KPI Green Energy Q1 FY27 earnings call

KPI Green Energy Limited reported a strong start to FY27 with total income reaching ₹710 crore, marking a 16% year-on-year growth. EBITDA also saw a robust increase of 21% year-on-year to ₹262 crore, with the EBITDA margin improving to 37% from 35% in the corresponding quarter of the previous year. However, Profit After Tax (PAT) for the quarter stood at ₹95 crore, a decline from ₹111 crore in Q1 FY26, primarily attributed to higher depreciation and finance costs associated with the rapidly growing asset base. Despite the PAT decline, cash profit, a better indicator of underlying cash generation, grew 6% year-on-year to ₹176 crore.

As of June 30, 2026, the company's total portfolio reached approximately 6.94 gigawatts, representing a significant 71% year-on-year growth from 4.06 gigawatts. This includes 1.87 gigawatts of installed capacity and 5.07 gigawatts of work-in-progress capacity. The portfolio is diversified with 2.57 gigawatts under the IPP segment and 4.37 gigawatts under the CPP segment. During the last year, KPI Green commissioned 0.85 gigawatts of capacity and secured fresh orders totaling 2.88 gigawatts, contributing to the substantial increase in overall capacity.

Management highlighted that geopolitical conditions are significantly impacting execution and costs. Factors such as fuel, components (cables, steel, MMS structures), logistics, and ROW issues have led to increased costs. While the company aims to maintain its 30-40% year-on-year revenue growth, the geopolitical situation has necessitated a more conservative outlook. The decline in PAT is largely due to the upfront recognition of depreciation and interest on new IPP assets, which are still in their stabilization phase. Full revenue and earning contributions from these assets are expected to materialize progressively, with full benefits anticipated in upcoming quarters and stabilization by FY28.

The company's debt-to-equity ratio is currently at a comfortable level, with a long-term target of 3:1 max. As of March 2026, borrowings stood at approximately ₹5,200 crore. The annual interest cost is around 8.5%. Management noted that the total investment in assets is projected to be upwards of ₹5,000-6,000 crore for FY27-FY28. The interest during construction (IDC) for projects has been utilized, and the full interest cost will now be expensed, which, along with depreciation, impacts current profitability. However, as projects stabilize and generate full revenue, these costs are expected to be sustained.

KPI Green is expanding its international footprint, with a significant presence in Botswana where an MOU has been signed for 5 gigawatts of renewable energy, with the first 500-megawatt phase underway. Land for the Botswana project has already been acquired, and PPAs are in advanced stages. In the UAE, the company is executing a solar power project integrated with a battery energy storage system for a containerized data center. Domestically, initiatives include a 142-megawatt EPC order for floating solar in Kadana Dam, Gujarat, and progress on 150-megawatt and 300-megawatt wind projects.

The company emphasized its commitment to strengthening governance, citing recent appointments of Professor Sunil Maheshwari as Vice Chairman and Mr. Rajesh Shrivastava as Whole-Time Director, along with the welcome of Mr. Kapil Kriplani as the incoming Group CFO. The change of auditors to BDO, a top 5 firm, was also highlighted as a step towards better practices. Management also noted that the promoter group has been increasing its stake, demonstrating confidence in the company's growth trajectory and aiming to reinforce market trust.