KPI Green Energy

KPI Green Energy reported a strong Q3 FY25 with total revenue reaching ₹466.1 crores, marking a 40.6% year-on-year increase. The company's EBITDA stood at ₹144.54 crores, reflecting a 38% YoY growth, while profit after tax surged by 68.26% to ₹85.15 crores. This performance underscores the effectiveness of operational execution and strategic financial planning, despite a slight quarter-on-quarter dip in EBITDA margin attributed to seasonality and billing milestones.

For the nine months ended December 31, 2024, KPI Green Energy achieved a total revenue of ₹1,177.35 crores, representing a 59.5% increase over the previous year's corresponding period. The nine-month EBITDA grew by 66% to ₹411.44 crores, and profit after tax reached ₹221.1 crores, an 86% increase. These figures indicate that the company has already surpassed its full-year financial performance across all key parameters from the previous fiscal year.

As of January 15, 2025, KPI Green Energy's installed capacity has grown to over 533 megawatts, supported by a strong order book of 2.86 gigawatts. Key projects include a 300-megawatt AC solar PV project for Coal India Limited (valued at ₹1,300 crores), a 240-megawatt DC solar project at Khavda (valued at ₹900 crores), and a 100-megawatt AC solar project in Maharashtra. The company also has approximately 1.3 gigawatts from GUVNL, with a total project value of ₹2,650 crores for Coal India, Khavda, and Aditya Birla projects combined.

KPI Green Energy is actively expanding its footprint beyond Gujarat, with strategic MOUs signed with the governments of Rajasthan and Odisha. In Rajasthan, the company aims to create local employment and cater to small and medium-scale industries, with plans for 500-megawatt wind and solar capacity. Similar efforts are underway in Odisha, with a target of 1,500-megawatt solar potential. Management expressed confidence in navigating land acquisition and other challenges in these new states due to their extensive experience and strong team.

The company emphasizes meticulous planning and back-to-back tie-ups with module manufacturers to mitigate supply chain risks and price fluctuations. For IPP projects, tender clauses allow for price adjustments based on module cost changes. Management highlighted that their integrated approach, including in-house manufacturing of components like MMS structures and windmill towers through KP Green Engineering, provides a competitive advantage in executing projects within or ahead of timelines.

KPI Green Energy's IPP segment involves investing its own capital to set up plants and sell power, with sufficient order book and tied-up debt capital. The company aims to increase its IPP component from the current 13% to 21-22% going forward^⏳, which is expected to help maintain PAT margins. While current IPP realization is around ₹6 per unit, new GUVNL projects are at ₹3 per unit, leading to an average blended rate of ₹4-4.5 per unit, with lower costs ensuring sustained IRR.

Management clarified that the existing share pledging is collateral provided long ago to institutions like PFC and SBI, not for fund-raising. The total pledge is around 21-22% of the company's shares, with the loan for the Khavda project being ₹400-500 crores against a pledge amount of ₹3,000-4,000 crores. SBI has indicated a positive response and is in discussions to release the pledges, which is expected to happen gradually.

The company is positive about future growth, targeting 10 gigawatts of participation by 2030, aligning with India's net-zero goals. Beyond solar and hybrid projects, KPI Green Energy is exploring new verticals, with a particular focus on green hydrogen. Management indicated plans to set up a smaller prototype hydrogen plant shortly, signaling a strategic move into this emerging sector and promising further surprises for the market.