20-05-2025
KPI Green Energy Ltd (BOM:542323) Q4 2025 Earnings Call Highlights: Record Revenue Surge and ...
Q4 Revenue: INR 577.80 crores, up 97% year-on-year from INR 292.97 crores.
Q4 EBITDA: INR 169.43 crores, a 76% increase.
Q4 Profit Before Tax (PBT): INR 138.70 crores, up 131%.
Q4 Profit After Tax (PAT): INR 104.18 crores, a 142% increase.
Full Year Revenue: INR 1,755.16 crores, up 70.3% from INR 1,030.82 crores.
Full Year EBITDA: INR 580.87 crores, a 69.1% increase.
Full Year Profit Before Tax (PBT): INR 440.90 crores, up 103%.
Full Year Profit After Tax (PAT): INR 325.28 crores, a 101% increase.
Institutional Placement: Raised INR 1,000 crores, including investors like Morgan Stanley and Goldman Sachs.
Credit Rating: Upgraded to ICRA A positive.
Major Contracts: Secured EPC contracts of 300 MW AC from Coal India Limited and 100 MW AC from MAHAGENCO.
Fleet Availability: Improved to 98.5% through advanced network operations.
Warning! GuruFocus has detected 6 Warning Signs with BOM:542323.
Release Date: May 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
KPI Green Energy Ltd (BOM:542323) reported a record revenue of INR577.80 crores for Q4 FY25, marking a 97% year-on-year increase.
The company achieved a significant rise in profit after tax (PAT), which climbed 142% to INR104.18 crores.
KPI Green Energy Ltd successfully raised INR1,000 crores through qualified institutional placement, enhancing its credit profile.
The company secured a landmark EPC contract of 300 megawatts AC from Coal India Limited and 100 megawatts AC from MAHAGENCO.
KPI Green Energy Ltd advanced its technology with 24/7 monitoring and predictive maintenance, achieving a fleet availability of 98.5%.
The company's EBITDA margin is under pressure due to the mix of IPP and CPP projects, with CPP margins being lower.
There is a concern about the declining return on capital employed (ROCE) and return on equity (ROE) due to increased net worth from equity infusion.
The company faces challenges in maintaining high margins as it scales its IPP portfolio, which is capital-intensive.
There are concerns about the potential impact on EPS if further equity is raised to fund growth.
The company has experienced order cancellations, such as the 66-megawatt order from Sai Bandhan, due to customer funding issues.
Q: How do you expect the overall margin profile to change as your IPP portfolio scales over 1.5 gigawatts, and how will the shift in business impact consolidated margins in FY26 and '27? A: Salim Yahoo, CFO: As we increase our IPP capacity to 1.5 gigawatts, we aim to have IPP contribute 25% to our portfolio. IPP typically offers higher EBITDA margins of 85% to 90%, compared to CPP's 20% to 22%. This shift will likely improve our consolidated margins, although the exact impact will depend on the balance between IPP and CPP additions.
Q: Given the growth via equity liquidation or debt raising, how do you address concerns about declining ROCE and ROE? A: Salim Yahoo, CFO: The decrease in ROCE and ROE is due to increased net worth from QIP, not performance decline. Our business is capital-intensive, requiring significant funds for long-term assets. We have reduced our debt-equity ratio from 0.5 to 0.33, indicating improved financial health. Growth requires capital infusion, particularly in IPP, which drives future profitability.
Q: What is the guidance for next year's growth, and how will IPP contributions affect the bottom line? A: Salim Yahoo, CFO: We are committed to 60% to 70% year-on-year growth. The 1.5 gigawatts of IPP capacity will be operational in phases, with full revenue impact expected by FY27-28. As IPP contributions increase, we anticipate stronger EBITDA and PAT margins, maintaining a PAT margin of 17% to 19%.
Q: How is KPI Green addressing the competitive intensity in the EPC segment, and what impact does this have on pricing and order acquisition? A: Salim Yahoo, CFO: With a competitor exiting the market, we have a strong order book of 2.2 gigawatts. Our decade-long experience in executing wind and solar projects allows us to bid competitively. We focus on execution capability and competitive pricing to secure new orders, despite ongoing competition.
Q: What are the revenue expectations for the 1.76 gigawatts of CPP order book, and how will it be executed? A: Salim Yahoo, CFO: The 1.76 gigawatts CPP order book is expected to generate over INR3,000 crores in revenue. Most of this will be executed within the current year, with some portions extending into the next year. The order book includes projects with varying scopes, impacting revenue realization.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
