KPI Green Energy Limited — Q2 FY26 earnings call

Call held 11 Nov 2025

Management summary

KPI Green Energy delivered a strong Q2 FY26, with significant revenue and PAT growth driven by robust execution and strategic financing initiatives. The company secured substantial debt funding for its IPP projects and expanded its order book, while also venturing into future-ready technologies. Management addressed investor concerns regarding EPS growth, project cancellations, and grid stability, reaffirming its growth trajectory and commitment to transparency.

Highlights

  • Revenue for Q2 FY26 grew by 78% year-on-year to ₹641.1 crores, demonstrating robust top-line expansion.

  • Profit after tax (PAT) for Q2 FY26 increased by 67% year-on-year to ₹117 crores, reflecting strong profitability.

  • Successfully secured a ₹3,200 crores term loan from State Bank of India for 250MW solar and 370MW hybrid projects, bolstering IPP growth.

  • Issued India's first externally credit-enhanced green bond of ₹670 crores, enhancing capital structure and investor confidence.

  • Current group-level portfolio stands at 6 gigawatts, with a clear long-term vision to achieve 10 gigawatts by 2030.

Concerns

  • Analyst raised concerns about EPS growth not aligning with company growth, attributing it to potential equity dilution.

  • Analyst questioned the impact of government directives on RE project cancellations and the readiness of grid infrastructure for rapid solar expansion.

  • Analyst expressed concern over the company's share price underperformance despite strong results, attributing it to market dynamics.

Key financials

2 periods

Headline

  • Revenue
    ₹641.1 Cr
    YoY +78%
  • EBITDA
    ₹232.4 Cr
    YoY +73%
  • PBT
    ₹158 Cr
    YoY +63.4%
  • PAT
    ₹117 Cr
    YoY +67%
  • EPS
    ₹4.82

H1

  • Revenue
    ₹1,255.26 Cr
    YoY +76.5%
  • EBITDA
    ₹449.3 Cr
    YoY +68%
  • PBT Growth
    63.9%
  • PAT Growth
    67.7%
  • EPS
    ₹8.49
  • EBITDA Margin
    35.8%
  • Standalone KPI EBITDA Margin
    37%

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

3,610 MW

as of 2025-09-30 quantified

Inflow this quarter

396 MW

Execution

CPP order book to be closed by March '27

Composition

Mix 2 contract types
  • IPP (under execution) 33.2%
  • CPP (order book) 66.8%

Share of order book by contract type

The company is executing 1.2 GW of IPP orders and has a CPP order book of 2.41 GW, with new wins including 200MW solar for SJVN. The entire current CPP order book is expected to be closed by March '27.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • 250-megawatt solar, 370-megawatt hybrid, and 150-megawatt wind projects ₹5,500 Cr
    Together with 150-megawatt wind projects, these represent nearly INR5,500 crores in capex and which will post-commissioning, contribute significantly to our revenue and cash flows in the upcoming financial years.
  • Debt Debt disclosed
    • New borrowing India's first externally credit-enhanced green bond, backed by a 65% GuarantCo guarantee, rated AA+(CE) by CRISIL and ICRA. ₹670 Cr
    • New borrowing Term loan sanction from State Bank of India Project Finance Unit for 250-megawatt solar and 370-megawatt hybrid project. ₹3,200 Cr

Guidance & targets

Capacity

  • Group Level Portfolio Capacity · by 2030 · High confidence 10 gigawatts
    our long-term vision of reaching 10 gigawatts by 2030.

    — Salim Yahoo

  • IPP Capacity Capacity · by December '26 · High confidence 1.5 gigawatt
    By FY '26, that March '26, we will be around more than 1 gigawatt on the IPP side and remaining by September or December '26, we will be closing. So, 1.5 gigawatt IPP will be there by December '26, you can say.

    — Salim Yahoo

  • IPP Capacity Capacity · after March '27 · High confidence 1.7 gigawatt
    So, I think after March '27, we will have 1.7.

    — Salim Yahoo

Revenue

  • IPP Revenue Revenue · post 1.7GW IPP installation · High confidence more than INR1,000 crores
    So according to that our IPP revenue itself will be more than INR1,000 crores with an EBITDA margin of around 90%.

    — Salim Yahoo

  • Sun Drops Energia Top Line Growth Revenue · coming second half · High confidence 65% to 70% more than previous year
    But the next half, you will have -- you'll see substantial growth in the Sun Drops top line in the coming second half. ... I mean, we are looking at around 65% to 70% more than what we have done in the previous year.

    — Salim Yahoo

Margin

  • IPP EBITDA Margin Margin · post 1.7GW IPP installation · High confidence around 90%
    So according to that our IPP revenue itself will be more than INR1,000 crores with an EBITDA margin of around 90%.

    — Salim Yahoo

  • CPP EBITDA Margin Margin · ongoing · High confidence 18%-20%
    In CPP, our EBITDA is 18%-20%

    — Salim Yahoo

Profitability

  • Sun Drops Energia PAT Margin Profitability · ongoing · High confidence 16% to 18%
    PAT is on a similar range of 16% to 18% kind of a PAT.

    — Salim Yahoo

  • Overall PAT Level Profitability · ongoing · Medium confidence more than 20%
    We might cross more than 20% on the PAT level also.

    — Salim Yahoo

  • PAT Profitability · FY27 (after March) · Medium confidence INR1000 crores
    FY27, after March, our PAT, we are expecting to, as per our projections, we might go up to that level.

    — Salim Yahoo

Other

  • Sun Drops Energia Listing Other · next financial year · High confidence listing
    Most probably next financial year, we'll be planning the listing.

    — Salim Yahoo

What to watch in Q3 FY26

IPP Revenue from Khavda Project

by December '25 (Q3 FY26)
Current Delayed due to government substation not ready
Target Revenue generation to commence

Why it matters

Realization of revenue from a significant 240MW IPP project, impacting overall top-line and profitability.

So shortly, they have already expect to complete the GSS work by December,. So automatically, the revenue starts.

Risks & concerns

  • Share price underperformance and investor confidence

    medium

    Analyst noted the stock's underperformance despite strong results. Management attributed it to broader market dynamics, geopolitical conditions, and tariffs, emphasizing focus on execution.

    Analyst acknowledged

  • Related Party Transaction (RPT) concerns and transparency

    medium

    Analyst raised concerns about the perception of RPTs due to multiple 'KP' named companies. Management clarified arm's length transactions and committed to providing more transparency in future presentations.

    Analyst acknowledged

  • EBITDA margin compression

    low

    Analyst questioned continuous EBITDA margin squeezing, but management provided figures showing H1 standalone KPI EBITDA margin increased and overall margin was stable.

    Analyst denied

  • EPS growth not aligning with company growth due to equity dilution

    low

    Analyst raised concern about EPS growth. Management clarified no equity dilution in the last year and EPS has improved, attributing growth to capital-intensive IPP business.

    Analyst explained

  • Government RE project cancellations

    low

    Analyst questioned the impact of government directives to cancel non-viable RE projects. Management stated KPI Green is unaffected as all its PPAs are signed and viable.

    Analyst no impact on company

  • Grid infrastructure constraints and curtailment

    low

    Analyst raised concerns about grid readiness for solar expansion. Management highlighted KPI's ample evacuation approvals and government's focus on grid enhancement and DSM mechanisms.

    Analyst mitigated

Q&A highlights

7 direct
EBITDA margin squeezing despite IPP expansion Direct
I mean, EBITDA in first half of last year was 37.52%. This time it is 35.79%. So, there is not a too much difference. There might be a slight difference because of the nature of sales booking that happens. ... There is a substantial increase again in the EBITDA. It has matched up with that. So, I don't see any squeeze in the EBITDA, so for that.

Analyst questioned margin compression, but management clarified that overall EBITDA margins were stable or improved on a standalone basis, attributing minor variations to sales booking.

Asked by Rajat Gupta

EPS growth not aligning with company growth and future funding sources Direct
Rajat, there is one thing you have to understand that one is that we have not diluted any equity in the last one year after our QIP of INR1,000 crores. After that, there is no dilution after that Promoter is at present 48%, and you need to also understand, we are into capital-intensive business, where we have IPP, where we have to setup the renewable plant to get annuity income. ... So, borrowed funds will be there, but it will be we will keep a watch, a close watch on it, and we'll not let it go too high.

Analyst raised concerns about shareholder wealth alignment and funding. Management clarified no recent equity dilution, explained the capital-intensive nature of IPP business, and committed to prudent debt management, hinting at new funding types.

Asked by Rajat Gupta

Impact of government notification on RE project cancellations Direct
So as far as KPI is concerned, none of our projects are stuck in any of those what we say is the government notification and anything. ... Whereas the KPI is concerned, KPI has zero impact because we have already closed all our IPP PPAs.

Analyst questioned the risk of project cancellations. Management assured that KPI Green's projects are not impacted as all PPAs are signed and viable, including a GUVNL PPA at a competitive rate.

Asked by Garvit Goyal

Grid infrastructure readiness for solar expansion Direct
So KPI, as you have seen in our presentation also, we have evacuation approvals of approximately 3.46 gigawatt in KPI itself, which is far more enough for us to cater for our upcoming projects. Government has focused on enhancing the evacuation infrastructure. ... So, I don't think there is any challenges in the future looking at the 500 gigawatt for the grid penetration.

Analyst raised concerns about grid constraints. Management highlighted KPI's ample evacuation approvals and the government's focus on strengthening grid infrastructure and implementing smart grid mechanisms to support RE growth.

Asked by Garvit Goyal

Update on promoter pledge percentage Direct
So, our pledge was with SBI. So, we have clearly recommended them for release of the pledge shares. And in our current sanction, we have got an approval that by the end of this COD of GUVNL Projects. After that, within six months, that is we look at around March '27, the entire pledge will be released by State Bank of India.

Analyst sought an update on promoter pledge. Management provided a clear timeline for the release of the entire pledge by SBI around March '27, as per the sanction letter.

Asked by Garvit Goyal

Order pipeline visibility and green ammonia/hydrogen breakthrough Direct
I also talked about order pipeline of CPP IPP's order pipeline you know that we are executing 1.2 gigawatt of IPP Order. And in CPP, I mentioned names like SJVN, Aditya Birla, Avichal, and then existing CIL, MahaGenco, we have all these orders. ... We have already constructed 1 MW in Matar for its facility. So, we will be blending green hydrogen with our existing LPG. So, we have already put that prototype and we are starting it in a few days.

Analyst inquired about the order book and new technology. Management detailed the IPP and CPP order pipeline and provided an update on the 1 MW green hydrogen prototype, indicating progress in future-ready segments.

Asked by Shashank Jha

Delay in revenue from energized IPP projects Direct
So, out of this additional IPP, which we energized, one was 240-megawatt Khavda project. In Khavda project, we have completed our project. But what happened was the evacuation was in the scope of the government. Now, that evacuation GSS, as we call it, government substation was not ready, and it is still taking time. ... So shortly, they have already expect to complete the GSS work by December,. So automatically, the revenue starts.

Analyst questioned the delay in revenue from recently energized IPP capacity. Management clarified the delay for the 240MW Khavda project was due to government-side evacuation infrastructure, not their execution, with revenue expected by December.

Asked by Anil

BESS and green ammonia margins and viability Partial
Those two segments, we have a separate company for Green Ammonia and Hydrogen. So those companies will be separate. They are not part of the KPI or its subsidiary. So their margins and viability will be seen separately. That will be separate. At present, it is not a listed company. It is a privately made company where we are going to do those first.

Analyst inquired about the profitability of new segments. Management clarified that BESS and green ammonia will be handled by separate, unlisted entities, implying their financial performance will not directly impact KPI Green's reported margins initially.

Asked by Samrat Shah

2 min read 6 chapters

Detailed narrative

Robust Financial Performance in Q2 and H1 FY26

KPI Green Energy reported a strong Q2 FY26, with revenue growing 78% year-on-year to ₹641.1 crores and PAT increasing 67% to ₹117 crores. For the first half of FY26, total revenue reached ₹1,255.26 crores, a 76.5% growth from the previous year, with EBITDA up 68% to ₹449.3 crores. The company's EPS for Q2 FY26 stood at ₹4.82, and for H1 FY26, it was ₹8.49, reflecting consistent profitability and operational leverage.

Strategic Financing and Capital Structure Enhancement

The company achieved significant milestones in financing, securing a ₹3,200 crores term loan from State Bank of India for its 250MW solar and 370MW hybrid projects under a long-term GUVNL PPA. Additionally, KPI Green issued India's first externally credit-enhanced green bond of ₹670 crores, backed by a 65% GuarantCo guarantee. These initiatives reinforce investor confidence and strengthen the company's capital structure, supporting its large-scale IPP growth.

Expanding Order Book and Execution Pipeline

KPI Green's order book continues to strengthen, with 1.2 gigawatts of IPP projects currently under execution and a CPP order book of 2.41 gigawatts. Recent CPP wins include 200MW solar with SJVN, 96MW BoS for Aditya Birla Renewables, and a 100MW repeat order from Avichal Power. The company's group-level portfolio stands at 6 gigawatts, with a long-term vision to reach 10 gigawatts by 2030, indicating a robust pipeline for future growth.

Venturing into Future-Ready Technologies and Diversification

The company is strategically expanding into emerging sectors and future-ready technologies. It has signed MOUs with Delta Electronics India for collaboration on battery energy storage systems, green hydrogen, and EV charging infrastructure. A 1 MW green hydrogen prototype has been constructed in Matar, where testing for blending green hydrogen with LPG is commencing, demonstrating a commitment to sustainability-driven growth and technological innovation.

Addressing Sectoral Challenges and Investor Concerns

Management clarified that government directives on cancelling non-viable renewable energy projects do not impact KPI Green, as all its IPP PPAs are signed and viable. Concerns regarding grid infrastructure readiness for solar expansion were addressed by highlighting KPI's 3.46 gigawatts of evacuation approvals and the government's focus on enhancing grid stability. The company also committed to releasing promoter pledge by March '27 and providing more transparency on related-party transactions in future presentations.

Subsidiary Performance and Future Listing Plans

Sun Drops Energia, a subsidiary, reported a top line of approximately ₹125 crores in Q2 FY26 and is projected to achieve 65-70% year-on-year growth in the second half of the fiscal year, maintaining a PAT margin of 16-18%. The company plans to list Sun Drops Energia in the next financial year, aiming to unlock further value and provide additional growth avenues.

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