Everything mentioned in this post is just for educational purpose only please do your own research before investing
After setting the benchmark of Zero Carbon Emission & a renewable source of energy, Solar and Wind energy are the first things that come to mind which contribute significantly to renewable energy production. The Indian government also supports the renewable energy sector by offering various schemes like PM SURYA GHAR MUFT BIJLI YOJANA, giving an extra boost to the growth of this sector. Among the companies in this sector, a financially robust and potential multi-bagger stands out:
KPI GREEN ENERGY Ltd.
About This Company:
KPI Green Energy Ltd. is a leading player in the renewable energy sector, specializing in the production and distribution of clean energy solutions. Established with a vision to contribute to a sustainable future, the company focuses on harnessing renewable resources to generate electricity while minimizing environmental impact. With a diverse portfolio of renewable energy projects, KPI Green Energy is committed to driving innovation and promoting green initiatives in the energy sector.
The company provides solar power, both as an independent power producer (IPP) and Engineering, Procurement, and Construction (EPC) services to Captive Power producers (CPP) customers. The company runs its entire business from its Bharuch plant. Currently, the company has an installed capacity of 100 MW of solar power under the IPP segment and 100 MW+ of EPC/CPP projects.
History:
Founded in 1994, KPI Green Energy Ltd. embarked on its journey to revolutionize the energy landscape through sustainable practices. Initially starting with small-scale renewable energy projects, the company quickly gained recognition for its commitment to quality, reliability, and environmental stewardship. Over the years, KPI Green Energy has expanded its operations, leveraging advanced technologies and strategic partnerships to become a key player in the renewable energy market.
Journey to Listing on SME, BSE, and NSE:
KPI Green Energy Ltd. began its journey by listing on the SME (Small and Medium Enterprises) platform, where it showcased its growth potential and operational excellence. Bolstered by strong financial performance and a robust business model, the company attracted investor interest and gradually gained traction in the capital markets. With a track record of success and a solid foundation, KPI Green Energy was eventually promoted to the main boards of both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), marking a significant milestone in its corporate journey. This transition not only enhanced the company's visibility and credibility but also provided investors with greater opportunities to participate in its growth story.
Financial Ratios:
- Market Cap: ₹ 9,260 Cr.
- Current Price: ₹ 1,536
- Stock P/E: 61.4
- ROCE (Return on Capital Employed): 24.7%
- ROE (Return on Equity): 53.4%
- Debt to Equity: 2.58
- EPS (Earnings Per Share): ₹ 26.8
- Profit Growth: 71.8%
These financial ratios highlight KPI Green Energy's strong performance and solid financial footing, with impressive returns on investment and equity, coupled with significant profit growth. However, the relatively high debt-to-equity ratio warrants careful monitoring to mitigate financial risks.
Shareholding Pattern:
Shareholding pattern of this company also looks good with rising interest from FIIs and DIIs constantly buying the stock. We can also see from recent trade data that the directors and promoters are also buying shares to increase their stake, indicating a strong confidence in the future growth of the company.
Future Outlook:
- The company has a target of reaching 1000 MW capacity by 2025.
- Achieving annuity-based income through Own IPP and Cumulative portfolio target of 250 MW by 2025.
- Achieving one-time and annuity-based OMS and Lease income from CPP with a Cumulative portfolio target of 750 MW by 2025.
- The company also ventured into wind-solar hybrid due to its added benefits, flexibility, and grid stability.
S.W.O.T. Analysis:
Strengths:
- Strong financial performance and profitability ratios.
- A diverse portfolio of renewable energy projects.
- Commitment to sustainability and environmental responsibility.
- Strategic partnerships and alliances enhance market presence.
Weaknesses:
- High debt-to-equity ratio, indicating potential financial risk.
- Reliance on regulatory support and government incentives for renewable energy projects.
- Vulnerability to fluctuations in commodity prices and energy market dynamics.
Opportunities:
- Expanding market for renewable energy solutions driven by increasing environmental awareness and regulatory mandates.
- Technological advancements lead to cost reductions and efficiency improvements in renewable energy generation.
- Potential for geographic expansion and diversification into emerging markets.
Threats:
- Intense competition from traditional energy players and other renewable energy companies.
- Regulatory and policy uncertainties impacting investment decisions and project timelines.
- Economic downturns and market volatility affect investor confidence and project financing.
