KPI Green Energy Limited — Q1 FY26 earnings call

Call held 6 Aug 2025

Management summary

KPI Green Energy reported a robust Q1 FY26, achieving its fifth consecutive quarter of record revenue, driven by strong execution in both IPP and CPP segments. The company demonstrated significant growth across all key financial metrics, including a 75% YoY increase in revenue and a 68% YoY rise in PAT. Management expressed confidence in meeting its annual guidance of 60-70% topline growth and maintaining PAT margins, supported by a substantial order book and strategic projects in the pipeline, including a planned IPO for its subsidiary Sun Drops Energia Private Limited.

Highlights

  • Revenue of ₹614 crores, up 75% YoY, marking the fifth consecutive quarter of highest-ever revenue.

  • EBITDA rose to ₹217 crores, a 64% increase YoY.

  • Profit after tax grew by 68% YoY to ₹111 crores.

  • Basic EPS grew by 44% to ₹5.28 from ₹3.66 YoY.

  • Cash profit generated ₹163 crores, a strong 92% year-on-year growth.

  • Total cumulative portfolio stands at 4 GW, with orders in hand exceeding 3 GW.

  • Management confident of achieving 60-70% topline growth guidance for the year.

Concerns

  • Slight curtailment in Q2 execution expected due to rainy season, though management expects to cover it up.

  • Pledged shares release from SBI is still pending board approval, with no firm timeline provided.

Key financials

  1. Revenue ₹614 Cr +75%YoY
  2. EBITDA ₹217 Cr +64%YoY
  3. PBT ₹149 Cr +64%YoY
  4. PAT ₹111 Cr +68%YoY
  5. Basic EPS ₹5.28 +44%YoY
  6. Cash Profit ₹163 Cr +92%YoY

What they filed

Q1 FY27: revenue up 30.1%, net profit down 6.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue310 483 488 386 501 +62%511 +6%592 +21%502 +30%
EBITDA82 122 135 148 187 +128%197 +61%246 +82%201 +36%
Net profit37 77 86 72 95 +157%99 +29%127 +48%67 −7%
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

₹4,000 Cr

as of 2025-06-30 quantified

Execution

CPP order book of 1.8 GW is expected to contribute to FY26-FY27 revenue.

Composition

Mix 2 segments
  • IPP Projects (under execution) ₹5,000 Cr 55.6%
  • CPP Order Book ₹4,000 Cr 44.4%

Share of order book by segment, derived from disclosed amounts

Pipeline

deal pipeline tcv

BESS tender pipeline of ₹3,000-₹4,000 crores and solar/hybrid pipeline of ₹4,000-₹5,000 crores.

The company has a robust order book and pipeline across IPP and CPP segments, with significant visibility for future revenue.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Debt disclosed Cost 8.8%
    • New borrowing New NCD issuance planned. ₹700 Cr
    My present debt level in this quarter if you calculate, it will be 0.5:1. That is I am very low leverage you can say. With the NCD and upcoming project also, we will not cross 2:1.

Guidance & targets

Revenue

  • Topline Growth Revenue · FY26 · High confidence 60-70%
    So, we are pretty much on the line, and we are quite confident that we will be able to touch the guidance which was given by our Chairman & Managing Director, Dr. Faruk sir. So, we will be able to achieve that most part.

    — Salim Yahoo

Profitability

  • PAT Margins Profitability · Long-term · High confidence 15-20%
    So, accordingly, I don't see too much curtailment into the PAT margin, but it will be in the range of 15% to 20%. That is what I see. Today, it is around 16%-17%. So, we will be able to maintain that.

    — Salim Yahoo

  • IPP EBITDA Profitability · Long-term · High confidence 75-80%
    my EBITDA for IPP would be around 75% to 80%.

    — Salim Yahoo

  • CPP EBITDA Profitability · Long-term · High confidence 20%
    And my EBITTDA of CPP around 20%.

    — Salim Yahoo

  • Blended EBITDA Profitability · Long-term · High confidence 30-32%
    So, blended EBITDA will be around 30% to 32%.

    — Salim Yahoo

Capacity

  • Installed IPP Capacity Capacity · FY26 end · High confidence 1.7 GW
    So, all have in place is around IPP. If you see, 171 plus 240 plus 50 and that is with DC capacity, 503 megawatt that is existing capacity that we have plus 1.2, so it will be 1.7 gigawatt kind of a capacity that will be there.

    — Salim Yahoo

Revenue Mix

  • IPP Share of Revenue Revenue Mix · Long-term · Medium confidence 25%

    From 12-13% today

    See, at present if you see my IPP-CPP revenue mix is around 12% to 13% last year it was against IPP and against which CPP was 86% to 87%. Going forward we have an ambitious target of 10 gigawatts in which we plan to have at least 25% of revenue coming from IPP business and remaining 75% from the CPP business.

    — Salim Yahoo

  • IPP Share of Revenue Revenue Mix · FY26 end · Medium confidence 17-18%

    From 10% today

    Sir, our target is around 25% should be the IPP share, but going forward I think by end of this year, we might move up to 17%-18% kind of.

    — Salim Yahoo

Debt

  • Debt to Equity Ratio Debt · Long-term · High confidence below 2:1

    From 0.5:1 today

    With the NCD and upcoming project also, we will not cross 2:1.

    — Salim Yahoo

Project Completion

  • 250 MW solar, 370 MW hybrid project Project Completion · September 2026 · High confidence Completion
    We are targeting completion of the 250 MW pure solar, 370 MW hybrid project by September '26 in a phased manner.

    — Salim Yahoo

BESS

  • Tender Pipeline Value BESS · Upcoming · High confidence ₹3,000-₹4,000 crores
    I can tell you the tender pipeline that we have already decided to bid for, is around Rs. 3,000 crores to Rs. 4,000 crores of tenders.

    — Salim Yahoo

  • Success Ratio in Tenders BESS · Upcoming · High confidence 80-90%
    So, we are expected to because our success ratio is around 80% to 90% in case when wherever we have bids.

    — Salim Yahoo

Cost of Debt

  • New Green Bonds Rate Cost of Debt · Upcoming · Medium confidence around 8.8%
    If you ask any CFO, my ballpark will be 0%. I would like to get it at a 0% but most probably looking at the current market I somewhere around 8.8% or something we would like to close it.

    — Salim Yahoo

What to watch in Q2 FY26

SBI approval for pledged shares release

Next quarter
Current Request sent, verbal green signal, pending board approval
Target Approval and formal release of pledged shares

Why it matters

Resolution of pledged shares is a key investor concern and a signal of financial health.

Sir, SBI, see, I cannot control the board meeting of SBI. So, I can assure you what we see that by next quarter, I think we will have constructive at least approvals and sanctions from SBI.

Risks & concerns

  • Execution hurdles (land and evacuation)

    medium

    Management identifies land and evacuation as major hurdles but asserts they have sufficient approvals and land bank.

    Both acknowledged

  • Debt leverage

    medium

    Management aims to keep debt-to-equity ratio below 2:1 to avoid risky positions, despite current low leverage.

    Management acknowledged

  • Impact of ISTS charge waiver

    low

    Management states the company is insulated as it does not participate in ISTS projects.

    Analyst downplayed

  • Rainy season impact on Q2 execution

    low

    Management expects slight curtailment in Q2 due to seasonality but plans to cover it up later.

    Analyst acknowledged

  • Transmission line delays/infrastructure constraints

    low

    Management states the company has 3.2 GW evacuation capacity and government is investing heavily in transmission infrastructure.

    Analyst downplayed

Q&A highlights

7 direct
Release of pledged shares by SBI Partial
Later on, the pledge and every the formalities and everything might take time, but we are gung-ho that the SBI board will approve it this time.

Analysts are tracking the release of pledged shares, and management indicates progress but no firm timeline for board approval.

Asked by Manav, an Investor

Impact of ISTS charge waiver on order inflows Direct
As far as the KPI is concerned, we are not even today participating in any kind of ISTS project. So, we are insulated for that.

Management clarifies that the company is insulated from changes in ISTS charges, addressing a potential sector-wide concern.

Asked by CA Garvit Goyal, Nvest Analytics Advisory LLP

Confidence in outperforming FY26 guidance Direct
So, we are pretty much on the line, and we are quite confident that we will be able to touch the guidance which was given by our Chairman & Managing Director, Dr. Faruk sir. So, we will be able to achieve that most part.

Management reiterates strong confidence in achieving its 60-70% topline growth guidance for the year.

Asked by CA Garvit Goyal, Nvest Analytics Advisory LLP

Sustainability of PAT margins with increased IPP execution Direct
So, we expect that as we increase the IPP component in our revenue mix, our PAT margin, we will be able to sustain our PAT margin what we are showing.

Management explains that higher-margin IPP projects will help sustain overall PAT margins despite growth.

Asked by Deekshant B., DB Wealth

Internal risks to execution (land, evacuation) Direct
And in the execution rate, the two main components or the hurdles, I would say, are the availability of the land and the evacuation, that is the transmission. And these two things, if you see, at present, I have three plus gigawatt of evacuation approval with me. I have 6,000 plus acres of land bank available with me.

Management acknowledges key execution risks but highlights existing approvals and land bank as mitigating factors.

Asked by Deekshant B., DB Wealth

Cost escalation for an IPP project Direct
It's not an escalation it's what we say it's not a cost escalation, it's a change in the design and that's why the cost has been as per the design. ... So, it's a design change not a cost escalation.

Management clarifies that a reported cost increase was due to a design change for better PLF, not an escalation, and expects a slight improvement in IRR.

Asked by Ashish Rampuriya, an Investor

Listing plans for subsidiary Sun Drops Energia Private Limited Direct
That is Sun Drop Energia Private Limited and hopefully I mean we will be listing that. We have already started the process of collecting the documents and everything. We will be filing the DRHP for that subsidiary.

Management confirms the intent to list a subsidiary and that the DRHP process has begun, indicating future capital market activity.

Asked by Akhilesh Kumar, an Investor

Transmission line delays and infrastructure constraints Direct
So, for us, that is not an issue because we have already 3.2 gigawatts evacuation with us and the more in Gujarat especially the government of Gujarat, they have already planned for the five years Rs. 1 lakh crores investment in the transmission line and all over India also the government are thinking on this way only and they are making the very heavy infrastructure for the transmission line...

Management, including the Chairman, addresses concerns about grid infrastructure, stating the company has sufficient evacuation capacity and government plans are in place.

Asked by Akhilesh Kumar, an Investor

3 min read 7 chapters

Detailed narrative

Strong Financial Performance in Q1 FY26

KPI Green Energy delivered a robust financial performance in Q1 FY26, marking its fifth consecutive quarter of highest-ever revenue. The company reported a revenue of ₹614 crores, reflecting a significant 75% year-on-year growth. EBITDA increased by 64% to ₹217 crores, while Profit Before Tax (PBT) and Profit After Tax (PAT) also grew by 64% and 68% to ₹149 crores and ₹111 crores, respectively. Basic EPS saw a 44% rise to ₹5.28, and cash profit surged by 92% to ₹163 crores, demonstrating strong operational efficiency and disciplined execution.

Strategic IPP Projects and Revenue Visibility

The company has three major IPP projects under execution, including a 250 MW solar project, a 370 MW hybrid project, and a 150 MW standalone wind project, totaling an execution size of ₹5,000 crores. Completion of the 250 MW solar and 370 MW hybrid projects is targeted by September 2026, with phased commissioning expected to begin within the next few quarters. These projects are backed by 25-year long-term PPAs with GUVNL, ensuring stable annuity income and enhanced long-term earning visibility.

Robust Order Book and Pipeline Across Segments

KPI Green Energy maintains a strong order book and pipeline. The CPP segment has an order book of 1.8 GW, valued at approximately ₹4,000 crores, which is expected to contribute to revenue in FY26-FY27. The company also has a significant tender pipeline for Battery Energy Storage Systems (BESS) estimated at ₹3,000-₹4,000 crores, with an expected success ratio of 80-90%. Additionally, a solar and hybrid pipeline of ₹4,000-₹5,000 crores is under discussion, contributing to a total pipeline of ₹8,000-₹9,000 crores.

Strategic Development and Technological Edge

The company is actively pursuing initiatives to enhance its leadership and technological capabilities in the renewable energy sector. It received a Letter of Intent (LOI) from GUVNL for its 150 MW grid-connected wind project, bolstering its hybrid pipeline. KPI Green Energy also signed three strategic MOUs with Delta Electronics India, focusing on battery energy storage systems, green hydrogen, EV charging infrastructure, and advanced solar PV inverters, aiming to deliver next-generation clean energy solutions.

Subsidiary Strategy and Listing Plans

KPI Green Energy employs a subsidiary strategy to manage different project scales and customer sets, with Sun Drops Energia Private Limited handling projects up to 35 MW and KPIG Energia for projects between 35-100 MW. The company has initiated the process to list Sun Drops Energia Private Limited, with document collection underway for filing the DRHP. Management clarified that this subsidiary listing is not an SPV for a single project but a separate entity for multiple projects, and KPI Green will maintain a majority stake (over 51%) post-listing.

Debt Management and Capital Structure

The company's current debt-to-equity ratio stands at a low 0.5:1. Despite plans for a new ₹700 crores NCD issuance and upcoming projects, management is confident that the debt-to-equity ratio will not exceed 2:1. The company aims to maintain its debt levels responsibly, emphasizing that it will not over-leverage. For the new green bonds, the expected cost of debt is around 8.8%, reflecting a focus on securing competitive financing.

Addressing Execution and Infrastructure Concerns

Management addressed analyst concerns regarding execution hurdles like land acquisition and power evacuation. They highlighted having 3.2 GW of evacuation approval and over 6,000 acres of land bank. Chairman Dr. Faruk Patel emphasized that the government, particularly in Gujarat, has planned significant investments (₹1 lakh crores over five years) in transmission lines, mitigating concerns about grid infrastructure constraints for the company's projects.

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