💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) grew by 98% in FY25 to INR 926.57 Cr from INR 469.50 Cr in FY24, driven primarily by higher EPC income. H1 FY26 revenue from operations reached INR 520 Cr, a 60% increase compared to INR 326 Cr in H1 FY25, while Q2 FY26 revenue grew 51% YoY to INR 301 Cr.

Geographic Revenue Split

100% of the current order book is concentrated in Gujarat. While this exposes the company to state-specific policy risks, it leverages Gujarat's position as the state with the second-highest installed wind capacity in India and financially healthy discoms.

Profitability Margins

PAT margin was 12.10% in FY25, a slight decline from 12.49% in FY24 due to higher interest costs of INR 18 Cr in H1 FY26 (up from INR 13 Cr). Q1 FY26 PAT margin stood at 11.65%. Margins are expected to improve as the IPP portfolio grows beyond the current 48.5 MW, benefiting from large-scale O&M efficiencies.

EBITDA Margin

PBILDT margin improved to 18.86% in FY25 from 18.16% in FY24. H1 FY26 EBITDA reached INR 118 Cr (up 59% YoY) with a margin of approximately 22.7%. Q1 FY26 PBILDT margin was 22.19%, driven by operational efficiencies and the use of in-house equipment like large cranes which reduce fixed mobilization costs.

Capital Expenditure

Fixed assets increased by 157% YoY to INR 514 Cr in H1 FY26 from INR 200 Cr in H1 FY25, reflecting significant investment in wind IPP projects and infrastructure. The company has repayment obligations of INR 25.32 Cr in FY26 and INR 23.46 Cr in FY27.

Credit Rating & Borrowing

CARE Ratings reaffirmed 'CARE A-; Stable' for long-term bank facilities of INR 513.01 Cr and 'CARE A2+' for short-term facilities of INR 150.00 Cr. Interest costs rose 39% YoY in H1 FY26 to INR 18 Cr due to term loans availed for wind IPP projects.

⚙️ Operational Drivers

Raw Materials

Structural steel requirements and renewable infrastructure solutions represent the primary material costs. The company saw a slight decline in the cost of material consumed in FY25 due to better sourcing and increased sales volume.

Import Sources

Sourced primarily from within Gujarat, specifically through group company linkages to ensure supply chain stability for EPC projects.

Key Suppliers

KP Green Engineering Limited (KPIGEL) is the primary supplier for structural requirements, creating strong operational linkages within the KP Group.

Capacity Expansion

The company holds an order book of 2.1 GW as of June 30, 2025, which is 3.33x the FY25 TOI. The IPP segment currently operates 48.5 MW with plans to scale this portfolio to improve long-term margins.

Raw Material Costs

Total operating expenses for H1 FY26 were INR 406 Cr, up 54% YoY from INR 263 Cr, tracking the 60% revenue growth. Procurement is streamlined through group entities to mitigate price volatility in steel and components.

Manufacturing Efficiency

Operational efficiency is driven by 'large-scale benefits' where mobilizing for larger megawatt orders from a single entity reduces fixed costs per unit of power capacity installed.

Logistics & Distribution

Distribution costs are managed by focusing on geographically clustered sites in Gujarat, which minimizes the movement of heavy equipment like cranes and turbines.

📈 Strategic Growth

Expected Growth Rate

50-60%

Growth Strategy

The company plans to achieve this CAGR through the execution of its INR 3,086 Cr order book over the next three years. Strategy includes diversifying into offshore wind, expanding IPP capacity to capture higher margins, and entering new state markets like Maharashtra, Madhya Pradesh, and Rajasthan via signed MOUs.

Products & Services

Wind, solar, and hybrid Engineering, Procurement, Construction and Commissioning (EPCC) services; Independent Power Producer (IPP) electricity sales; Operations and Maintenance (O&M) services; and wind resource assessment.

Brand Portfolio

KP Energy, KP Group

New Products/Services

Expansion into offshore wind projects and hybrid (solar-wind) power solutions are the primary new growth avenues expected to contribute to the 50-60% growth guidance.

Market Expansion

Targeting Maharashtra, Madhya Pradesh, and Rajasthan to reduce the current 100% revenue dependency on Gujarat.

Market Share & Ranking

Not disclosed as a specific percentage, but identified as a leading player in the Gujarat wind infrastructure sector with a 2.1 GW pipeline.

Strategic Alliances

Strong internal JVs with KP Green Engineering Limited and KPI Green Energy Limited for project sourcing and infrastructure supply.

🌍 External Factors

Industry Trends

The renewable industry is growing rapidly but remains fragmented and competitive. The shift toward hybrid (wind-solar) projects and offshore wind represents the next technology frontier where KPEL is positioning itself.

Competitive Landscape

Operates in a fragmented industry with competition from both large national EPC players and specialized renewable energy firms.

Competitive Moat

Moat is built on 'backward integration' for infrastructure solutions and owning critical execution assets (cranes). This is sustainable because it allows for lower bid costs compared to competitors who must rent equipment.

Macro Economic Sensitivity

Highly sensitive to interest rate volatility as seen in the FY25 PAT margin compression following increased debt for IPP projects.

Consumer Behavior

Increasing demand from Corporate IPPs and Captive Power Producers (CPPs) for green energy to meet ESG goals is driving the 3.33x order book-to-sales ratio.

Geopolitical Risks

Minimal direct exposure as operations are domestic, but global supply chain disruptions in wind turbine components could delay project commissioning.

⚖️ Regulatory & Governance

Industry Regulations

Subject to Gujarat state policies on wind-solar hybrids, land ceiling acts for project sites, and GEDA (Gujarat Energy Development Agency) regulations.

Environmental Compliance

As a renewable energy company, it benefits from carbon credit potential and green energy incentives, though specific compliance costs are not disclosed.

Taxation Policy Impact

Effective tax rate is not explicitly stated, but PBT to PAT conversion in H1 FY26 (INR 89 Cr to INR 61 Cr) suggests a standard corporate tax profile of approx 31%.

⚠️ Risk Analysis

Key Uncertainties

Execution risk of the INR 3,086 Cr order book within the 3-year timeline; potential for 10-20% margin volatility if material costs for steel rise sharply.

Geographic Concentration Risk

100% of revenue and order book is currently tied to Gujarat, creating a high-impact risk from regional regulatory shifts.

Third Party Dependencies

74% revenue dependency on group entity KPIGEL for order flow, making KPEL's growth contingent on the group's overall financial health.

Technology Obsolescence Risk

Risk of wind turbine technology shifts; mitigated by the company's focus on EPCC and infrastructure rather than turbine manufacturing.

Credit & Counterparty Risk

Receivables quality is supported by a client base of reputed firms like NTPC and Aditya Birla, and management confirms funding for group orders is already secured.