K.P. Energy Limited — Q3 FY25 earnings call

Call held 13 Feb 2025

Management summary

K.P. Energy delivered a strong performance in Q3 FY25 and the first nine months of FY25, achieving record revenues and profitability driven by robust execution in its wind EPC segment. The company's order book remains healthy at 2 GW, with significant pipeline visibility. Management expressed confidence in continued growth, leveraging India's ambitious renewable energy targets and its expertise in Balance of Plant solutions.

Highlights

  • Q3 FY25 Consolidated Revenue reached INR 212.6 crores, marking a 155% year-over-year increase.

  • Nine-month FY25 Consolidated Revenue stood at INR 549.8 crores, up 105% YoY, exceeding last year's full annual revenue.

  • Q3 FY25 Consolidated EBITDA was INR 44.1 crores, a 141% YoY increase and the highest quarterly EBITDA ever.

  • Nine-month FY25 Consolidated EBITDA grew 108% YoY to INR 118.2 crores.

  • Q3 FY25 Profit After Tax (PAT) was INR 26.4 crores, surpassing previous quarterly records.

  • Nine-month FY25 PAT more than doubled to INR 69.5 crores, compared to INR 32.7 crores in the prior year.

  • Basic EPS for nine months FY25 was INR 10.4, up from INR 4.9 in the previous year.

  • The company's order book stands at 2 gigawatts, with INR 3,150 crores remaining to be executed.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹212.6 Cr
    YoY +155%
  • Consolidated EBITDA
    ₹44.1 Cr
    YoY +141%
  • Consolidated PBT
    ₹34 Cr
    YoY +167%
  • Consolidated PAT
    ₹26.4 Cr
    YoY +183.9%

9M

  • Consolidated Revenue
    ₹549.8 Cr
    YoY +105%
  • Consolidated EBITDA
    ₹118.2 Cr
    YoY +108%
  • Consolidated PAT
    ₹69.5 Cr
    YoY +112.5%
  • Basic EPS
    ₹10.4
    YoY +112.2%

What they filed

Q1 FY27: revenue up 135.9%, net profit up 4.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue199 212 401 220 301 +51%345 +63%632 +58%519 +136%
EBITDA40 43 70 48 66 +65%75 +74%131 +87%60 +25%
Net profit25 26 46 25 36 +44%41 +58%79 +72%26 +4%
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.

Segment breakdown

  • EPC Segment
    96% Contribution to Revenue
  • IPP Segment
    3% Contribution to Revenue
  • O&M Segment
    1% Contribution to Revenue

Guidance & targets

Capacity

  • Order Book Execution Capacity · next 1.5 years · High confidence 2 gigawatt
    So, the entire order book of 2 gigawatt will be energized in different parts over the period of 1.5 year, in the coming 1.5 year.

    — Shabana Bajari, CFO, KP Energy Limited

Revenue

  • O&M Revenue Revenue · per annum in upcoming year · High confidence INR 6.5-7 crores
    So, while we have an estimated invoicing of about INR4.5 crores in the current financial year, in the upcoming year, we can expect somewhere around INR6.5 crores to INR7 crores per annum.

    — Shabana Bajari, CFO, KP Energy Limited

  • IPP Revenue (new 28.6 MW) Revenue · annual basis · High confidence INR 22-23 crores
    So, on an approximate basis, we expect about INR22 crores-INR23 crores of increase in the top line on IPP segment on an annual basis.

    — Shabana Bajari, CFO, KP Energy Limited

  • O&M Revenue per MW (BoP) Revenue · per annum · High confidence INR 2.2-2.5 lakhs
    In that case, it would be around INR2.2 lakhs to INR2.5 lakhs per megawatt, per annum.

    — Shabana Bajari, CFO, KP Energy Limited

Order Conversion

  • O&M Contract Conversion Rate Order Conversion · typically · High confidence 80-90%
    So typically, we always insist that we should be given the O&M contract as well. So, in about 80% to 90% cases, we do get the O&M as well.

    — Shabana Bajari, CFO, KP Energy Limited

  • Public Sector Bid Conversion Time Order Conversion · typically · Medium confidence 6-9 months
    So, public sectors do take time. It can be beyond, you know, six to nine months.

    — Shabana Bajari, CFO, KP Energy Limited

Order Inflow

  • Order Inflow from Bid Pipeline Order Inflow · next 3-6 months · High confidence 3-6 months
    So, as I told that the discussion period on the technical side is what takes a little longer. So, in three to six months, we can expect the order inflow from these pipelines.

    — Shabana Bajari, CFO, KP Energy Limited

Project Completion

  • KPI Green Project Completion Project Completion · September '26 · High confidence September '26
    We're having different completion dates and the timelines available with us are somewhere around September '26.

    — Shabana Bajari, CFO, KP Energy Limited

  • NTPC Project Amendment Timeline Project Completion · next 6 months · Medium confidence around six months
    So, while we await an amendment in terms of official amendment from them, but based on the communication available with us, it is expected to be around six months.

    — Shabana Bajari, CFO, KP Energy Limited

Profitability

  • O&M EBITDA Margin Profitability · overall · High confidence 65-70%
    So, what happens is that while we give certain free period, but then overall, my EBITDA comes at around 65%. 65% to 70% is what the EBITDA I can expect from the O&M segment.

    — Shabana Bajari, CFO, KP Energy Limited

Debt

  • IPP Cost of Debt Debt · current · High confidence 9.5%
    The cost of debt is about 9.5%.

    — Shabana Bajari, CFO, KP Energy Limited

Tariff

  • IPP PPA Rate (GUVNL) Tariff · 25 years · High confidence INR 2.43 per unit
    So, it is at a fixed rate for 25 years. ... 2.43 would be the power price, which has been there. It will remain valid for 25 years.

    — Shabana Bajari, CFO, KP Energy Limited

  • IPP Average Realization Tariff · overall · High confidence above INR 3.5
    It will be above INR3.5. It will not go as low as INR3.5.

    — Shabana Bajari, CFO, KP Energy Limited

Risks & concerns

  • Grid infrastructure constraints (nationwide)

    medium

    Analyst raised concerns about nationwide grid availability; management stated KPE's project connectivity is finalized, mitigating direct impact.

    Analyst acknowledged

  • Project delays (NTPC CPP project)

    medium

    Management confirmed delays on the NTPC project due to client-side issues (turbine data, approvals), with an amendment expected in ~6 months.

    Analyst acknowledged

  • Transformer procurement delays

    low

    Analyst asked about difficulties in procuring transformers; management stated they pre-book transformers for projects where PSS is in their scope.

    Analyst acknowledged

  • Future PPA rate compression due to competition

    low

    Analyst questioned if increased competition could lower PPA rates; management clarified government PPAs are fixed for 25 years, and private PPAs are linked to DISCOM pricing which historically doesn't fall.

    Analyst downplayed

Areas of evasion (2)

  • Specific details of Aditya Birla projects (due to client agreements)
  • Detailed discussion on green hydrogen initiatives (deemed not the proper forum)

Q&A highlights

3 direct
IPP strategy and revenue mix for KP Energy vs. KPI Green Direct
the EPC segment contributes about 96%, the IPP segment contributes about 3%, and the O&M segment contributes about 1%. So, the modus operandi between KPI and KPE is slightly different. We predominantly are into the wind EPC segment.

Clarifies KP Energy's core business focus on EPC, distinguishing it from the group's broader IPP ambitions, and provides segment revenue contribution.

Asked by Agastya Dave

Competition in EPC bidding and bid conversion process/timelines Direct
the demand is amazingly higher than the people who are capable and ready to pick up the job. So, I do not see anywhere a threat where I would be competing with anybody when it comes to the bidding. ... the order size is so high that they split the order between multiple bidders based on the final negotiated price.

Provides insight into the competitive landscape for large EPC projects, suggesting high demand and less intense price competition, and clarifies the bid-to-order conversion process for large tenders.

Asked by Manan Shah

Status and revised timelines for the large NTPC CPP project Direct
there are certain, what do you call, timelines, which have been extended by NTPC because their turbines were not frozen, and they were not in a position to provide us timely data. ... it is expected to be around six months.

Reveals a significant project is facing delays due to client-side issues, impacting KPE's execution timeline, and provides an updated expectation for resolution of the amendment.

Asked by Akhilesh Kumar

3 min read 6 chapters

Detailed narrative

Exceptional Financial Performance in Q3 and 9M FY25

K.P. Energy reported a robust financial performance for Q3 FY25, with consolidated revenue reaching INR 212.6 crores, a significant 155% increase year-over-year. This quarter marked the highest ever Q3 revenue for the company. For the nine months ended December 31, 2024, consolidated revenue stood at INR 549.8 crores, up 105% YoY, already surpassing the entire annual revenue of the previous fiscal year. Profitability also saw substantial growth, with Q3 FY25 EBITDA at INR 44.1 crores (up 141% YoY) and PAT at INR 26.4 crores, setting new quarterly records.

Strong Order Book and Execution Visibility

The company maintains a healthy order book of approximately 2 gigawatts, with INR 3,150 crores remaining to be executed. Management indicated that the entire 2 GW order book is expected to be energized over the next 1.5 years. K.P. Energy also has a bid pipeline of 3 gigawatts, with expectations for order inflow from these pipelines within the next three to six months for private clients and six to nine months for public sector entities. The EPC segment currently contributes about 96% of the company's revenue.

Expanding IPP and O&M Portfolios

K.P. Energy's consolidated IPP portfolio stands at 45.7 megawatts, with an additional 2.8 megawatts expected to be commissioned shortly, bringing the total to 48.5 megawatts. The newly commissioned 28.6 MW IPP project (GUVNL tender) is projected to generate an incremental INR 22-23 crores in annual revenue, with a fixed PPA rate of INR 2.43 per unit for 25 years. The O&M portfolio covers over 520 megawatts, with an expected annual revenue of INR 6.5-7 crores in the upcoming year and an EBITDA margin of 65-70% for the BoP portion.

Competitive Landscape and Strategic Positioning

Management highlighted that demand in the wind EPC sector significantly outstrips the supply of capable players, leading to less intense competition for large orders. The company's expertise spans land acquisition, infrastructure development, power evacuation, and comprehensive project execution, making it a preferred partner for IPPs. K.P. Energy's strategy involves taking on larger contracts, often seeing orders split among multiple bidders rather than a strict L1 concept, especially for large tenders like those from NTPC and INGEL.

Updates on Key Projects and Challenges

The large NTPC CPP project (464 MW, split into two orders) is currently under execution, with land acquisition completed. However, timelines have been extended by NTPC due to delays in freezing turbine specifications and providing timely data. An amendment to the project timeline is expected within approximately six months. Management also clarified that while grid infrastructure is a nationwide concern, K.P. Energy's project connectivities are pre-finalized, mitigating direct impact on their projects.

Future Growth and New Energy Initiatives

Dr. Alok Das, Group CEO, emphasized India's ambitious target of 500 gigawatts of non-fossil fuel capacity by 2030, positioning K.P. Energy for a 'very green future.' The company is exploring offshore wind initiatives, which are in early stages of pre-feasibility studies and infrastructure development, with materialization expected in three to five years. Green hydrogen initiatives are also in a nascent stage, with K.P. Energy and KPI Green aiming to create synergy as green power is a core component.

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