KPI Green Energy

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.

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.

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.

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.

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.

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.

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.