SBI Securities has issued a research report recommending buy of KPI Green Energy
Key highlights of the 4QFY25 Result
Growth momentum remains intact
The company during the quarter has reported 96.8%/73.5%/142.0% YoY growth in Revenue/EBITDA/PAT to Rs 569.4 cr/Rs 161.1 cr/ Rs 104.2 cr respectively. The full year FY25 Revenue/EBITDA/PAT grew 69.5%/67.4%/101.2% YoY to Rs 1,735.5 cr/ Rs 563.8 cr/ Rs 325.3 cr respectively.
The full year performance is better than our expectation across all parameters. The growth is led by the strong execution of CPP orders. IPP energy production for FY25 jumped 17% YoY to 249 million units.
Healthy order book; The IPP revenue to pick up going ahead: The current book of the company as of Mar’25 stood at 2,958 MW comprising of 1,202 MW IPP and 1,756 MW CPP orders. The CPP orders are to be executed over the next 12-15 months while new IPP orders to be full executed by FY27. The company is targeting to execute 1.5 GW of IPP project by 1QFY27.
The CPP order value assuming Rs 3.5 cr per MW is estimated to Rs 6,000 cr. We expect the IPP revenue to pick up going ahead as KPI has 503 MW of operational IPP capacity as of Mar’25 which has potential to generate over 800 million units while 1.5 GW can generate 300 cr units annually. The management has set an ambitious target of executing cumulative 10,000 MW of power at group level by 2030.
Strong growth outlook: The company has strong order pipeline and expect healthy inflow by 1HFY26 which will take care of growth till FY27. The annual demand in solar is 40-50 GW thus augur well for growth. The company, in addition to Gujarat, is now expanding its footprints into newer geographies like Maharashtra, Rajasthan, Orissa etc. The management has guided for 50- 60% CAGR growth in revenue over next 2-3 years.
Valuation still attractive; Maintain buy rating- Target Rs 606.0/-
At the current price of Rs 486.0, the stock is currently trading at a P/E of 19.2x/12.5x of its FY26E/FY27E EPS of Rs 25.3/Rs 38.8 respectively. We value the stock at P/E of 24.0x FY26E EPS of Rs 25.3 to arrive at our TP of Rs 606, thus providing an upside potential of 24.8%.