Guess who is getting hotter this winter? Yes, it is KPI Green Energy! On March 28, 2023, the company hit its 52 Week Low at Rs. 390.00. Since that point, KPI Green Energy has demonstrated exceptional performance, staging a remarkable comeback and achieving its 52 Week High of Rs. 1,413.90 on December 13, 2023. The growth during this period stands at an impressive approximately 262.82% turning up the heat in style! 🔥But what does the future hold for the company? Let’s learn it in KPI Green Energy Fundamental Analysis.
As we know that recently, the 28th Conference of Parties (COP-28), Year’s Biggest Climate Conference unfolded its chapters in the vibrant city of Dubai, UAE. Led by the visionary Prime Minister Shri Narendra Modi, India showcased an unwavering commitment to combatting climate change. The spotlight? India’s commitment to greening its economy, particularly through supporting Micro, Small & Medium Enterprises (MSMEs) in the Renewable Energy sector- Reports As per the website of static.pib.gov.in. IREDA highlights this commitment, emphasizing India’s dual focus on economic growth and environmental sustainability. Join us as we explore KPI Green Energy Fundamental Analysis—glimpse into India’s strategy for a cleaner, greener future that marries economic prowess with environmental responsibility.
About the company-KPI Green Energy Fundamental Analysis
The company operates as a solar power generator with a focus on delivering solar power both as an Independent Power Producer (‘IPP’) under the brand name ‘Solarism’ and as a service provider to Captive Power Producer (‘CPP’) customers. Currently, the company boasts an installed capacity of 100 MW of solar power under the IPP segment and 100 MW+ in EPC/CPP projects.
As part of its expansion efforts, the company augmented its solar power generation capacity by initiating a new project for 25 MW at Sudi, Samiyala & Tanchha village, Amod, Bharuch, Gujarat. The estimated cost of this project was Rs. 13,203.76 Lakh, and it was scheduled for commercial commencement in July 2019. By the year 2023, the company successfully commissioned 26.10 MW first IPP Hybrid Project. Also, it achieved the milestone of 300+MW of cumulative capacity energised (IPP+CPP) in the same year.
Notably, the company has received the ‘Excellence In Solar Park Award – 2016’ from the Mission Energy Foundation, Mumbai. Additionally, the Promoter has been honored with the ‘Legends of Surat – 2018’ award by Gujarat Mitra, a leading newspaper in Gujarat.
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Upcoming Projects and Future Prospects
The company aims to attain a capacity of 1000 MW by 2025, combining one-time and annuity-based Operational and Maintenance Services (OMS) and Lease income from Captive Power Producer (CPP). The goal includes building a Cumulative portfolio of 750 MW by 2025.
Milestone Achievement: Fresh Orders of 4.20 MW
Taken from the Linkedin profile of SolarQuarter- Asia, Middle East & Africa’s Largest Solar Energy Media Company. In a significant milestone, KPI Green Energy Limited has secured fresh orders totaling 4.20 MW for solar power projects within the ‘Captive Power Producer (CPP)’ segment. This accomplishment propels the cumulative orders for solar power projects in the CPP segment to over 100+ MW. The contracts from three distinct entities, M/s. Maker Filaments (2 MW), M/s. Maker Synthetics (1 MW), and M/s. Savita Synthetics (1.20 MW), further solidify KPI Green Energy’s position in the renewable energy sector.
Noteworthy Expansion: 6.50 MW Orders Received In the CPP Segment
KPI Green Energy celebrates a substantial boost with new orders totaling 6.50 MW for solar projects in the Captive Power Producer (CPP) segment. The cumulative portfolio of solar power projects in the CPP segment now stands impressively at 106+ MW. Contracts from esteemed clients, including M/s. Vasudev Synthetics (2 MW), M/s. Shree Chakradhar Industries (3 MW), and M/s. Shree Chakradhar Synthetics (1.50 MW), underline the company’s commitment to sustainable energy. Anticipated for completion in the upcoming financial year of 2023-24, these projects are strategically phased for efficient delivery, adhering to contractual terms.
Repeat Success: 2.70 MW Aggregate Capacity Secured
In a testament to KPI Green Energy’s consistent success, the company has secured repeat orders for an aggregate capacity of 2.70 MW for solar power projects. With this latest addition, KPI Green Energy’s cumulative orders for solar power projects in the CPP segment have now surpassed an impressive 115+ MW. The recognition of trust through repeat orders highlights the company’s prominence in the industry.
These ongoing successes demonstrate KPI Green Energy’s development trajectory and impact in the renewable energy space while highlighting the company’s dedication to sustainability.
Essentials & Financials- KPI Green Energy Fundamental Analysis
Stock Status
Operating Revenue and Growth: KPI Green Energy records a substantial operating revenue of Rs. 766.04 Cr. over the trailing 12 months, accompanied by an outstanding annual growth of 179%. This impressive surge signifies the company’s ability to generate substantial income.
Market Cap and Stock Status: With a Market Cap of ₹ 5,415 Cr, KPI Green Energy proudly holds the status of a Mid cap stock, underscoring its significant position in the market.
Key Metrics
Profitability Ratios: KPI Green Energy maintains strong profitability, boasting a ROCE (Return on Capital Employed) of 24.7% and an ROE (Return on Equity) of 53.4%. Higher percentages in both these ratios are favorable indicators.
Solid ROCE and ROE metrics indicate the company’s profitability by showcasing effective capital utilisation and substantial returns for shareholders.
Price to Earning Ratio (P/E): The P/E ratio stands at 40.27, showcasing a favorable valuation when compared to its sector’s PE ratio of 59.29. A lower P/E ratio often suggests undervaluation.
Opportunities may present themselves when the P/E ratio is lower, indicating that the stock may be more affordable in relation to its earnings potential.
Earnings Per Share (EPS): KPI Green Energy maintains a TTM (Trailing Twelve Months) EPS of Rs. 37.17 per share, indicating consistency in earnings over the past year.
This positive trend indicates improving financial performance and can attract investors seeking companies with strong and expanding profitability.
Debt to Equity Ratio: The Debt to Equity Ratio stands at 2.02, indicating a higher proportion of debt in the company’s capital structure.
A high Debt to Equity (DE) ratio indicates that a company relies heavily on debt to finance its operations and investments. This may pose higher financial risk due to increased leverage, but it can also suggest that the company is leveraging debt to fund growth opportunities.
Dividend and Yield: KPI Green Energy declares a current year dividend of Rs 2.85, with a yield of 0.22%, providing shareholders with a modest return.
KPI Green Energy Ltd Share Holding Pattern
| Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | |
| Promoter | 51.10% | 51.47% | 52.69% | 54.52% | 54.81% | 54.81% | 54.83% | 53.08% |
| FII | 0.00% | 0.00% | 0.00% | 2.77% | 2.54% | 3.48% | 4.24% | 7.22% |
| DII | 3.25% | 0.00% | 0.00% | 0.00% | 0.00% | 0.06% | 0.00% | 2.25% |
| Public | 45.65% | 48.53% | 47.31% | 42.71% | 42.64% | 41.66% | 40.91% | 37.46% |
The shareholding structure of KPI Green Energy had significant changes in the most recent quarter, which ran from September 2023 to December 2023. These changes provide insights into the dynamics of investor ownership.
Promoter Shareholding: Sep 2023: 54.83%, Dec 2023: 53.08%, % Change: -1.75%
Significance: The decrease in promoter shareholding by 1.75% may suggest a potential reduction in the control of the company by its promoters. Investors frequently keep an eye on shifts in promoter holdings for clues about management confidence and forecasts for the future.
FII (Foreign Institutional Investor) Shareholding: Sep 2023: 4.24%, Dec 2023: 7.22%, % Change: +2.98%
Significance: The substantial increase in FII shareholding by 2.98% reflects growing interest from foreign institutional investors, indicating perceived positive prospects for KPI Green Energy. This may be seen as a vote of confidence in the business’s abilities.
DII (Domestic Institutional Investor) Shareholding: Sep 2023: 0.00%, Dec 2023: 2.25%, % Change: +2.25%
Significance: The emergence of DII with a 2.25% shareholding indicates domestic institutional interest, potentially driven by confidence in the company’s growth and stability. DIIs often include mutual funds, insurance companies, and other financial institutions.
Public Shareholding: Sep 2023: 40.91%, Dec 2023: 37.46%, % Change: -3.45%
Significance: The decrease in public shareholding by 3.45% may suggest a shift in retail investor sentiment or possibly some share buybacks. Since public shareholding changes represent the opinions of individual investors, it is essential to keep an eye on them.
These patterns are important to understand as it shows the company’s evolving ownership landscape.
Highlights Of Earning And Revenue- Annual/Quarterly
Over the past year, there was a remarkable surge in annual revenue, soaring by 179.48% to reach Rs 647.03 Crores. Concurrently, the annual net profit exhibited robust growth, escalating by 153% to Rs 109.63 Crores. Impressively, the stock price witnessed a significant upswing of 206.28%, outperforming its sector by an impressive margin of 155.78%.
Zooming into quarterly performance, there was a noteworthy 34.55% Year-over-Year increase in quarterly revenue, totaling Rs 215.95 Crores. The quarterly net profit also demonstrated solid growth, surging by 64.21% YoY to reach Rs 34.75 Crores.
BOTTOM LINE
Summing up KPI Green Energy Fundamental Analysis, there is an escalating demand for renewable resources, and this has had a positive impact on solar companies in India. This has significantly benefited KPI Green Energy. Key metrics like ROCE, ROE, EPS, and the low PE ratios suggest robust growth. The increase in FII and DII holdings is a sign of institutional investors’ rising confidence. However, the heightened Debt to Equity ratio raises financing concerns.
Nevertheless, the company consistently excels in Annual and quarterly revenue growth, profit CAGR, and stock price CAGR over the past 3 years. While KPI Green Energy displays strengths, especially in performance metrics, fluctuations, notably in the Debt to Equity ratio, merit attention. It is important to be aware of market trends and financial developments in order to assess its future trajectory and stability.
That’s all for today’s post. Hope you get some valuable insights from here.
Happy reading!
Disclaimer
The blog is meant for informational purposes and serves the general analysis of the stocks. Contents provided here are based on careful research and analysis utilizing the fundamental and technical indicators over a period of time. The post does not consist any direct recommendation about Investing or trading in the securities market. Thorough research and careful consideration are necessary for individuals to fulfill their personal responsibility in making financial decisions. Seeking professional advice before making any financial decisions is always advisable.
