KPI Green Energy Limited (KPIGREEN.BO) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the KP (sic) [ KPI ] Green Energy Limited Q2 FY '26 Earnings Conference Call, hosted by Share India Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Patel from Share India Securities. Thank you. And over to you, sir.

Thank you, and good afternoon, everyone. I would like to congratulate KPI Green on very good set of numbers. On behalf of Share India Securities, I welcome you all on Q2 FY '26 Earnings Conference Call of KPI Green Energy. We are pleased to have with us the management team represented by Mr. Sohil Dabhoya, the Whole-Time Director; Dr. Alok Das, Group CEO; and Mr. Salim Yahoo, Chief Financial Officer of the company. We will have the opening remarks from the management, followed by question-and-answer session. Thank you. And over to you, Siddharth.

Thank you, Harsh. Good afternoon, everyone. This is Siddharth Thakur from the Chairman's office. A very warm welcome to all of you, and thanks for joining the KPI Green Energy conference call today. It's been a successful quarter for KPI, marked by strong order intake, key MOUs and continued expansion across new geographies. The company has also made headway into emerging sectors such as data centers, AI and life sciences, while exploring new and innovative financing options to support its growth journey. To elaborate on this more, I'll now hand over the mic to Mr. Salim Yahoo, Chief Financial Officer. Sir, over to you.

Thank you, Siddharth. Good afternoon, everyone. I'm Salim Yahoo, Chief Financial Officer of KPI Green Energy Limited. And it is my pleasure to present the financial and operational highlights for the second quarter and the first half of FY '25-'26. In this quarter, we have once again delivered a remarkable performance, achieving our sixth consecutive quarter of record revenue and profitability. This consistent upward trajectory underscores the robustness of our business model and our focused execution strategy. For quarter 2 FY '25-'26, our total revenue stood at INR 641.1 crores, a strong 78% year-on-year growth compared to INR 361.4 crores in quarter 2 FY '24-'25. Our earnings before interest tax depreciation, that is EBITDA increased by 73%, reaching INR 232.4 crores and profit before tax rose 63.4% to INR 158 crores. Our profit after tax grew 67% year-on-year to INR 117 crores, reflecting disciplined cost control and operating leverage. For the first half of FY '25-'26, we reported total revenue of INR 1,255.26 crores, a 76.5% growth from the same period last year. EBITDA stood at INR 449.3 crores, up 68%, while PBT and PAT grew by 63.9% and 67.7%, respectively. These results demonstrate our continued ability to scale profitability while maintaining healthy margins. Our strong financial performance has been supported by strategic financing initiatives. During the first half, we successfully issued India's first externally credit-enhanced green bond of INR 670 crores backed by a 65% guarantee by GuarantCo. This is a partial guarantee. Our bonds were rated AA+(CE) by CRISIL and ICRA, 2 of the top most rating agencies, and these bonds were listed on NSE. This landmark issuance reinforces investor confidence and enhance our capital structure. We also achieved a major milestone with the INR 3,200 crores term loan sanction from State Bank of India Project Finance Unit, supporting development of our 250-megawatt solar and 370-megawatt hybrid project under the long-term GUVNL PPA. This financing aligns perfectly with our focus on large-scale annuity-backed IPP growth. Operationally, our execution remains on track across all major projects. The 250-megawatt solar and 370-megawatt hybrid projects are progressing as per schedule, with part commissioning expected in the coming quarters. Together with 150-megawatt wind projects, these represent nearly INR 5,500 crores in CapEx and which will post-commissioning, contribute significantly to our revenue and cash flows in the upcoming financial years. On the CPP side, our order book continues to strengthen with multiple project wins, including 200-megawatt solar with SJVN, 96-megawatt BoS for Aditya Birla Renewables and 100-megawatt repeat order from Avichal Power. Additionally, our recently obtained Category A Power Trading License position us to capture new opportunities in the open-access and energy trading space. From a strategic point, we are expanding into future-ready technologies also. We have signed MOUs with Delta Electronics India for collaboration with battery energy storage system, green hydrogen and EV charging infrastructure, as well as green ammonia JV with AHES Korea and GH2 Solar India, reinforcing our long-term commitment to sustainability-driven growth. Looking ahead, our focus remains unwavering on executing our pipeline efficiently, maintaining financial discipline and delivering consistent return to our stakeholders. With record revenue, robust profitability and strong financing support, we are well on track to achieve our near-term growth targets and our long-term vision of reaching 10 gigawatts by 2030. So, thank you for your continued trust and confidence in KPI Green Energy Limited. So, we now open our floor for the questions.

[Operator Instructions] The first question is from the line of [ Rajat Gupta ], an individual investor.

I have 2 questions from the management. First is that our EBITDA is -- EBITDA margin is continuously squeezing despite the IPP portion expansion. Perhaps this is due to higher borrowing. So, my question is, is it part of the strategy or is the efficiency lapse?

And second question? What is the second question?

Yes. The second question pertains to the company's revenue and scale. I'm sure it is expanding, but the shareholders' wealth is not aligning with its growth. It's hiking for sure, but it seems the EPS growth is not aligning with the company's growth due to higher equity dilution or maybe something else. So, can you guide us, put some colors on the future trajectory on the same as well?

Thank you very much. So Rajat, so your first question was on the EBITDA squeezing. I seem to don't understand. I mean, EBITDA last year, if you see the half year, that is 39.24%, right? It was 37.52%. This time it is 35.79%. So, there is not a too much difference. There might be a slight difference because of the nature of sales booking that happens. Sometimes sales booking happens most on the supply, sometimes it happens on the service component. So, whenever it is a service component, automatically, the margin a little bit -- you will have a variation of 1% or 2%. But if you look at a standalone basis, on a standalone basis, if you look at KPI, okay, last year, EBITDA was around 28.34%, right, half year. And this half year, it is around 36.95%. There is a substantial increase again in the EBITDA. It has matched up with that. So, I don't see any squeeze in the EBITDA, so for that. Second...

This is despite the IPP portion.

Yes. See, IPP portion will further enhance. So, we have energized 250-megawatt and 50-megawatt IPP portion. The revenue of that is yet to come. So once that revenue starts coming in because we have energized that, but it will take time for them. These 2 quarters, you will see it is a rainy season and the rainy season got elongated. So, that's why the power sale also was lower during this 2 quarters with the existing. But the new plant, which are now energized will take time to start. So in the second half of the year, we will see substantial growth in the power sale also. And that will automatically further improve the EBITDA. But EBITDA is not squeezing to that extent that we have to be worried about, okay?

Okay. Second question?

Second question about the market price. You are more focusing on the market price, why the market -- shareholders' wealth has not increased, okay?

No, no. It's not about the market price. It was concerned about the EPS growth.

So, EPS has improved. I mean, if you see, EPS has improved. It is not that EPS has not able -- if you look at what was there earlier in the previous quarter also, if you see, it was INR 3.6. This basic EPS was INR 3.6, which is up to INR 4.82 in this quarter. Similarly, if you see half year, last half year, INR 4.84 was the EPS. And this half year, it is INR 8.49, the basic EPS. So EPS, has improved. Whereas the share price is concerned, I mean, again, market dynamics depend -- a lot of other dynamics in the international geopolitical conditions, the other factors, regulatory factors, the availability of the material and everything. But you need to understand that we are a developer. We are not a manufacturer of panels or anything. So, any other international factors like tariff or anything doesn't affect us. In fact, if there is a price war because of tariffs and everything, we are at a benefit to getting panels and all the material at a lower price. So be assured that because of the market conditions, the prices might be at a stagnant -- you look at it at stagnant. But believe me, once the market improves, I mean, the market scenario improves, the results are already giving a good strength. So if you see the results have always been very good. So it will automatically jump up once the market -- outside conditions, geopolitical conditions, everything improves, everything will be final.

Sir, perhaps my second question was not clear enough. My question was not regarding the market price in the share market. My second question was -- pertains to the shareholders' wealth in terms of the EPS that the company is generating. The company is diluting -- sorry?

Yes. Go ahead. Go ahead.

The company is continuously diluting the equity and using borrowed funds also for attaining the growth as I can understand. So, I wish to know the future course of action where it sources funds from because we are already at the limit of 40% of promoter wealth that is already pledged. So, what shall be the future source of funds?

Rajat, there is one thing you have to understand that one is that we have not diluted any equity in the last 1 year after our QIP of INR 1,000 crores. After that, there is no dilution after that done, okay? Promoter is at present 48%, okay? And you need to also understand, we are into a business where we have a capital-intensive business, where we have IPP, where we have to setup to get annuity income. The company will grow once it gets annuity income. And for annuity income, you have to add CapEx. So, we are adding more and more CapEx because that is a 25-year income, annuity income. So if you see the returns that you will get in this 25 years, once these loans and everything at all, will be huge. So from that point of view, we cannot say stagnant. We have to keep on growing. And for the growth, we are also doing the CPP as well as IPP. So, we are adding both the sides. And as far as what you are saying that borrowed, today also, my debt equity is still at a very comfortable position compared to any other players in the industry. We are still in very good positions where we are -- I mean, we have already told that many times that we will always try to keep it below 2 debt to equity. So, borrowed funds will be there, but it will be -- we will keep a watch, a close watch on it, and we'll not let it go too high. Also, we will be -- upcoming years, we'll see that there will be a different kind of funding, which will -- not more of a borrowed fund, different kind of way, which we will shortly let you know once we start working on that alone, okay?

[Operator Instructions] The next question is from the line of Garvit Goyal from Nvest Analytics Advisors.

Congrats for a good execution in the quarter. My question is on the recent news that is in circulation regarding the government has directed the renewable energy implementation agencies to close all the legacy bids and cancel the letter of awards for all the renewable energy projects for which the power purchase and power sale agreements are not feasible and the deadline is November '25. So, I just want to understand like you spend a few minutes on that, like what is this all about? And how is it going to change the future of the CapEx happening in the solar industry? And how is it ultimately going to affect the future order inflows to KPI Green in that matter? So, that's my first question.

Yes. So if you see that government has clearly given a notification that they have to close which are not viable, projects which are not viable at a very low rate. So, nobody participates there. So whatever KPI has participated, it always has got the best rate. If you see the last one which we closed with government is the GUVNL project, our wind one, we have a rate of INR 3.64. So, that is one of the best rate in the industry. So, we have closed that PPA also. We have signed recently, and we have closed that. We were working on the -- started working on the execution of that project. So as far as KPI is concerned, none of our projects are stuck in any of those -- what we say is the government notification and anything. Industry concern, I mean, yes, because these projects are lingering and there was not too much acceptance from the market, from the developers, that's why these projects had closed. They will -- I presume that they will come up. I mean, see, the target is there that we have to achieve set gigawatt by our Honorable Prime Minister Narendra Modiji. So we have -- it will come up in a new form. It will come up with a new pricing and everything because those which were floated, which were not viable, so those are going to get scrapped, but the new one will come. So, I don't think any industry will have any impact because of the target. Whereas the KPI is concerned, KPI has 0 impact because we have already closed all our IPPs.

Understood, sir. And secondly, on the grid expansion thing, so we are seeing like CapEx is happening tremendously at a good pace in the solar expansion. But is the grid infrastructure or the transmission infrastructure is ready to cater to that kind of solar energy CapEx happening in India? So what's your take on that, like?

See, first, I'll speak about our company, KPI. So KPI, as you have seen in our presentation also, we have evacuation approvals of approximately 3.46 gigawatt in KPI itself, which is far more enough for us to cater for our upcoming projects and everything. Industry is concerned, yes, I mean, government has focused and government will start enhancing the evacuation infrastructure. And they will -- because they know that without the evacuation structure, the increase in the projects or the renewable energy project it's not logical. So, they have started working on it. There are lot of things. Shortly, you'll see, there will be projects on the transmission lines and everything, which will also come. So as far as KPI is concerned, I don't think any impact on us because we have enough evacuation to carry on for the upcoming projects, whereas government will surely add up more and more transmission projects in the upcoming years. That is what we feel.

Just to add, Salim, on to that -- just to add on the selling point, I want to add it here. I'm Dr. Alok speaking. Basically, what happened -- your question is very pertinent. Now, all the transmission companies from the central level and state level, they know that green corridor is required for the huge transmission because we have got the 500 gigawatts to be evacuated for 2030. For that, there are so many TBCB tenders out for the power transmission and all the states are working through that. As far as our all projects pertaining to Gujarat, there is a sufficient load flow study and transmission permission. So we are not affected.

Understood. And one last -- just one last question. Last question is mainly on the pledge price. So, we have been talking about it since last 2, 3 quarters, like we will be doing our measures to reduce the pledge percentage. So, what is the update right now, sir? And why the delay is happening?

No, sorry, I'm not getting your question. I mean, there's a lot of disturbance happening. You are asking about what price?

I'm asking about the pledge percentage, promoter pledge percentage.

Pledge percentage, okay? Pledge percentage, see, let me update you and all who are -- who have this pledge question. So recently, we have got our sanction from SBI. So, our pledge was with SBI. So, we have clearly recommended them. And in our current sanction, we have got an approval that by the end of this execution of this project, COD. After that, within 6 months, that is we look at around March '27, the entire pledge will be released by State Bank of India. So, we have that in written in the sanction letter, and we have also factored that.

So are we going to publish this written in sanction on the exchange?

Yes, yes, yes. Yes, yes. Once we release, we'll also publish. Sanction letter is already -- I mean, we cannot -- because it's what we say, confidential document between the bank and us, we cannot publish the sanction letter. But as I'm saying that in the public domain, we have that in hand.

[Operator Instructions] The next question is from the line of [ Sashank Jha ] an Individual Investor.

Yes, sir, one just request. It's for actually KPIG. Please do a con call. Actually, 6 months already like -- I have not received any update on that, sir.

Yes, it is actually -- it is on 14th of November. Shortly, we'll be uploading that also. We will do con call for each and every of our listed company, okay?

Yes. Actually, you post result of 6 months, so requested to do a con call.

Yes. We will do.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]. Sir, this is a new sector and segment. MOU [Foreign Language], there are various discussions which happen. So initial stage is the MoU. Once you have a tie-up with them, there is a clear path. Now, both the partners will discuss on how to go about it and forward and what is the investment that is required and all those factors will come into picture. So as you go forward, you will get it because this is a new segment altogether. It is not one like solar, which is already in place, the technology is in place here. It is always -- the technology is evolving, the pricing is evolving. So, all these factors have to be taken into consideration. And then step by step, we will move ahead with it.

[Foreign Language]

[Foreign Language]. Green hydrogen, we will be blending with our existing entity. [Foreign Language]. So that is in place. [Foreign Language] As well as the other things are concerned, I mean, it will still take time. I think a couple of years it will take, slowly, slowly, it will gradually take a shape.

[Foreign Language]

[Foreign Language] Then you will see, total will have around [ 3.5] gigawatt of IPP. So according to that, our IPP revenue itself will be more than INR 1,000 crores with an EBIT of INR 90 crores. So, you can understand that the growth that is going and coming forward.

The next question is from the line of [ Anil ] from [ K16 Advisors ].

Congratulations on this financial closure. It's not easy since you don't have an industrial house behind you. So to get a public listing of the bonds and to get such a big loan from SBI, I think rich congratulations are due for whatever you have done.

Thank you, Anil.

My question is that we are very quick to implement our projects. That is our trademark that we can do very quickly. But then if we have to wait for 6 months for the revenue to come, then what is the purpose of doing it quickly? Like this -- we went from 170 megawatt to 535 megawatt own, that is IPP. And yet we are not seeing the revenue. Why such a big delay, 6 months delay?

I will answer it. So, out of this additional IPP, which we energized, one was 250-megawatt Khavda project. In Khavda project, we have completed our revenue. But what happened was the evacuation was in the scope of the government. Now, that evacuation GS, as we call it, government substation was not ready, and it is still taking time. So as per the PPA that we have completed ahead, but government has time. So, government is taking time in what we say, setting up the evacuation substation. So shortly, they have already -- I think we expect that to cover by fortnight of December itself, the substation. So automatically, the revenue starts. So it was not at our end. This was one-off a case where government was delayed because of the project. Whereas the 50 megawatts we did, we already started getting the revenue. What happens once we infuse the power after -- I think, September, I think we started infusing the power during the September. And after that, it takes 2 months to get the billing revenue into the picture because what happens, if I supply it in the month of September, the billing will happen in the October or November. After that, the billing, the payment will come. So the revenue and everything will take time. But now, I think in this second half, we will start getting for this 250 also and for 50-megawatt additions, which we have added. Whereas the new project that we are doing 1.2 gigawatt GUVNL, there, we will be setting up 25 megawatt and we'll start energizing and we'll start getting revenue by the time I'm starting up another 25, 25, 25 kind of a bunch. So there, you will see faster revenue incoming.

Great. You have already answered the question, which I was going to ask. But one last thing. You have mentioned -- no, no, just -- I just want to complete this. You've mentioned Vanguard, ADIA, Citadel, BlackRock, et cetera. These are very large global names, but none of them are showing up in screener when I see. That means their ownership is less than 1%. Why would such large institutions take less than 1% stake in a company, which is barely $1.2 billion market cap?

Right. Vanguard has got more than 1%, but with different names, Vanguard Investment Fund, Vanguard [ Fortnightly ] Fund, Vanguard. So similarly, BlackRock has also, similarly Abu Dhabi Investment Pension Fund, all have got a bit different. So, what happens when if it's calculated at the screener, it will show you only that they are below 1. But if you look -- because we look at the Benpos, so we are aware that they -- altogether, they are one. so they don't put it from one fund. they put from different, different funds. so, that is what you are not able to see the entire, but they are there in the Benpos.

Okay. So -- but all said -- all put together, it is 9% only. So with so many large institutions, I mean, for them, it could have been much higher. But obviously, I mean, it will happen, but it will happen...

Yes. Just a minute, if you see on the screener also, I just opened the screener also, you will find Aspire Emerging Fund, you'll find Morgan Stanley, they are showing. They are more than 1%. Okoworld Klima was there. So, all these are -- the government pension fund globally is 1.7% as on September 25. So it is also showing there on the screener. So they are there, whereas Vanguard is not shown because as I told, there are multiple funds of Vanguard through which they invest.

The next question is from the line of [ Sudhir Bheda ] from [ Bheda Family Office ]

Hearty congratulations to entire KPI team for outstanding results.

Thank you.

Sir, there is a common worry in the investors' mind about the overall prospect of renewable energy with respect to evacuation grid stability. And government also now thinking, there are a lot of press releases in the last 3, 4 days that government wants to scrap certain projects. There are 42 projects are lying without PPA. So, can you just throw some light on it for the entire sector, what's the position and how we should look forward for the growth of that renewable sector, solar and wind in particular?

Yes. Sudhirji, so basically, if you look at our company, our company has got a strong IPP portfolio and all these PPAs are signed. We are into execution mode. So, we don't have to worry about this. So once we have 1.5 years, as I told you, the IPP revenue itself will be more than INR 1,000 crores with a 90% of EBITDA. So, our company doesn't have to worry on the canceling PPAs or the news that which are going around. But as I told earlier in my question that these PPAs are projects which were not viable. Now once again, they will come back because the government focus is already there on the net zero and capacity gigawatt increase to 500 gigawatts. So, all these factors are already playing in. But the only thing is that the project, which were not viable, government is canceling and they will come up with a new pricing or new, what we say, strategy for floating out of the project. But as far as KPI is concerned, we have already cleared all our projects on the IPP side. And CPP, we don't have to worry because we have already have a...

Great. But see, the worry is not on the pricing or retendering. They are saying that too much of solar power is causing grid instability in this time. So, that's why they want to curtail. So if you can throw some light on that as well?

Yes. So as far as our company is concerned, it automatically, we have signed a long-term PPA with the DISCOM. And DISCOM also is GUVNL, which is one of the best DISCOM in the entire country. So, we don't have to worry about that because we will generate the power. DISCOM is liable to take that power. So, our revenue will not impact, and that is the best strategy, which Faruk sir has taken that always go with a bigger DISCOM, always go with an IPP mix with a CPP. So, we are very much safeguarded with any of this volatility in the market. But as far as sector itself is concerned, I don't think -- because there was also worry about too much of panel manufacturing capacity in place and everything. But I don't see that there is a market for everybody at this stage also, and the sector is expected to grow. It does not have any -- I don't see any...

So, grid instability and all is not going to cause any problem for solar at least?

No, I don't think so. Because as Faruk sir -- even Alok sir said that...

Salim, I will tell you. Salim, I have to pitch in here. That the question is grid -- there are 2 questions. One is about grid stability. Another some of the PPA cancel and all. Now if you see these business is coming pan-India basis, there are 2 kind of grids available. One is central grid and other is state grid. Now on the central grid, whatever they are giving the permission, so there are projects happening in the particular state. And now company like in the government has come 2 types of measurement that whatever your smart grid that you have to -- whatever the generation and draw of the power from the grid should be for the demand and supply. For that, government has come with the DSM mechanism, that is a deviation settlement mechanism. If you are a generator and consumption, then the power grid stability and all, so it has come to the central level, stringent norms and that is being followed. So whatever your future projects would be coming, that is to be followed. Some of the curtailments are happening in the country like in Rajasthan and all. But in Gujarat and all, there is curtailment because what Salim was selling because in the load flow study and that Gujarat transmission company, they are doing very nicely that all sort of design calculation and all, and there is no such curtailment at least that whatever project we are doing. So now the central, whatever the norms they are coming with the grid stability and prior to grid synchronization, they are giving that smart grid all sort of mechanism that whatever the parameters to be maintained for the load flow. So, these are the things that are coming. So in that way, all power companies, power transmission companies, they are coming on the smart grid application at the beginning of the grid charges. So, I don't think there is any challenges in the future looking at the 500 gigawatt for the grid penetration. So, all the developers are giving instruction right from NLDC or State Load Dispatch Center, everybody. So, your concern is okay, but it is being mitigated a lot and all ways that the government places are working.

Sudhirji, Siddharth here. I would just like to add one more point. Regarding your concern for solar, right, we have a very effective strategy where we also have expertise in wind and BESS-based solutions. And we are also -- in the future, we'll be exploring channels through trading. So net-net, the kind of solutions that we offer are not just solar, but we couple solar with BESS and with wind to provide a -- to provide both RTC and FDRE-based solutions and solutions that will ensure that the grid remains stable, and we are working with the government on that. So, we are curating a strategy around that, and we are one of the best players that offer all of these multiple strategies.

The next question is from the line of [ Aditya Pandya ] from [ Polycap Family Office ].

Yes. My question was related to one of your subsidiaries, Sun Drops Energia. So, can you help me with the quarter 2 numbers?

So quarter 2, we have done INR 125-odd crores top line with a similar kind of profitability. And we expect that since both the quarters, I mean, quarter 1 and quarter 2, more of a seasonality, rainy season, it was at a lower level. But the next half, you will have -- you'll see substantial growth in the Sun Drops top line in the coming second half.

Okay. Any target for the revenue for that one?

We are planning. I mean, we are looking at around 65% to 70% more than what we have done in the first half.

Got it. Got it. And sir, I missed the PAT numbers earlier. Can you just reiterate that?

Sorry?

I missed the PAT numbers earlier, the PAT numbers.

PAT is on a similar range of 16% to 18% kind of a PAT.

Okay. Got it. Got it. And when are we trying to list this?

Sorry, your voice is cracking, Aditya. I was not able to -- it is not clear.

I'm repeating myself. When are we trying to list this company?

List this company? Most probably next financial year, we'll be planning the listing.

The next question is from the line of [ Akhilesh Kumar ], an Individual Investor.

I want to know about the order and sub-ordering with the -- means the KP Energy and KPG. Say, for example, we have given an order of 1.2 gigawatt, which we have subcontracted to KP Energy. And I think in earlier calls, it was told that it is something around INR 3,000 crores or more. So, now KP Energy will be paying 2% royalty on this order when it gets converted to revenue, right? And KPI Green will be paying 2% royalty again for the same order for the life when revenue start coming?

No, no, no. See, this is an execution order, right? For KPI, there is no revenue till the business starts, okay? Now once we -- that EPC order will be given to KP Energy. So, only KP Energy will have the revenue. So it is not a double booking of the revenue. It is only [ IPP ] to KP Energy.

EPC contract -- okay. Once KP Energy executes that order, so that INR 3,000 crores or whatever the EPC value is there, 2% royalty is paid from KP Energy, right?

Yes, that is for the order of execution.

Correct. I got it. So the one order, once royalty has been paid by KP Energy. Now coming to KPI Wind.

For the execution of the order. Let me be clear on it. That is for the execution of the order. And what you are talking later on, when the revenue starts generating for that particular plant, so it is a nominal. It is -- what we see that it will clear approximately, if you have 1.2, it will clear INR 1,000 crores of top line. So, that is the revenue that is generated year-on-year. That is an annuity income it will generate.

I got it. So, KP Green will be getting the annuity income for the next 25 years for the same project, right, same order and 2% royalty will be coming?

No, no, no, no. See, you need to understand there is one EPC contract, which is given to KP Energy. That EPC contract is of whatever amount, INR 3,000 crores odd, that is given to KP Energy. KP Energy is executing that, and that is its business of executing the order because it's a wind, so hybrid also. So it is executing the entire order over there. The panels are purchased directly by KPI. It is not part of the order also. So, what exactly KP Energy is getting is at least you can say 60% of the total order. That is what KP Energy is going to get. And out of that business, which it is doing -- execution which it is doing, which is usually business of execution, EPC. So from that, it is giving the revenue. And that revenue as per the approval and as per the SEBI guidelines, we are giving 2% royalty. Now after that project is executed and after that, when that particular plant will start generating revenue, on that revenue, it is the 2% or something which KPI will be paying because that is the revenue of KPI. So it is not a -- you cannot call it as a duplication because these are 2 different ways of looking at it. If I'm generating -- so for example, till now KPI has executed 500 megawatt. Now 500 megawatt, whatever revenue comes in, it is giving a royalty on that only.

Okay. I got it. And how much, IPP, we have 170 or 1.8 gigawatts, how much we have subcontracted to our different group companies? Like say, most of...

Right now, as I told you, we have only given the execution since it is a hybrid project also. So, we have given execution portion, that is the BOP and the wind because the windmill and everything, KP Energy's expertise in that. Whereas the panel and everything, we are purchasing directly from. So, we are not offloading the panel. So, you can see that we have clearly kept panel out of the scope of KP Energy because that is our expertise, KPI. KPI is into more into solar. So they have executed the panel, which is around the major portion of the contract, which is not into their portfolio.

Okay. And KPIGEL also, we give orders, right? 30% of those Orders?

No, no. What KP Energy gives to KPIGEL for execution, for example, the MMS structure and everything, those particular sales are not taken part of the calculation of the revenue for royalty. So, that is kept aside because it has already taken in KP Energy, so we are not giving it in KP Green Engineering.

The next question is from the line of [ Gaurav Sharma ] from [ Anuja Properties ].

Congratulations on an excellent set of results. I have a couple of questions for Salim sir. As per last year's con call with you, sir, in Q2 FY '25, 1.1 gigawatt of CPP orders were supposed to be executed by September '26. But out of that, only 224 megawatts has been executed. Can you please explain the reason for delay?

No, no. See, there is not a delay. If you look at CPP execution, we count the megawatt only when we complete the entire order. So there are orders, which we have completed 70%, 80%, but megawatt has not been counted into. Like MAHAGENCO, we have executed majority of the orders. CIL, we have executed majority of the orders. We have executed other majority. So once we complete the COD, then only we added. So if you compare the top line or anything or we only take once we complete the entire order. So, that's why you'll see that variation in that.

Got it. Got it. Also one more question. The entire 2.41 gigawatts of order book...

Sorry to interrupt, sir. I just request you to rejoin the queue for the follow-up. The next question is from the line of [ Sahil Shah ], an Individual Investor.

Congratulations for outstanding numbers. You guys are doing so good. So, my concern is I have been an investor in KPI since quite long now. Sir, despite strong performance, a solid order book and an extremely positive commentary from management every time, the stock has severely underperformed lately, which is quite concerning, at least for me. How does management view this disconnect and what's being done to restore investor confidence?

See, one important thing that when we are working, we are focusing on our execution. We are focusing on our financial strength and everything. So, we are getting 100% or more than 100% in this factor, which is clearly visible in our results also. Now coming to the factor that a lot of other factors, which derive the market for any segment. For example, we had geopolitical disturbance in the entire world, and we had issues with respect to China and the tariffs with the U.S. and everything. So, all these factors had a little bit -- if you look at -- because we have international investors. They have a little bit negative outlook on the country because of all these factors, which were derived on the tariffs. So due to that, every stock has taken a hit, including the renewable because this was -- especially into the focus. So these things, I mean, as I told you, whenever there is a stability and there is an economic return and a growth return in the entire world or in the majority, stability in the political, at that time, you will find companies which have performed well will immediately jump up. So, we are looking out for that. But once that stability and everything -- just like as you heard a few of the questions where the government is canceling PPAs, we have already kind of covered with that. We don't have any issue with that. But since the sentiment derives the market, it sometimes has that impact. So, I see that keep doing the good work. And when the right time comes, automatically, we will be the first to benefit from that.

The next question is from the line of [ Vikas Naik ], an Individual Investor.

Sir, my question is related to the expansion to the other states. So, I think Dr. Das mentioned that maybe around 2.5 years is a reasonable time line. So, just wanted to understand if any data from a land bank acquisition also that you can share?

Vikas, your voice is cranking. Vikas, your voice is cranking. Can you just step a little bit away from the phone because it's spreading.

Sure, sure. Is it better now, sir?

Yes.

Okay. So, I was just asking about the expansion to the other states, sir. Dr. Das mentioned that maybe 2.5 years is a reasonable time line maybe to look at maybe starting to get revenue other than the MAHAGENCO project. So is there some data that can be shared in terms of maybe land bank acquisition also that you're looking at maybe in the other states or any other data that is relevant to this?

Right. So, see, one of the things that we have already entered Maharashtra, you are aware, we have taken MAHAGENCO project. So that state we have already entered. We have recently won a few of the projects in Rajasthan also. So there also, we will be shortly starting our work over there. As far as other states are concerned, we are working on tenders and bids in those states also. So slowly, slowly, you'll find that. There is a clear indication from the management that we have to spread ourselves not only in India in other states, but also internationally. So if you can see that today, Faruk sir has given an interview and he was in Zambia. So, there are a lot of interactions which are happening. Internationally also, the PPA or what we say the MOU that we have signed internationally and everything. So, this gives us a comfort that we are well staged to go internationally also. And as far as states are concerned, we are there in some of the states, and we are increasing in other states also.

Okay. Understood, sir. Okay. Understood, sir. So just specifically related to the MAHAGENCO project, sir, so my understanding is maybe some part of this has been maybe collaboration with maybe a competitor like Bondada Engineering also. Is that maybe going to be the norm going ahead? While in Gujarat, maybe we are 100% maybe capable of maybe taking care of everything on our own, but in other states, maybe we have to collaborate?

So, what -- see, Bondada Engineering is also not a Maharashtra, but collaboration was done for our EPC business. So, there is some civil work and all those things for that project and everything, we have given them the orders. And he has done -- and previously also Bondada was one of our best vendors, you can say. Whereas the other states are concerned, we will look into it. See, there is also a lot of demography, which has to be taken care of because every state has its own nuisance or its own benefits. So when we enter any state, we see that if it is easily doable, we will close it or if we require some support from the locals, then we tie up with the locals and everything. So most of the time, your civil contractors and some of the R&Ws get solved by the locals only. So, we have to involve the local. So, we will take that step as and when we see that there is a requirement.

Okay. Understood, sir. Sir, just a couple of points on the ICRA report, sir.

I'm sorry to interrupt, sir. I request you to rejoin the queue. The next question is from the line of Hardik Gandhi from HMEG (sic) [ HPMG ] Shares and Securities.

Yes. So, congratulations on a good set of numbers. Just wanted to know your collaboration with Fabtech Technologies. So recently, we received an order for UAE, right? So the whole project is our order? Or is it on a sharing basis where the revenue will be shared between you 2, round-the-clock order?

Yes. He was on the part of the collaboration also. He'll give you a better understanding on the Fabtech MOU.

Yes. So as you are aware, right, especially with the AI boom that's happening out in the West, data centers is one of the largest and will be going to be one of the largest consumers of electricity. And what we have essentially done is that partner with them to establish a data energy stream, which KP Group will provide to them for their data centers and also the life sciences segment that they cater to. So it's a large order and a large collaboration, which we would be doing both in the Middle East as well as within the Indian geography as and when they develop their data centers and other life science projects.

Understood. But this project which we've got, is it fully -- the revenue of roughly INR 1,050 crores, is it fully recognized in our book? Or is it like a part order where INR 200 crores is their project -- their work and then INR 800 crores we'll recognize in our thing or the whole INR 150 crores is the...

The entire order value, which you quote, right, is only the renewable energy segment of it, the project execution. And to answer you shortly, it will be 100% recognized in our order book. It's only the renewable project execution that we're talking about, not the data center itself.

Understood. And I mean, no revenue from data center will be incurred in our books?

No, no, no. That's -- like that's their operational business. Our operational business is renewable project execution.

What's the time line for this order, execution time line?

I think you can take a good horizon of 2 to 3 years as they build data centers across Middle East and India.

The next question is from the line of Vijay Chauhan from RH PMS.

Yes. My question is the peak revenue that we can achieve on the current IPP capacity gets energized in a couple of years. So, what is the peak revenue? And I heard the margin on this capacity is around 90% EBITDA. But what's the PBT margin like that one can assume to, let's say, model the future cash flows? So, that is my first question.

So, Vijay, the peak revenue, as I told you earlier also that total capacity will be 1.5 gigawatts. After that, the peak revenue, we expect that approximately more than INR 1,000 crores that is up to INR 1,200 crores to INR 1,300 crores kind of top line only from IPP we expect, okay? Rightly, yes, the EBITDA will be around 90%, equal to 90% EBITDA. Now the PBT and the PAT depends upon the mix of CPP also. So at present, what we see that...

I'm asking only about the IPP. IPP only, PBT margin, right? Like EBITDA is 90. So, can you expect 60% PBT margin on the -- only on the segment of IPP?

See, only IPP segment, if you look at it, there is a repayment, there is interest cost and everything that has to be taken into consideration. So, approximately 40% or 45% should be the PBT around that.

Okay. That answers my question. And my second and last question is on the CPP order book. So, we have handsomely grown even on the -- if you look at the -- compared to last year. So, when do we see the numbers for FY '27 and FY '28 because we have a target of 10 gigawatts? So can we -- do you have any number in mind based on your interactions? Like can we expect it to be 4 gigawatt or maybe 5 gigawatt in FY '27, FY '28? Any number in your mind for both IPP and CPP for the order book? Some broad number will also help.

IPP, I can clearly say that. By FY '26, that March '26, we will be around more than 1 gigawatt on the IPP side and remaining by September or December '26, we will be closing. So, 1.5 gigawatt IPP will be there by December '26, you can say. As far as CPP is concerned, as I told earlier also, CPP depends upon the entire execution of the orders. So by FY '20, what you say, '26 or '27 March, you will be seeing the entire CPP order, which we have right now is getting closed and everything. So, there will be nothing which is left out.

My question is on the wind side. Yes, yes, new order wind side only. Like currently, we have like 2.43 -- like 2.4 somewhere in CPP side. So, that will inch up to when or let's say, we call the order wins. So, how much order win you are looking at IPP and CPP, or you are internally targeting? Maybe 2 gigawatts, 1 gigawatt for next 2 or 3 years.

You're talking about the booking number. You're talking about booking orders, right?

Yes, yes. Right. Yes, new order wins that you are looking currently. Beyond this, what we have already won in recent times?

Yes, yes. So if you see, we are already bidding and we have a bidding success rate of 75%. So new orders we are bidding, we are looking at our target. Even, in fact, our Honorable CMD sir, Faruk sir has clearly said that the target looks very small right now with 10 gigawatt. We already have 6.6 gigawatt at the group level with us. So automatically, we expect this 10 gigawatt. So logically, we will be having a huge order flow in the coming years, which can be -- I mean, KPI itself can be more than 5 to 6 gigawatt. It can be depending upon the tenders that's been floated and that we are placing.

And Vijay, just to add to that data point, right, our internal target for KP was 1 gigawatt for 2025, where currently we are sitting at 6 gigawatt today. And by the end of -- the target -- the internal target.

Target is 10, right?

No, no. Let me complete. The initial target for 2025 that we had taken was 1 gigawatt. 2030 was 10 gigawatt. Against that 1 gigawatt, which we had taken in 2025, today, we stand at a group level portfolio of 6 gigawatt. And by this financial year-end, I think that would go up easily by 1 more gigawatt. So our 2030 target, we are well ahead on that. And as we bypass the 2030 target, I'm sure we will be bypassing our 2030 target very, very soon.

The next question is from the line of Garvit Goyal from Nvest Analytics Advisors.

Sir, just again on the grid stability part. So, I just want to understand from Faruk sir, like how he is anticipating? He mentioned that further orders will be coming in the power transmission and the execution will happen. But the thing is, is there any chance like that kind of delay happening at that side that can further lead to ultimate delay in the renewable CapEx going ahead? So, I want to understand his take on that current situation and the outlook.

See, let me just speak about the company first. As I told you, company doesn't have any impact because of this. We have already tied up and our evacuation, everything is in hand. Whereas the sector or segment is concerned, I would request Alok sir, to a little bit throw again light on what we have discussed earlier also on the grid stability and availability. Alok sir?

It appears there is some problem. Can you tell me again the question?

Yes. So, Garvit wants to understand the grid stability and grid availability issue with the sector altogether as is.

See, grid sector, now today that whatever the project is coming, all transmission companies, they first see that what is the load flow study of the grid. Based on the load flow study of the grid, they give the power execution permission. Now today's scenario has come, there is the hybridization, RTC and all. So if there is a time gap between the wind, solar, battery storage and all, so they want to think all power output and think to the power so that there should be smart grid implementations happening. So now all transmission companies, be it power grid company central level or state transmission unit, they are coming for the load flow [ stabilization ]. Based on the generation and consumption, they are coming to smart grid applicability with a disciplinary system called DSM arrangement. So, you have to generate and consume between the 15-minute generation and consumption, you have to think. So that is what is coming for the power grid discipline. That is happening today. So, there should not be any curtailment in future.

The next question is from the line of [ Shravan ] from [ Naksha Private Limited ].

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The next question is from the line of [ Samrit Shah ], an Individual Investor.

Congratulations to the entire team for another stellar performance, especially Faruk sir and Salim sir. [Foreign Language] Sir, going forward, what are the kind of margins like IRR we can expect from this particular sector? So is it because of the lower margins or is it not viable? I want to know about that.

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[Foreign Language] But we are in this also. We are able to maintain a margin, very good margin. So, I don't think margin will have an impact. [Foreign Language]. We might cross more than 20% on the PAT level also

But my question was specific to best and green ammonia related segment. Whether the current margins will be maintained after they are getting orders in those 2 segments.

In those 2 segments, we have a separate company for green ammonia and hydrogen. So, those companies will be separate. They are not part of the KPI or its subsidiary. [Foreign Language] That will be a separate. At present, it is not a listed company. It is a Private Limited Company where we are going to do those first.

[Operator Instructions]

Team, we will be closing this queue for questions. If there are any questions, please join now and within next 20 seconds if you want to join. Otherwise we'll only be taking the questions for the people who have joined the queue. Thank you for your understanding. Okay, Muskan. I think we are good to go. We have 7 more participants. We'll answer these questions, and then you can -- then we'll close this con call.

The next question is from the line of [ Vaibhav Lodha ] from [ CFM ].

Sir, firstly, congratulations on the good set of numbers in all 3 companies of KP Group. I just want to understand the industry level outlook for the solar segment. As of now, like this year, we will be adding around 40 to 50 gigawatts for solar. So like do you see this increasing year-on-year over the next 5 years because if it is not adding up then the market share of -- without increasing market share very heavily, then the CPP orders will be constrained to the current number of orders only. Sir, where do you see the number of additions of the solar power in the next 3 to 5 years?

First of all, you need to understand, Vaibhav, that we are a player who is capable of doing solar as well as wind and hybrid, okay? So, we are way more competitive and we are way more ahead of any of the other competitors. So from that point of view -- and as far as the -- as I told earlier also, the segment, I mean, there is -- people think that there is excess capacity on the solar side of manufacturing, but we are not a manufacturer. We are an executor. We have sufficient order book for upcoming years and they are sufficient on the IPP side and the CPP side. So as far as we are concerned, we don't think any impact on our financial strength or our execution capabilities or our books will be there. So, that is clear. As far as segment is concerned, yes, there are some hurdles on the segment, but I think government is strong enough or we will be taking steps, which will be promoting this because the government also has a focus of increasing this particular segment.

Okay. So like are you expecting a completion of the 500 gigawatt renewable energy before 2030 because otherwise, the solar additions would be only 40 to 50 gigawatts FDRE, which is same to this year?

I'll give you the answer. But I will give the answer. So basically, there are total 500 gigawatt is there. As on today, what country has completed, 252 like all non-fossil sale, out of that solar, they have done 127 and wind about 53 gigawatts. So now that rest of the projects is under bidding, those for the government of India already project close to 60 gigawatts and some of the projects under implementation is about 125 more, that gigawatts. So before 2030, 500 gigawatt, Government of India is pretty much sure that 500 gigawatt would be done. Only the commissioning may get 1 or 2 years, but all the process of the bidding process has to be done. So now this is what now government is only concentrating how to evacuate the power of that 500 gigawatt. That is why concentration is done. But market growth is there. Now if you see that for last 1 quarter, solar and wind, near about 25 gigawatts added to the grid of the country. So, growth is immense because the 500 gigawatt is to be completed. And today, the solar capacity, production capacity, manufacturing, that capacity is more than 155 gigawatt. So to match the supply chain and all requirements undertake in India, government has all the backward integration and supply chain. So, we are all confident that target of 500 gigawatts must be done.

The next question is from the line of Gaurav Sharma from Anuja Properties.

My question is for Salim sir. Sir, as you mentioned that there has been no equity dilution in the past 1 year, so why is there a difference between EPS and PAT growth? Can you explain?

See, EPS depends upon your profitability also, right? So the number of shares which are there after bonus and everything, they have increased. So, we had given in the past. In the past, we have given bonus and everything because of that. But as far as dilution is concerned, if you see promoters' equity, promoter shareholding has never diluted in the past. It is still at 48%.

Got it. And can you tell me the ROE figure of H2 FY '26?

It's around 24%.

The next question is from the line of [ Manav Agarwal ], an Individual Investor.

Congratulations, sir, on a good set of numbers. I have 2 questions. One is on -- is there any update on the pledge shares release, which we discussed on the last con call? And my second question will be on -- given this is an extended monsoon period this time all over the country, are we on track to achieve the 70% guidance, which was communicated by Faruk sir?

Yes. As far as pledge is concerned, I've already explained in the previous question. I'll just reiterate that. In our latest sanction, see, our pledge is with State Bank of India for our existing term loan that we have taken. It's a collateral. It's not a pledge against shares or a fund raise against shares. So, that collateral is also going to get released once we complete this 1.2 gigawatt, the funding which we have given INR 3,200 crores. By September '26, we will be doing the COD. And after that, within 6 months. So by March '27, SBI will release the pledge for all our shares, and that is clear cut terms and conditions in our sanction letter from SBI. So pledge -- as far as pledge is concerned, shortly will be -- by March '27, all the pledge will be removed from the shareholding, which promoters' pledge are there. As far as monsoon is concerned, yes, we are already tied up. We have -- I mean, in spite of such longer monsoon, we have shown a substantial good result. So, you can understand that. Going forward, it will be a far more better result than what we have done in the first half because we have taken -- we have hedged our panels and everything have been -- delivery has been taken place. So, we will be focusing on faster execution, whether it's on the CPP side or the IPP side. So yes, we will grow faster.

The next question is from the line of Vikas Naik, an Individual Investor.

Just two questions on the ICRA report, sir, which came at the end of July. One of the points mentioned was that there is a weak exit clause in the PPA. So, just wanted to understand, sir, maybe what made ICRA to maybe have that observation because they mentioned that maybe the party can maybe terminate with 6 months? Is it different from a regular PPA in this industry?

So you need to understand in IPP, we have 2 segments. One is the C&I segment, that is the third-party open access in which we have 170 megawatts, okay? And the other is the utility or GUVNL, where we don't have any exit clause. It's 25-year PPA. Now the 170 megawatts, there our PPA are designed in such a way whatever the DISCOM rate is there, I will give 7% to 8% kind of a discount to the customer on its rate. So for example, if the rate is INR 8 or something, I'll give 7%, 10% discount on that. So automatically, INR 0.56 kind of a discount will be there and the remaining else. So in those PPAs, we are earning at a rate of INR 7.50 per unit, so in good PPAs. Because there are big customers like UPL, Colourtex, Meghmani, Tata Motors, Indian Airport. So, we have kept it open for them. But believe me, we started this particular open-access PPAs in the -- right from 2018 onwards or say, '16 onwards when we started that. So first one, we had Mafatlal and all other companies as well. Today, also we have 80% of our PPAs are AA+ clients, and they are increasing. For example, we started with 1 PPA with Colourtex. Now, they have 3 to 4 PPAs and everything. They have extended. So in spite of having that exit clause, we have -- they have never exited because of any pricing or anything because it's a clear cut that every unit has a different, different PPAs with us. And on the same 170-megawatt cash flows, we have raised the NCD green bonds. So, you can understand even the market players like Aseem Infra, SBICAP, Jio Credit, who have invested in the green bond, they are also aware that these are long-term kind of thing. Just for the comfort of the corporate, we have kept that plot, but it is not -- never exercised by any of those firms, yes.

The next question is from the line of Garvit Goyal from Nvest Analytics Advisors.

My question is already answered.

The next question is from the line of Anil from K16 Advisors.

See, when I talk to people outside, I hear persistently this issue that, look, there is an RPT concern. There are 3 companies and revenues booked here and there. So, some of us are aware what the method of operation is within the KP Group? But for the benefit of everybody, why don't you, in your forthcoming presentation or maybe you can even upload a fresh presentation saying that who gives what order to whom, what are the commercials? Because I suspect that some of the image is getting affected through having multiple companies all with KP in the beginning of their name. And it leads to some kind of discomfort amongst people who don't even know the truth. So it would be good if you laid out a schematic in a PPT somewhere that order comes from here, it is partly given to Bondada, partly given to this much, et cetera, et cetera. And there is no revenue double counting, et cetera, because this is what I hear that there is revenue double counting.

No, no, no. I've just explained on one of the questions about the revenue double counting confusion, which one of the investors had. So let me be clear. First is about KP. KP is a brand. KP is a trademark. And that's the reason every company has that trademark at the start, just like you have Adani or you have Reliance. So, we have a trademark. That is a brand which is known -- we are known by KP Group. Secondly, on the execution side, every order which is given is at arm's length. There is no benefit given to any of the company. It is at arm's length. What I would be giving outside, I am giving at the same cost and everything to my group company. And they are also executing the same way that they are doing for the other company. So, I don't think any issue with respect to the -- but nevertheless, what you have said, I would surely see to it that next time onwards in the full-year presentation, everything we clearly mention or we'll put a slide, which will give a little bit more explanation about the related-party transaction, which I understand that analysts have a little bit inhibition with respect to the related-party transaction. Your point is taken.

Yes, no, but I would only urge that people have all kinds of weird notions and let's not wait for the end of the year. But yes, I think the point is being made.

We'll try to put in the third quarter. Third quarter presentation, we'll try to put that.

The next question is from the line of [ Darshan Malani ] from [ Investar ].

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[Foreign Language] We are expecting to, as per our projections, we might go up to that, yes.

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Ladies and gentlemen, as that was the last question for the day, I would now hand the conference over to the management for the closing comments. Over to you, sir.

All right. Thanks, everyone. Thanks to all the investors, shareholders and well-wishers who have joined us on this call. As you have gone through the question list and the key information you would be receiving through our official channels and this con call, we are on a trajectory that will oversee a lot of doubts and we are on a trajectory that will take us very forward in both the business segment as well as in the share market. So stick with us, and we'll be back to you with the next conference call for the next quarter. Meanwhile, please do know that we have KP Energy and KP Green Engineering con calls as well scheduled within this week. So if you do have your doubts, questions or you just want to participate, you can join in these calls. Thank you, and we're signing off.

Thank you.

On behalf of Share India Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.