💰 Financial Performance

Revenue Growth by Segment

The core EPC business (Solar Pumps and Rooftop) grew 51.75% YoY in H1 FY26 to INR 636.82 Cr from INR 419.66 Cr. Trading of Solar cells (DCR) and others grew significantly to INR 92.01 Cr in H1 FY26 from INR 45.55 Cr in FY25, driven by strategic supply chain initiatives.

Geographic Revenue Split

Operations are concentrated in high-potential agricultural states including Maharashtra, Haryana, Rajasthan, Uttar Pradesh, and Madhya Pradesh, which collectively account for over 85% of national PM-KUSUM allocations.

Profitability Margins

Operating Profit Margin (OPM) improved to 18.2% in FY25 from 13.1% in FY24. PAT margin rose to 12.1% in FY25 from 8.8% in FY24, aided by operating leverage and volume-based procurement efficiencies. H1 FY26 consolidated PAT margin stood at 11.56%.

EBITDA Margin

Consolidated EBITDA margin was 18.34% in H1 FY26 (INR 133.70 Cr). The core EPC segment achieved a higher EBITDA margin of 20.20% in H1 FY26, a 124 bps improvement over 18.96% in H1 FY25, due to expertise-driven volume growth and an asset-light model.

Capital Expenditure

The company plans to set up a largely debt-funded solar module assembly plant for captive consumption in a phased manner to support backward integration, though specific INR Cr values for the plant were not disclosed. Fixed assets increased from INR 13.97 Cr in FY25 to INR 89.36 Cr in H1 FY26.

Credit Rating & Borrowing

Infomerics and ICRA have assigned/upgraded ratings with a 'Stable' outlook. Borrowing costs are supported by a healthy interest coverage ratio of 8.96x in FY25. Total debt-to-equity improved to 0.53x in H1 FY26 following a INR 500 Cr IPO infusion.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Solar Cells (Domestic Content Requirement - DCR), which are procured via partnerships with manufacturers, and Solar Modules/Panels. These constitute the bulk of the EPC project costs.

Import Sources

Sourcing is primarily domestic to comply with DCR (Domestic Content Requirement) mandates under government schemes, focusing on Indian solar cell and module manufacturers.

Key Suppliers

The company partners with leading solar cell manufacturers to procure and supply cells to module manufacturers. Specific vendor names are not disclosed, but they operate under a 'cash-and-carry' procurement methodology.

Capacity Expansion

Installed 24,502 solar agri-pumps in H1 FY26, a 50.77% increase over 16,251 pumps in H1 FY25. Planned expansion includes a new solar module assembly plant to transition from a pure-play EPC to a partially integrated manufacturer.

Raw Material Costs

Raw material costs are managed through an asset-light model where price fluctuations are negotiated with vendors. Trading revenue from solar cells (INR 92.01 Cr) was a strategic move to secure the supply chain and understand panel manufacturing costs.

Manufacturing Efficiency

Efficiency is driven by 'expertise-involved' volume growth and a D2C (Direct-to-Consumer) approach for farmer-side allocations, allowing for better margin retention despite competitive bidding.

Logistics & Distribution

The company utilizes third-party installation partners for decentralized operations, which helps manage distribution costs across rural regions.

📈 Strategic Growth

Expected Growth Rate

418%

Growth Strategy

Growth is driven by a robust outstanding order book of INR 1,029 Cr as of August 2025. Strategy includes geographic diversification beyond Maharashtra, backward integration into module assembly, and leveraging the PM-KUSUM and PM Suryaghar Yojna schemes.

Products & Services

Solar-powered agricultural water pump systems (Agri-pumps) and Rooftop Solar solutions (1235.20 KW installed in H1 FY26).

Brand Portfolio

GK Energy.

New Products/Services

Expansion into Solar Rooftop systems under PM Suryaghar Yojna and planned captive solar module manufacturing.

Market Expansion

Targeting increased penetration in Haryana, Rajasthan, UP, and MP to reduce geographic concentration in Maharashtra.

Market Share & Ranking

Self-identified as India’s largest pure-play provider of EPC services for solar-powered agricultural water pump systems.

Strategic Alliances

Partnered with a leading solar cell manufacturer for strategic sourcing; works with state nodal agencies like MREDA, MEDA, and HREDA.

🌍 External Factors

Industry Trends

The industry is shifting toward massive scale-up via PM-KUSUM and PM Suryaghar Yojna (25-27 GW rooftop capacity expected). GK Energy is positioning itself by moving from a pure asset-light model to backward integration to capture more value.

Competitive Landscape

Faces intense competition from organized players (e.g., Shakti Pumps) and unorganized local players in the agri-pump segment.

Competitive Moat

Moat is built on a strong execution track record, empanelment with key state agencies, and a D2C-like expertise in handling large-scale rural installations. Sustainability depends on maintaining these government relationships.

Macro Economic Sensitivity

Highly sensitive to government fiscal policy and subsidy outlays for renewable energy in the agricultural sector.

Consumer Behavior

Increasing farmer acceptance of solar pumps over diesel/grid power due to government subsidies and reliable irrigation.

Geopolitical Risks

Potential trade barriers on solar components; mitigated by focusing on Domestic Content Requirement (DCR) compliant sourcing.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by MNRE standards and state-specific nodal agency guidelines for PM-KUSUM and rooftop solar installations.

Environmental Compliance

Business is inherently ESG-aligned by replacing diesel pumps with solar; projects comply with Ministry of New and Renewable Energy (MNRE) quality standards.

Legal Contingencies

No adverse social incidents or disputes reported; company maintains compliance with statutory employee welfare requirements.

⚠️ Risk Analysis

Key Uncertainties

Policy risk (99% dependence on government schemes) and tender-based revenue volatility are the primary uncertainties.

Geographic Concentration Risk

Over 85% of revenue visibility is tied to five specific states (Maharashtra, Haryana, Rajasthan, UP, MP).

Third Party Dependencies

High dependency on third-party installation partners and solar component manufacturers for project execution.

Technology Obsolescence Risk

Risk of shifting solar cell technologies; company is mitigating this by deepening its understanding of panel manufacturing through strategic cell-trading partnerships.

Credit & Counterparty Risk

Receivable days stood at 120 in FY25 and increased to 198 in H1 FY26. While counterparty risk is low (government agencies), payment delays impact working capital.