KPI Green Energy Limited — Credit Ratings, 08-01-2025: Credit Rating

KPI Green Energy Limited (KPIGEL) has reaffirmed its long-term credit rating at [ICRA]A with a positive outlook, alongside a short-term rating of [ICRA]A2+ for a total credit facility of ₹2,000 crore. This follows an enhancement in the rated amount, reflecting the company’s stable financial health.

The group’s consolidated financials show robust revenue growth, with a 59% increase to ₹1,024.15 crore in FY2024, compared to ₹643.79 crore in FY2023. For the first half of FY2025, revenue surged 75% year-over-year to ₹707.69 crore, driven by higher execution of captive power plant (CPP) and engineering, procurement, and construction (EPC) orders. The operational profits before depreciation, interest, taxes, and amortization (OPBDITA) for FY2024 stood at ₹337.10 crore, reflecting a 62% increase from FY2023.

Net profit for FY2024 reached ₹162 crore, a year-over-year rise from ₹110 crore in FY2023, resulting in an earnings per share (EPS) of approximately ₹1.41. This growth in profitability is attributed to improved operational efficiency and strong demand in renewable energy projects.

Operational costs have been managed effectively, allowing for a slight increase in the operating profit margin to 32.9% in FY2024 from 32.4% in FY2023. However, working capital intensity has risen significantly, with a net working capital-to-operating income ratio increasing to 46% in FY2024.

The company’s balance sheet remains strong, with total outside liabilities to tangible net worth reducing to 1.9 times in FY2024 from 3.9 times in FY2023, indicating improved capital structure following a ₹1,000 crore fund raise via qualified institutional placement.

The strategic outlook remains positive, supported by a substantial order book exceeding ₹3,279 crore and long-term power purchase agreements (PPAs) with reputable counters. The investor sentiment appears favorable, suggesting a 'buy' position given the continued growth trajectory, effective cost management, and expansion opportunities in the renewable energy sector.