KARMAENG - Karma Energy Ltd

📊 NSE: KARMAENG 🏢 Power Generation And Supply 📅 Last Updated: 12/14/2025 8:49

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single business segment: Generation of Power from Renewable Sources. Revenue from operations for H1 FY26 was INR 7.68 Cr, representing a growth of 12.71% compared to INR 6.82 Cr in H1 FY25.

Geographic Revenue Split

Specific geographic split is not disclosed, but the company mentions interactions with the Tamil Nadu Electricity Regulatory Commission, indicating significant operations or revenue interests in Tamil Nadu.

Profitability Margins

Net Profit Margin for H1 FY26 was 18.88% (INR 1.66 Cr profit on INR 8.77 Cr total income), a significant decline from 31.81% in H1 FY25 (INR 2.66 Cr profit on INR 8.35 Cr total income). The margin compression is primarily due to a 54.34% spike in Operation and Maintenance costs.

EBITDA Margin

EBITDA Margin for H1 FY26 stood at approximately 36.77% (EBITDA of INR 3.22 Cr). Core profitability was impacted by rising operational expenses despite the 12.71% increase in operational revenue.

Capital Expenditure

Property, Plant and Equipment (PPE) was valued at INR 20.10 Cr as of September 30, 2025, down from INR 21.42 Cr as of March 31, 2025, primarily due to depreciation and amortization of INR 1.00 Cr during the half-year period.

Credit Rating & Borrowing

Total borrowings as of September 30, 2025, were INR 0.91 Cr (INR 0.67 Cr non-current and INR 0.24 Cr current). Finance costs for H1 FY26 were INR 0.087 Cr, up 33.6% YoY from INR 0.065 Cr.

⚙️ Operational Drivers

Raw Materials

As a renewable power generator, the company does not have traditional raw material costs; however, Operation and Maintenance (O&M) costs are the primary operational driver, representing 36.6% of total income in H1 FY26.

Import Sources

Not disclosed in available documents as the primary input is renewable energy (wind/solar/hydro).

Capacity Expansion

Current installed capacity in MW is not disclosed. Non-current assets (PPE) decreased by approximately 6.17% over the six-month period ending September 30, 2025, suggesting no major recent capacity additions.

Raw Material Costs

O&M costs increased to INR 3.21 Cr in H1 FY26 from INR 2.08 Cr in H1 FY25, a 54.34% increase, significantly impacting the bottom line.

Manufacturing Efficiency

Debtors turnover ratio improved to 92.68% in FY25 from 79.90% in FY24, indicating better collection efficiency. Inventory turnover also improved to 22.97% from 16.46%.

Logistics & Distribution

Not applicable for power generation as electricity is transmitted via grid; distribution costs are typically handled by state utilities.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

The company focuses on the recovery of old debts, booking profits on investments, and generating interest income. Strategic growth is also tied to regulatory favorable orders, such as the interest recovery from the Tamil Nadu Electricity Regulatory Commission.

Products & Services

Electricity generated from renewable energy sources.

Brand Portfolio

Karma Energy, Ecopower.

Strategic Alliances

The company does not have any subsidiaries, associates, or joint ventures as of September 30, 2025.

🌍 External Factors

Industry Trends

The industry is moving toward 100% renewable integration. Karma Energy is positioned as a pure-play renewable generator, benefiting from the global shift away from fossil fuels, though it faces rising maintenance costs for aging assets.

Competitive Landscape

The landscape includes large-scale IPPs (Independent Power Producers) and state-owned utilities. Karma Energy is a smaller, specialized player.

Competitive Moat

The moat consists of established renewable energy assets and long-term regulatory clearances. Sustainability is tied to the ability to manage O&M costs and recover long-standing receivables from state utilities.

Macro Economic Sensitivity

Sensitive to interest rate changes and regulatory shifts in the renewable energy sector. GDP growth typically drives higher industrial power demand.

Consumer Behavior

Increasing corporate and government demand for 'green' power supports long-term demand for the company's output.

Geopolitical Risks

Minimal direct impact as operations are domestic, but global supply chains for renewable components (turbines/panels) could affect future expansion costs.

⚖️ Regulatory & Governance

Industry Regulations

Operations are strictly governed by the Electricity Act and state regulatory commissions (e.g., TNERC), which control tariffs and debt recovery terms.

Environmental Compliance

The company is inherently ESG-compliant as a renewable energy producer; specific compliance costs are not broken out from general O&M.

Taxation Policy Impact

Current tax liabilities stood at INR 0.18 Cr as of September 30, 2025. Deferred tax liabilities were INR 3.98 Cr.

Legal Contingencies

The company successfully pursued a case with the Tamil Nadu Electricity Regulatory Commission, resulting in the recovery of interest on previously written-off debtors. Total value of other pending litigation is not disclosed.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the volatility of O&M costs (which rose 54% YoY) and the timing of receivable collections from state utilities (Trade Receivables at INR 8.40 Cr).