY.

  • Current order book of ₹1,831 crores provides strong revenue visibility for FY27.

  • Successful commissioning of Asia's largest hot-dip galvanizing plant enhances execution speed and quality.

Concerns

  • Inventory days increased sharply from 96 days to 195 days due to a hedging strategy against geopolitical conditions.

  • Cash and cash equivalents declined from ₹162 crores to ₹19 crores due to reclassification to other financial assets.

  • Impact of geopolitical conditions on fuel costs and raw material availability, though managed through hedging and diversification.

Key financials

3 periods

Headline

  • Inventory Days
    195 days
  • Cash Conversion Cycle
    150 days

H2

  • FY26 Total Income
    ₹714 Cr
    YoY +64%
  • FY26 EBITDA
    ₹147 Cr
    YoY +108%
  • FY26 PAT
    ₹77 Cr
    YoY +68%

FY26

  • Revenue
    ₹1,250 Cr
    YoY +78%
  • EBITDA
    ₹249 Cr
    YoY +117%
  • PAT
    ₹136 Cr
    YoY +85%
  • EBITDA Margin
    20%
  • Capacity Utilization
    1,24,500 metric tons

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

₹1,831 Cr

as of 2026-03-31 quantified

Execution

Entire order book to be executed in FY26-27

Composition

Mix 2 client types
  • Group Companies (Internal) 22%
  • External 78%

Share of order book by client type

Pipeline

qualified rfp

Bidding pipeline might go above ₹3000 crores

Order book provides healthy revenue visibility and is diversified across various sectors including telecommunication, power, highways, public infrastructure, and railways.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Backward integration, including rolling mills, to improve margins and material availability
    Sir, frankly speaking, we will be continuing the capex during the year for which the fruits will be visible in the next year. And it takes a little bit gestation time. So this next phase operational activity will happen in FY27. Most of the capex will be a backward integration to further improve our margins and availability of materials will help us for that. So if you see maybe rolling mills or something which will be our prompt kind of a thing, that's major capex that we will be going.
  • Debt Debt disclosed Cost 8.5%
    • New borrowing Short-term debt increased to fund working capital requirements for inventory buildup due to geopolitical conditions.
    My average cost of borrowing will be somewhere into 8.5% to 9%. So, I don't take any high-cost debt. I don't take from any venture capitalists. We have a very good credibility. We have a rating of A category. So, all the banks are very keen to fund us, to fund our working capital.
  • Liquidity Cash ₹19 Cr Cash and cash equivalents declined from ₹162 crores to ₹19 crores due to reclassification of long-term FDs into other financial assets.
    Okay, understood. Now the next question is with regards to cash and cash equivalents. I saw that they have declined significantly from INR162 crores to INR19 crores. Just wanted to understand that where was this cash actually deployed and how can we expect the operating cash flows to improve meaningfully? Because I also saw that the debt increased as well in the current year, you know, the past one. So just wanted to understand the deployment of cash. Yes, See, if you see, you know, there is a classification which has happened on the balance sheet. So, there are other financial assets which have been added on the asset side and all those things. So those are that cash and cash equivalent have been bifurcated into other financial assets and long-term have been put into the financial assets. That's why it has just gone from up to the fixed asset kind of a thing as per the Ind AS calculation.

Guidance & targets

Revenue

  • Revenue Growth Revenue · till 2030 · Medium confidence 40-50%
    FY27, I mean, see, we have the capacity in hand. So, I don't think, you know, but growth trajectory we have already given that, you know, 40 to 50% year-on-year growth in all the KP Group companies we have given it. Our CMD sir has given that vision. So, we are looking towards that. That is the minimum that will be and maximum is no limit. I mean, if we are able to utilize the capacity, we will be able to do your expectation which is way beyond that 40 to 50%.

    — Salim Yahoo

Profitability

  • EBITDA Margin Profitability · FY27 · Medium confidence 16-20%
    See, EBITDA margin is somewhere depend upon a lot of other factors also, you know, material prices. Though we try to hedge them, we try to have the clauses in our, you know, agreement. But this margin will try to maintain this margin. We'll try to maintain in the range of 16 to 20%.

    — Salim Yahoo

Capacity

  • Capacity Utilization Capacity · FY27 · Medium confidence 40-60%
    See, if I look at this order book, we might go to 40%, 55%, 60% this year with the growth.

    — Salim Yahoo

  • Capacity Utilization Capacity · FY27 · Medium confidence 50-60%

    Previously 30-34% → 50-60%

    Yes, see, utilization this time was around 30 odd percent, 30 to 34. Next year, for this financial year, we will have approximately 50% to 60% max. Then next one more year. Post that, in the meantime, we are adding small, small capacities wherever we see some diversification we will also add to the capacity.

    — Salim Yahoo

What to watch in Q1 FY27

Capacity Utilization Rate

FY27
Current 30-34%
Target 40-60%

Why it matters

Improvement in utilization is key to leveraging expanded capacity and driving revenue growth.

Yes, see, utilization this time was around 30 odd percent, 30 to 34. Next year, for this financial year, we will have approximately 50% to 60% max.

Risks & concerns

  • Geopolitical conditions and raw material price volatility

    medium

    Geopolitical conditions impact fuel costs (coal, gas) and raw material availability, leading to increased inventory for hedging. Management is trying to maneuver through these hurdles.

    Management acknowledged

  • Execution challenges due to external factors

    low

    External factors like client-side disruptions or fuel availability can impact manufacturing and order execution, requiring careful management.

    Management acknowledged

Q&A highlights

8 direct
Order book clarification and execution timeline Direct
No, this is total including this INR500 crores orders also 1800 as on date. This entire FY26-27. This year will be executing the entire order book.

Clarifies the total order book figure and confirms the execution timeline for the entire book within the next fiscal year.

Asked by Vaibhav Surya

Future capex plans and purpose Direct
Sir, frankly speaking, we will be continuing the capex during the year for which the fruits will be visible in the next year. And it takes a little bit gestation time. So this next phase operational activity will happen in FY27. Most of the capex will be a backward integration to further improve our margins and availability of materials will help us for that. So if you see maybe rolling mills or something which will be our prompt kind of a thing, that's major capex that we will be going.

Indicates future capex will focus on backward integration like rolling mills to enhance margins and material availability, with benefits visible in FY27.

Asked by Vaibhav Surya

Increase in inventory days and working capital Direct
So, we need to have this in hand because of the geopolitical conditions, we need to stock up, pile up the inventory so that we don't have impact on the margins, we don't have impact on the availability of the raw materials. And that's the reason we have stocked up inventory this time. That's why you have seen the inventory days going a little high.

Explains the significant increase in inventory days as a strategic hedging against geopolitical risks and raw material price volatility, impacting working capital.

Asked by Sparsh Akar

Decline in cash and cash equivalents Direct
Yes, See, if you see, you know, there is a classification which has happened on the balance sheet. So, there are other financial assets which have been added on the asset side and all those things. So those are that cash and cash equivalent have been bifurcated into other financial assets and long-term have been put into the financial assets. That's why it has just gone from up to the fixed asset kind of a thing as per the Ind AS calculation.

Clarifies that the decline in cash and cash equivalents is primarily due to reclassification of long-term fixed deposits to other financial assets, not actual cash deployment.

Asked by Sparsh Akar

Green hydrogen usage in galvanizing plant Direct
See, as per the regulations, we can blend 20 to 25% green hydrogen into the LPG. So, we are following that rules and what happens is that it reduces the cost to a small extent only, but it is a uniqueness that, you know, that gives us, you know, that utilization of green hydrogen. It, you know, to some extent it helps me on the ESG compliances also that I am utilizing green hydrogen.

Highlights the company's use of green hydrogen for its galvanizing plant, providing a competitive edge, ESG compliance, and minor cost reduction.

Asked by Sparsh Akar

Royalty charges to promoter Direct
Yes, I mean, see, if you look at, SEBI has given guidance for 5% of royalty as per SEBI guidelines. But we are only giving 2%. And believe me, there is no, intra-company which is reduced from this royalty portion, top line. So, any intra-company and everything has reduced from this and the top line is only taken which is pure, top line which has been done by the company. That is taken into consideration.

Management defends the 2% royalty charge as being within SEBI guidelines and justified for brand building by the promoter, with no intra-company reduction.

Asked by Darshit Shah

Plans to become a debt-free company Direct
So, I would not at present do anything that is -- if there are plans of getting into that, we'll let you know as and when we decide on. At present, there is no such plan of getting debt-free. We are growing very fast and we need capital so that we can expand ourselves, take more market share in these kinds of products that we are there.

Management states no immediate plans to become debt-free, prioritizing capital for rapid growth and market share expansion, given easy access to debt.

Asked by Sheo

Rationale for large capex despite low utilization Direct
Yes, I understand. If you go a little back, we did capex from what? From our IPO. Okay. It was the biggest IPO in the history of entire BSE SME. Till date, it is also INR190 crores. We did IPO from the point of view that we have to go. I cannot come after two years that, again I will come up with some funds or something, I will come up with an IPO or something. So when we do equity infusion or we do capex through equity fund raising, at that time you have to take a long-term vision.

Management explains that past capex was funded by the IPO with a long-term vision for growth and diversification, rather than short-term utilization rates.

Asked by Sparsh Akar

2 min read 6 chapters

Detailed narrative

Robust Financial Performance in FY26

KP Green Engineering delivered a strong performance in FY26, with total income growing by 78% YoY to ₹1,250 crores. EBITDA saw an even more significant increase of 117% to ₹249 crores, leading to an expansion in EBITDA margin from 16% in FY25 to 20% in FY26. Profit After Tax (PAT) also grew robustly by 85% to ₹136 crores, demonstrating strong operational efficiency and economies of scale.

Strong Order Book and Revenue Visibility

As of March 31, 2026, the company boasts a healthy order book of ₹1,831 crores, providing excellent revenue visibility for FY27. This includes a landmark order of over ₹819 crores from BSNL for telecommunication towers, marking a strategic re-entry into the telecom sector. The bidding pipeline is also robust, with potential orders exceeding ₹3,000 crores, indicating continued growth opportunities.

Strategic Diversification and Capacity Expansion

KP Green Engineering is rapidly transforming into a diversified engineering powerhouse, with product verticals in transmission line towers, solar structures, heavy engineering, and pre-engineering buildings. The company commissioned Asia's largest hot-dip galvanizing plant at Matar with a capacity of 90,000 metric tons per annum, significantly improving execution speed and quality. Future capex plans are focused on backward integration, such as rolling mills, to further enhance margins and material availability.

Competitive Advantage and Innovation

The company's unique selling proposition lies in its product diversification and end-to-end execution capabilities across various segments. A notable achievement includes becoming the first Indian company to successfully complete all three crash tests for road crash barriers in a single attempt. Furthermore, the company is utilizing green hydrogen (20-25% blend) in its galvanizing plant, which provides a competitive edge, minor cost reduction, and aligns with ESG compliance.

Capital Allocation and Working Capital Management

While cash and cash equivalents declined from ₹162 crores to ₹19 crores, this was primarily due to reclassification of long-term fixed deposits to other financial assets, not operational cash deployment. Short-term debt increased to fund working capital requirements, specifically for inventory buildup, as a strategic hedge against geopolitical conditions and raw material price volatility. The average cost of borrowing is maintained at a competitive 8.5-9%, and the long-term debt-to-equity ratio remains low.

Future Growth Outlook and New Product Initiatives

Management targets a minimum 40-50% YoY revenue growth until 2030, with EBITDA margins expected to be maintained in the 16-20% range. Capacity utilization is projected to increase from 30-34% in FY26 to 40-60% in FY27. The company is actively exploring new product verticals, including onshore tubular towers, container manufacturing (for battery cells/data centers), fasteners, and cable and conductor manufacturing, aiming for revenue generation beyond backward integration.

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