KPI Green Energy Limited — Q4 FY25 earnings call

Call held 19 May 2025

Management summary

KPI Green Energy reported a strong Q4 and full-year FY25, with revenue and PAT growing significantly due to accelerated project execution and higher capacity utilization. The company successfully raised ₹1,000 crores via QIP, improving its credit profile. Management outlined plans for scaling IPP capacity to 1.5 GW, expecting improved EBITDA margins, and discussed new initiatives in BESS and green hydrogen, alongside expansion into new states. Concerns were raised regarding ROCE/ROE dilution post-QIP and a recent order cancellation, which management addressed.

Highlights

  • Q4 FY25 Revenue grew 97% YoY to ₹577.80 crores, driven by accelerated project execution and higher capacity utilization.

  • Q4 FY25 PAT increased 142% YoY to ₹104.18 crores, reflecting disciplined financial management.

  • FY25 Total Revenue reached ₹1,755.16 crores, a substantial increase of 70.3% YoY.

  • FY25 PAT grew 101% YoY to ₹325.28 crores, underscoring strong project pipeline and demand.

  • Successfully raised ₹1,000 crores through QIP, strengthening credit profile and upgrading rating to ICRA A positive.

  • Secured landmark EPC contracts including 300 MW AC from Coal India Limited and 100 MW AC from MAHAGENCO.

Concerns

  • ROCE/ROE has seen a decline due to substantial increase in net worth from QIP, though management attributes it to capital-intensive IPP business.

  • A 66 MW order from Sai Bandhan Infinium was cancelled due to issues on the designing side and the customer's inability to secure funding.

  • CPP realizations appeared high at ₹9 crores/MW in FY25 compared to a standard ₹4-5 crores/MW, which management clarified is due to milestone-based billing vs. capacity energization.

Key financials

2 periods

Q4 FY25

  • Revenue
    ₹577.8 Cr
    YoY +97%
  • EBITDA
    ₹169.43 Cr
    YoY +76%
  • PBT
    ₹138.7 Cr
    YoY +131%
  • PAT
    ₹104.18 Cr
    YoY +142%

FY25

  • Total Revenue
    ₹1,755.16 Cr
    YoY +70.3%
  • PAT
    ₹325.28 Cr
    YoY +101%

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.

Segment breakdown

SegmentEBITDA MarginRevenue Contribution (FY25)
IPP85%13%
CPP20%87%
Combined32%—

Order book

high confidence

Total value

1.76 gigawatts

as of 2025-03-31 quantified

Execution

majority will get executed this year itself and a part will flow down to the next year

Pipeline

other

Order book can go above INR 3,000 crores for 1.76 GW CPP projects.

Cancellations & deferrals

  • cancelled: 66 MW order from Sai Bandhan Infinium was cancelled due to issues on the designing side and customer's funding incapability.
The company has a strong CPP order book of 1.76 GW, with the majority expected to be executed in the current year, and anticipates further order inflows to cover FY27 targets.

Source: Q&A

Capital allocation

high confidence
  • Capex ₹4,000 Cr A portion will go this year and next year, in a phase-wise manner.
    • IPP capacity addition of 1.5 gigawatts ₹4,000 Cr
    And as far as CAPEX is concerned, approximately around INR 4,000 crores of CAPEX is expected to put into the IPP of 1.5, which will be in phase-wise manner. This year, a portion will go and next year, some portion will go.
  • Debt Debt disclosed
    Last time, it was around 0.5. It has come to 0.33, which should also give comfort that we have reduced also interest burden. So overall, it is good because until and unless we show growth, and the growth is going to come from infusion of funds or adding more and more assets, because CPP will bring to us an extent of profitability. But beyond that, it is the IPP that is going to drive the future in renewable energy. So that's the reason we have taken a cautious call, but we are not overdriven by increasing too much debt. In fact, debt has reduced compared to last year, if you look at the debt equity ratio.
  • Liquidity Cash ₹597 Cr Cash and cash equivalents at the end of the year, including an increase of INR 427 crores.
    If I add the opening of the last year, altogether, we have INR 597 crores of cash and cash equivalent at the end of the year.

Guidance & targets

Growth

  • Overall Growth Growth · year-on-year · High confidence 60% to 70%
    See, as far as next year is concerned, we have already multiple times, our CMD Chairman, Dr. Faruk Patel has also given that we are committed to at least 60% to 70% growth year-on-year. And we have done this year. We are very positive that we will improve the same in the next year also.

    — Salim Yahoo

Capacity

  • IPP Operational Capacity Capacity · next couple of years · High confidence 1.5 gigawatts
    Now this will come into a phased manner. So we see to it that is 1.5 gigawatts will totally be operational in next couple of years.

    — Salim Yahoo

  • KP Group Installed Capacity Capacity · FY 2030 · Medium confidence 10 gigawatt
    As you are aware, the 10 gigawatt is at a group level that we have given. But looking at the way we are growing, more around 60% to 70%, sir, would come from KPI and its subsidiaries, and we might surpass also this target, depending upon the way it is moving on.

    — Salim Yahoo

Revenue

  • IPP Revenue (from 1.5 GW) Revenue · FY28 · High confidence entire 1.5-gigawatt revenue
    So if you can say FY '25-'26, '26-'27. So '27-'28 will be the first full year where we will be able to get the entire 1.5-gigawatt revenue.

    — Salim Yahoo

Profitability

  • PAT Margin Profitability · future · High confidence 17% to 19%
    But we will be able to maintain our margin of 17% to 19% margin at a PAT level.

    — Salim Yahoo

  • Combined EBITDA Margin Profitability · future (with IPP scaling) · High confidence 32% to 33%
    Combined EBITDA margin would be around 32% to 33%.

    — Salim Yahoo

Order Book

  • Order Book for FY27 Order Book · by end of first or the second quarter of this year · High confidence entire FY '27 is also, will be booked
    But just to highlight that we already have bid pipelines where we are confident we will be winning those pipelines. So I think by end of first or the second quarter of this year, you will be able to see that the entire FY '27 is also, will be booked.

    — Salim Yahoo

What to watch in Q1 FY26

Booking of FY27 Order Book

by end of first or second quarter of FY26
Current Bid pipelines in progress
Target Entire FY27 order book booked

Why it matters

This will provide clear visibility on the company's growth trajectory for the next fiscal year.

So I think by end of first or the second quarter of this year, you will be able to see that the entire FY '27 is also, will be booked.

Risks & concerns

  • Order cancellation due to customer issues

    medium

    A 66 MW order was cancelled from Sai Bandhan Infinium due to design issues and the customer's inability to secure funding, highlighting risks associated with client financial health.

    Analyst acknowledged

Q&A highlights

8 direct
Margin profile evolution with IPP scaling and BESS contribution Direct
Our final goal is to at least take this IPP portfolio to 25% and the remaining to our CPP portfolio. With that increase, naturally, the margins will improve because, as we all know, that IPP brings in a strong EBITDA margin around-85% to 90%, and the CPP brings around 20% to 22%. Combined EBITDA margin would be around 32% to 33%.

Clarifies the long-term strategy for margin improvement through a higher IPP mix and provides specific margin targets for IPP and CPP segments.

Asked by Garvit Goyal

ROCE/ROE decline despite growth, impact of QIP Direct
But it is not because of the performance decrease. It is because our net worth has increased substantially with the QIP offset. And understand, you are saying diluting. But you need to understand that we are into a business which is a very capital-intensive business. The IPP segment is a very capital-intensive business.

Addresses analyst concern about declining ROCE/ROE, explaining it as a consequence of increased net worth from QIP and the capital-intensive nature of IPP projects, which are long-term annuity assets.

Asked by Rajat Gupta

CPP realizations (INR 9 crores/MW vs standard INR 4-5 crores/MW) and normalization Direct
Yes. Parth, the calculation that you did is not what the calculation we do. See, in our CPP business, our billing is done on a milestone basis. So there are 10 to 15 milestones for any particular project, milestone depending upon the supply, milestone depending upon the work contract like piling, installations and everything. So our billing is done on the milestone basis, but we add the capacity only when we energize the entire plant. So there will always be a disparity between your top line and your the energized capacity.

Clarifies the discrepancy in CPP realization figures, attributing it to milestone-based revenue recognition versus capacity energization, which can lead to temporary mismatches.

Asked by Parth Kotak

Economics of IPP business (unit rate, cost, debt-equity, equity IRR) Direct
So if you look at the average IRR that we get on any project, it would be around 12% to 13% IRR for any IPP project when I am talking about IPP project. Equity IRR would be around 17% to 18%.

Provides specific financial metrics for IPP projects, including project IRR (12-13%) and equity IRR (17-18%), and confirms the debt-equity ratio of 75%-25%.

Asked by Anil Sarin

Battery Energy Storage System (BESS) opportunity and mandate for PSU companies Direct
So now state like Rajasthan, they have said that all the solar projects should come with a 5% BESS mandatory. That means what? So whatever the solar generation can be stored it should be mandated. And whenever the peak time requirement, that battery can be discharged. So now this is becoming a very mandatory grid requirement, where power can be generated based on the resource available, and when the demand is asking, then that time it will be discharged.

Highlights the emerging BESS market, driven by state mandates (e.g., 5% mandatory BESS for solar projects in Rajasthan), and KPI Green's strategic interest in this upcoming technology.

Asked by Pranjal Soni

SBI collateral pledging status and increasing trade receivables Direct
As far as trade receivable is concerned, I think receivables have improved. If you see the number of days, we were at 150 plus receivable days, we have come down to 120. So that is a substantial improvement in the receivable.

Provides an update on the SBI collateral pledging process and clarifies that trade receivables have improved, with receivable days reducing from over 150 to 120.

Asked by Mitesh Vora

Free cash flow generation, CAPEX for 1.5 GW IPP, and funding sources Direct
Yes. So Rajesh, we have already induced the equity portion, or we already have equity portion that is 25%. We go with a mix of 75%-25%, 75% as a debt and 25% as an equity portion. So for the rest of the 75%, we already have in principal sanction from some of the top lenders of the Indian economy, you can say, or the infrastructure lenders, which are there. So we are quite confident that we'll be able to get these funds also released in the short period.

Details the funding strategy for the ₹4,000 crore CAPEX for 1.5 GW IPP, confirming 25% equity and 75% debt, with principal sanctions already secured from lenders.

Asked by Rajat Gupta

1 GW capacity target by CY25 (group vs KPI Green) and risk of order cancellations Direct
What Dr. Faruk Patel always speaks about, he speaks about at a group level. Like 10 gigawatts is also spoken at group level. So 1 gigawatt, which he spoke at the time was at group level. So at a group level, we have already surpassed that long back in FY '24 itself.

Clarifies that the 1 GW capacity target by CY25 and 10 GW by FY30 are group-level targets, which KPI Green has already surpassed at the group level for the 1 GW target.

Asked by Samrat Shah

3 min read 6 chapters

Detailed narrative

Q4 & FY25 Financial Performance Highlights

KPI Green Energy delivered a robust performance in Q4 FY25, with revenue reaching ₹577.80 crores, marking a 97% year-on-year growth. EBITDA for the quarter rose 76% to ₹169.43 crores, and PAT surged 142% to ₹104.18 crores. For the full fiscal year 2025, total revenue stood at ₹1,755.16 crores, a 70.3% increase over the previous year, while PAT grew 101% to ₹325.28 crores. This strong financial outcome was attributed to accelerated project execution and higher capacity utilization.

Strategic Capacity Expansion & IPP Focus

The company is strategically expanding its IPP capacity, with 1.5 gigawatts currently in the pipeline for execution. This capacity will be commissioned in a phased manner over the next couple of years, with full revenue realization expected by FY28. Management aims to increase the IPP portfolio contribution to 25% of total revenue, which is expected to significantly boost overall EBITDA margins from the current 30-33% to 85-90% for IPP, compared to 20-22% for CPP. The total CAPEX for this 1.5 GW IPP expansion is estimated at ₹4,000 crores, funded by a 25% equity and 75% debt mix, with principal sanctions already secured.

Order Book & Execution Outlook

KPI Green Energy holds a strong CPP order book of 1.76 gigawatts, with the majority slated for execution within the current fiscal year. The revenue potential from this order book is projected to exceed ₹3,000 crores. The company anticipates booking the entire FY27 order book by the end of Q1 or Q2 FY26, indicating strong visibility and confidence in future order inflows. Management noted that while a 66 MW order was cancelled due to client-side design and funding issues, the overall order pipeline remains robust.

Capital Structure & Funding

The company successfully raised ₹1,000 crores through a Qualified Institutional Placement (QIP), attracting marquee investors like Morgan Stanley and Goldman Sachs. This capital infusion has substantially increased the net worth, leading to an improved debt-equity ratio of 0.33 from 0.5 previously, and an upgraded credit rating to ICRA A positive. Cash and cash equivalents stood at ₹597 crores at the end of FY25, including a ₹427 crore increase during the year, providing ample liquidity for ongoing projects and future growth.

New Business Initiatives (BESS, Green Hydrogen, State Expansion)

KPI Green Energy is actively exploring new growth avenues, including Battery Energy Storage Systems (BESS) and green hydrogen. The BESS market is gaining traction with states like Rajasthan mandating a 5% BESS component for solar projects, presenting a significant opportunity. The company is in the process of market exploration and proto model development for BESS. For green hydrogen, KPI Green plans to leverage its strong entity for market entry, with a separate entity for green hydrogen. The company is also expanding its geographical footprint beyond Gujarat, having signed MOUs with Odisha, Rajasthan, and Madhya Pradesh for larger-scale solar and hybrid projects.

Operational Efficiency & Realizations

The company has advanced its network operations, achieving 24/7 monitoring and predictive maintenance, which has boosted fleet availability to 98.5%. In terms of CPP realizations, management clarified that the reported ₹9 crores per megawatt in FY25, higher than the standard ₹4-5 crores, is due to milestone-based billing for projects rather than solely on energized capacity. Trade receivables have shown improvement, with receivable days reducing from over 150 to 120, indicating better collection efficiency.

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