Ladies and gentlemen, good day and welcome to the KPI Green Energy Limited Q4 and Full Year FY25 earnings conference call, hosted by Share India Securities. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Patil from Share India Securities. Thank you, and over to you, sir.
Hello. Good evening. Thank you and good evening, everyone. Congratulations on a very good set of numbers. On behalf of Share India Securities, I welcome you all to Q4 FY25 Earnings Conference Call at KPI Green Energy. We are pleased to have with us the management team represented by Mr. Sohil Dabhoya, Whole Time Director, Dr. Alok Das, Group CEO, and Mr. Salim Vora, Chief Financial Officer of the company. We will have the opening remarks from the management, followed by the question-and-answer session. Thank you, and over to you, Ritvik.
Hi. Good evening, everyone. This is Ritvik Chauhan, AGM Investor Relations for KPI Green Energy. I'm pleased to have everyone join us today to go over KPI Green Energy's very strong quarter, Q4 FY2025, and full year 2025 results. Just to give you a brief overview, we have, in addition to the 950 MWs of renewable energy already commissioned, added another 2.6 gigawatts of orders in hand. Our financial results in terms of revenue, PAT, EBITDA have all been tremendously successful. So I'm really excited to have our management talk you through those numbers today. I first want to introduce our Group CEO, Dr. Alok Das.
Yeah. Good afternoon, everybody. I'm very glad to share some of the information. I think what Ritvik has already told, that what is KPI numbers. And today, actually, while we the KPI Green is leading through a renewable energy space, the market is very dynamic. And the growth of these renewable energy initiatives, both for wind and solar, are very, very encouraging. And while going through, you can know that in India, there are a total 500 gigawatts there, and almost 220 gigawatts is completed. So probably market demand is more than 40-50 gigawatts per year. And there's a conducive policy prevailing. So we are on the right path while going forward to harness the renewable energy and for the society as a whole. And I think that is what we can do, deliberate some new kind of projects is also coming up.
So during conversation, we can share that also. So with this, I can hand over to our group, to our CFO, Mr. Salim. Yes.
Thank you. Thank you, Doctor. Good afternoon, ladies and gentlemen. Thank you for joining KPI Green Energy Limited Q4 FY24-25 earnings call. I'm Salim Vora. I'm Chief Financial Officer. I'm delighted to report that in Q4 FY25, we have delivered yet another record quarter with a total revenue of INR 577.80 crore, up 97% year-on-year from INR 292.97 crore, driven by accelerated project execution and higher capacity utilization, while EBITDA rose 76% to INR 169.43 crore on the back of improved operating leverage and cost efficiency. PBT, that is profit before tax, rose 131% to INR 138.70 crore, thanks to our strategic debt repayment, reducing finance costs and profit after tax climbed 142% to INR 104.18 crore, underscoring our disciplined financial management for the full year FY25. We achieved total revenue of INR 1755.16 crore, a substantial increase of 70.3% over INR 1030.82 crore.
Again, EBITDA of INR 580.87 crore, up by 69.1%, and profit before tax of INR 440.90 crore, 103% rise, and a PAT of INR 325.28 crore, up by 101%, reflecting the strength of our project pipeline and robust demand for clean green energy. Various other things that we have achieved other than the financial during the year. We have successfully raised INR 1,000 crore through a qualified institutional placement, which includes some of the marquee institutions, including Morgan Stanley, Goldman Sachs, Société Générale, BofA, Motilal Oswal, strengthened our credit profile. It also upgraded our rating to ICRA A Positive, secured a landmark EPC contract of 300 MWs AC from Coal India Limited, 100 MWs AC from Mahagenco, all on track for early commissioning. And on the technology side, advanced our network operations to deliver 24/7 monitoring and predictive maintenance that has lifted fleet availability to 98.5%.
While moving on to other states, we have signed MOUs with states like Odisha, Rajasthan, and Madhya Pradesh to set stage for a larger scale solar and hybrid project. As you all know, we remain committed to the disciplined capital allocation and further delivering year-on-year. Thank you, everybody. Now I open the forum for questions and answers.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants who wish to ask a question may press star and one now. The first question is from the line of CA Garvit Goyal from Nvest Analytical Advisors LLP. Please go ahead.
Hi. Hello, Garvit?
Yes, sir.
Yes, Garvit. Good evening, sir. Congrats for the decent execution. My first question is on CPP part. Given that the CPP currently contributes 87% of the revenue and tends to offer the higher near-term EBITDA margins due to faster execution cycles and low capital intensity, so how do you expect the overall margin profile to evolve as your IPP portfolio scales toward 1.5 gigawatts? And we are also talking about BESS projects being contributing. Specifically, can you help us understand the margin differentials between the IPP, CPP, and BESS in your operating context, and how the shift in the business might actually impact the consolidated margins in FY26 and FY27? So that is my first question.
All right. So Garvit, if you see this year, our total mix of revenue from IPP and CPP was IPP was 13%, and rest all 87% was the CPP. The margins have slightly improved compared to last year because of the liquidity. Now, as we go forward, you must have seen our presentation also that we are going to install 1.5 gigawatts of IPP capacity. Now, this will take a year or a couple of years. It will go in a phase-wise manner. So it will keep on adding to the IPP side. Our final goal is to at least take this to 25%, IPP portfolio to 25%, and the remaining to a CPP portfolio. With that increase, naturally, the margins will improve because, as we all know, that IPP brings in a strong EBITDA margin, around 85%-90% kind of margin it can reach up to.
The CPP brings around 20%-22%. The combined EBITDA margin would be around 32%-33%. As we go forward, if we add more of IPP, naturally, the margin will shift to a stronger position compared. It depends upon how much portion of CPP simultaneously get added. Our goal is to add more and more of IPP as we increase the CPP also.
Thank you. Participants are requested to restrict their question to one per participant. If you have a follow-up question, I would request you to rejoin the queue. The next question is from the line of Rajit Gupta from Rajat International. Please go ahead.
Hello, everyone. Am I audible?
Yes, sir.
Yes, Rajit, you're audible.
Yes. Thanks for the opportunity and congratulations for the fine set of numbers.
Thank you.
Sir, my question is addressed to Mr. Salim Vora.
Yeah. I'm here.
Yeah. There is no debate that we have attained commendable numbers and very commendable growth. But it seems like from the last three years, we are attaining the growth via either liquidating the equity or raising the debt. So it has started to look in the depleting ROC and ROE as well. So in this quarter, we are seeing the EBITDA margin is slipping as well. So can you?
Yes.
Hello?
Yeah, Rajit. I got your question, Rajit. First of all, thank you for the congratulations for the results. Let me give you a perspective that when you look at our results, you are looking at the ROCE, ROE, decrease in the ROCE. But it is not because of the performance decrease. It is because our net worth has increased substantially with the QIP offset. And I understand you are saying diluting. But you need to understand that we are into a business which is a very capital-intensive business. The IPP segment is a very capital-intensive business. And for that, we require huge funds which are required to build up the assets. Now, these assets are long-term assets, 25-year assets. So you are getting an annuity income of 25 years, which you are infusing into the asset BESS.
That is a very, I would say, as an investor, if I had been an investor, I would always like to have a long-term annuity revenue. And that is what is coming into our business. As we go on, we add more and more assets. It will increase our, it will strengthen our profitability margins and everything. The drop in the ROCE or ROE this year was because of the infusion into the equity, or you can say the net worth. You have to also see that the debt equity has substantially improved. Last time, it was around 0.5. It has come to 0.33, which should also give you a comfort that whatever amount of interest that we were paying earlier, we have reduced that also.
So overall, it is a good because, see, until unless we show a growth, it is not, and the growth is going to come from infusion of funds or adding more and more assets because CPP will bring to us an exchange profitability. But beyond that, it is IPP that is going to drive the future in the renewable energy. So that's the reason we have taken a cautious call. But we have not gone over, we are not overdriven by increasing too much debt. In fact, debt has reduced compared to last year if you look at the debt equity ratio. So this is the nature of the business characteristic where you will have to infuse, if you want to grow, you will have to infuse more and more IPP so that you get a continuous income. That is more important.
Thank you. The next question is from the line of Rohit Singh from Nvest Analytical Advisory LLP. Please go ahead.
Hello. Am I audible?
Yes, sir.
Yeah, Rohit, you
're audible. So you talked about improvement in the EBITDA margin. So I would like to ask two questions. One is, what is the guidance for next year? And whatever the top line that we are looking to grow in FY26, and if the IPP contribution is on the higher side, so that means the bottom line is going to be outperformed in terms of as compared to top line?
See, as far as next year is concerned, we have already multiple times our CMD Chairman, Dr. Faruk, has also given that we are committed to at least 60%-70% growth year on year, and we have done this year. We are very positive that we will improve the same in the next year also. IPP, yes. IPP, we have already got 1.5 gigawatts, as I told you, which is in the pipeline of execution. Now, this will come into a phased in a phased manner. So we see that this 1.5 gigawatt will totally be operational in the next couple of years. So you can see from the third year, you can see the revenues of IPP of this IPP flowing strongly from the third year.
If you can see like FY25, 26, 27, so 27, 28 will be the first full year where we will be able to get the entire 1.5 gigawatt revenue. But there will be simultaneously, as we keep on adding capacity, there will be some portion which will get energized and will start flowing in the revenue. Naturally, if I add more and more IPP, my EBITDA margin will also improve. My PAT will also improve. But we expect this major impact coming from the third year onward, where the entire 1.5 gigawatt and something new which we will be setting up, which will wait. But we will be able to maintain our margin of 17%-19% kind of a margin at a PAT level.
Thank you. The next question is from the line of Rachit from Finquest. Please go ahead.
Hello.
Yes, sir. Audible.
Yeah. Congratulations, sir, for the great set of numbers.
Thank you, Rachit.
Yeah. So my question is that in the EPC part, since we have seen one of the players have been filed for the NCLT, so do you think that the competitive intensity in the EPC segment has reduced and the pricing segment must have improved? And we might also get some order from them if their order is pending.
See, Rachit, as you were saying, that one of the company players has moved out of the race. Nevertheless, I mean, whatever orders that particular entity has taken, it will come back again into the market for some others too. We are one of the players who has, see, at present, I have CPP order book of 2.20 gigawatts, which is quite comfortable for installers upcoming. So 1.7 is the new order book that I already have, which is quite big compared to what I'll be executing. And we are adding more and more. Naturally, the new orders will get added to it. But everywhere you have to see at the two things.
One is that the execution capability of the entity, which in case of KPI is almost more than a decade of experience in executing wind as well as solar and hybrid projects, which is a plus point for us. And majority of the places we have that our capability helps us to go at a very competitive prices when it comes to our tender bidding and all this. So naturally, yes, we will be adding more and more of this and competitive market because still there are a lot of players who are bidding for it. The test is about who will be able to execute within the timeline that is given.
Thank you. The next question is from the line of Ashish Rampuria, who is an individual investor. Please go ahead.
Thanks and congrats for the results today. So my question, see, also sort of Faruk ji also gave a couple of interviews towards the results, right? And he spoke about that all the current order book should get executed within this financial year, right? At least that's what he spoke about. Maybe the entire IPP might not happen. I'm just trying to understand the order book and pipeline for FY27 and something for FY28, right? Because ultimately, we're talking about 60%-70% CAGR for the till FY23. So do we have any visibility beyond FY26? Because FY26 is sorted, right? So beyond that, if you can throw some color for us. And also, I think link to this question before the person stops me is in that India map where you have shown sort of Odisha, MP, and Rajasthan, you also shown, if I'm not wrong, Andhra Pradesh, right?
That was the highlighted space. So if you can also talk about that, maybe plans around that.
First, I'll speak about the order book. So if you see that the order book that we have given, when it comes to the CPP, we have all together 1.76 gigawatts of upcoming order book that we already have. Other than that, there are also new orders. I mean, some I cannot disclose right now, which we have already won or where we are going to bid. So I think within next six months or the next quarter, you will see the increase in the order book, substantial increase in the order book, which will cover the entire FY27 also. So order book is not a problem because the sector is very booming, and there is a lot of orders and work which is available for a good player like us.
We are very confident that we will be able to close the FY27 also, entire year in a first or a second quarter max to max. That will help us to give enough time to close that also. In fact, FY28 also, portion will be flowing down because that's substantial. We have already bid, and we are confident we will close it. Moving on to the opening in the other state, I would request our Group CEO, Dr. Alok Das, to just throw some light on this also.
Yeah. This is good to know that your questions just about beyond our Gujarat. See, basically, we have signed up three MOUs of the three different state governments. One is Rajasthan. There is another for MP, another for Odisha. So where we are clear-cut, we have signed our MOU for execution. And now at present, that every state, there is a basic requirement of the renewable projects, and there is a creation of resource in terms of power evacuations and land acquisition. So we have already signed a document for land acquisition and PE creation in all three states. And all three states, the administrations are in close touch with us for the resource creation and all. So this will take typically about, if it is a wind-related project, so we have to have some data management and all.
It will take one to two years completely for the data management. And creation of power evacuation will also take equal time, like one and a half years. So whatever the other states' kind of activities will be coming, probably after two and a half years onwards. So that is what three states we are just under the status of progressing to other states, what we are planning for that.
Thank you. The next question is from the line of Rakesh Banerjee from RAP Capital. Please go ahead.
Yeah. Good afternoon, and congratulations for the wonderful set of numbers. My question is on your unit generation. When I did the YY comparison, I found that in this year, our unit generation has increased only by 16.9%, whereas in the last few years, we have been growing our unit generation by almost more than 40%. So is there any specific reason that the unit generation has slowed down? And what will be the color for the, I mean, the unit generation in FY26, if you can give some color on that?
Yeah. So Rakesh, if you see that in FY24, we did 21, and this time it is 24.9. We have set up IPP projects in this year, but they were done in the slack end of the quarter four. So the generation will come up in the next year. So approximately, if you see, we have given you that entire 1.5 gigawatt, which we are going to set up, that will generate approximately 300 crore units per year. So going forward, you'll see a substantial growth into unit generation. This year, we have added the capacity, but it was throughout the year we had worked on adding the capacity, and it got energized at the end in the month of March.
So, automatically, what happens is the unit will start flowing into, and these are only IPP units, our own planned units that we are counting, that what we have generated. So, next year, you will find substantial growth. After that, it will be furthermore substantial growth from what the previous year is.
Thank you. The next question is from the line of Parth Kotak from Plus91 Asset Management LLP. Please go ahead.
Hi. Hi. Thanks for the opportunity. Sir, I just want to get some color on our CPP realizations. In FY25, we reported a 1,500-plus crore of revenue from CPP on 160 MW energized, implying a realization of about 9 crores per MW which is significantly above the standard of 4 - 5 crores per MW range. Last year's realization was more aligned with this norm, so the elevated figure this year appears exceptional. Sir, as we look ahead, should we expect CPP capacity addition to outpace revenue recognition, thereby normalizing realization per MW closer to 4,500 crores going forward? And if you could also clarify, I'm sorry for the slightly longer question, sir, if you can clarify this year's higher realization includes elements like land, BOS, or turnkey EPC that may not be directly tied to MW energized. Thank you, sir.
Yeah. Parth, the calculation that you did is not what the calculation we do. See, our CPP business, our billing is done on milestone basis. So there are 10 - 15 milestones for any particular project, milestone depending upon the supply, milestone depending upon the work contract, like piling, installations, and everything. So our billing is done on the milestone basis, but we add the capacity only when we energize the entire plant. So there will always be a disparity between what is on the—you cannot directly match apple to apple your top line vis-à-vis the energized capacity. As far as the range of per MW, we are not different. We are not different from what others. So our range is also around the same 3- 3.5, 4 crore per MW that is got on the solar side and 6 - 7 core per MW around the wind side.
So the industry what is doing, we are also doing the same thing. It's only the calculation that is done. It's on milestone basis. So we book revenue. So maybe there is any particular project where we have completed 80% of the project, but the capacity is not added because we have still not energized that project. So the revenue will get added to the top line, but the capacity only when we complete the entire project, it gets added. So that's why you are seeing—you're finding it difficult to match it up with that.
Thank you. The next question is from the line of Anil Sarin from K16 Advisors. Please go ahead.
Hi. Am I audible?
Sir, I would request you to please use your handset.
Okay. Switching to handset now.
Yeah. So I'm curious about the economics of the IPP business. Somewhere in the call, I had heard 18%. So if you could throw some light, what are the assumptions? Do you get a certain amount of rupees per unit, and what is the cost, and what is the net equity ratio such that one can get to the equity IRR?
Yes. So Anil, first of all, let me—I mean, we have in our presentation, if you have seen, we have given you an average rate per unit. That's what we have because it is coming from the actual LOAs that we have. So average rate per unit is around INR 3, which includes hybrid kind of a plant, which includes solar and wind also altogether. That's what we will be earning as we go forward. Moving on to the debt equity, I mean, we usually go with the 75-25, 75% of a debt from the lender and 25% equity portion. So if you look at that, the average IRR that we get on any project, it would be around 12%-13% kind of an IRR for any IPP project when I'm talking about IPP projects.
Is this the total project IRR? I'm looking at equity IRR.
Equity IRR would be around 17%-18%.
17%-18%. So if it is like that, would it not drag down the overall ROE? I mean, in terms of what it looks like, I am aware that 17%-18% for 25 years is a very, very good number. But in terms of how it appears optically, what I mean to say is when your ROC comes down to around 17%, so the blended numbers will just for an analyst looking at it on a snapshot basis, the ROC, etc., would start looking lower.
Look, see, the EBITDA margin in this, what we are earning is very high. But when the PAT margin comes after repayment of all the debt and everything, I mean, the IRR that what we earn is around 17%-18% on the equity. So your return on equity, and the reason is that we have to - if you see ROCE, return on capital employed, naturally the debt portion, as I told earlier also, we are capital-intensive business. So this will have - this will be going forward, will have an impact on the ROCE depending upon, but the size or the volume that we will be working with will be huge as we go forward. So the absolute term, it will be a huge percentage-wise, it will slightly move a little bit up or down.
Thank you. The next question is from the line of Pranjal Soni from RRR Investments. Please go ahead.
Hello. Congratulations on great set of numbers. I just have two questions. So the first is, what opportunity does KPI Green see in battery energy storage system? And so in PPT, it was mentioned that KPI would start first with CPP, and accordingly, we'll participate in tenders. So just trying to understand how does that BESS actually works, and is there any BESS mandate for PSU companies? So that was the first question.
Yeah. So Pranjal, I would request Dr. Alok Das to pitch in on the BESS because he's an expert on that BESS, battery energy storage system. So he'll give you a little bit brief on that.
Pranjal, if you basically what is there because nowadays you can see that renewable energy penetration is coming more, so there is a grid discipline coming into the picture, so during daytime, there are a lot of solar pumping is there, and wind is also coming, and there is hydro and other thermal projects are coming, so grid is getting indisciplined, so maybe a smart grid concept has come to India, and now they are telling that whatever extra generation that cannot be distributed to the grid, and you can store it in terms of battery, and that battery storage should give the load pattern and sync with the demand of the distribution company, so that could be discharged at a particular time. For example, nowadays, every state government, because mostly projects are coming on the specific state demography.
States like Rajasthan have come out that all the solar projects should come with the 5% BESS mandatory. What that means what? Whatever the solar generation, they can store, and that will be mandated. Whenever peak time requirement, that battery can be discharged. This is coming as a very mandatory kind of grid requirement where power can be generated based on the resource available. When the demand comes at that time, it will be discharged. Like the BESS is coming very, very as this upcoming technology, which can be used for hybrid projects, both wind and solar just together. That is a mandate coming for all states together. That is what the future path is. Anyway, all the companies bring for the BESS application. Your second question, what was that, Pranjal?
So we have lost the connection of the current participant. We'll move on to the next question. That is from the line of Kunal Mehta from Pineapple Capital Advisors. Please go ahead.
Yeah. Hello. Am I audible?
Yes, Kunal, you're audible.
Yeah. So just a couple of questions regarding the IPP business of 12 MW of the GUVNL. So do we plan to commission this project in phases and start generating revenue phase by phase, or it will be totally at the end of the year when the entire 1.2 gigawatt is energized? That is one. And secondly, out of the 1.76 other gigawatt in CPP, what is the plan? How much can we energize in the current year?
Okay. So Kunal, on the IPP side, if I give you the project that we have already uploaded on the BSE websites also, that we have 50 mMW hybrid, we have 250 MW solar, we have 370 MW hybrid. So these projects will come in a phase-wise manner as we start completing. Like 50 is already completed, 250 will be completed, then 370, then another 150. So in a phase-wise manner, depending upon the LOA or what is the PPA that we assigned, it will come into that. Not altogether 1.5 will come on a one fine day. It will be in a phase-wise manner. The second question you asked was on the CPP, right? Hello? Hello? Kunal?
Yes, sir.
Mr. Kunal? So he's connected.
I think we have lost.
Yeah, yeah.
So second question on the CPP side, the 1.76 gigawatt, majority of that will get executed this year itself, and a part will flow down to the next year.
Thank you. The next question is from the line of Gaurav from Anuja Properties. Please go ahead.
Hi. My question has already been answered. Thank you so much.
Thank you, Gaurav.
Thank you. The next question is from the line of Hardik Gandhi from HPMG Shares and Securities. Please go ahead.
Hello. Am I audible?
Yes, sir.
Yeah.
Yes, sir.
Congratulations on a good, absolutely amazing set of numbers. Just wanted to know some economics about the IPP. I know majority of the questions have been around that. But just to quantify, if I were to start one MW of IPP, how many units will I generate in a year, and what is the decline over the period of the next 20-25 years, given that there is a depreciation in the output?
Yeah. See, one MW IPP, you will generate units approximately 15 to 19 lakh units, depending upon whether it is tracker-based, whether it is a fixed-based, and all those different factors that the panel that you use, all the things. The degradation would be at around 0.42% year on year for the next 25 years. That will be the degradation.
Thank you. The next question is from the line of Vaibhav Lohia from Commercial Finance. Please go ahead.
Thanks for the opportunity. So I wanted to understand two things. What, how are the margins shaping up for the CPP segment for the new bids, and how is the payment collection efficiency right now? Are you facing any delays or something?
Maybe the CPP segment, as I told you, it's around between 22%-22%. And as we move forward, if we get into more utility scale, it will be in that range or a little bit from 18%-20%. Payment has never been a problem. We also get advances in these cases if we furnish with the ABG and all those things. So we are able to get our payments on a timely manner and execute the project also in a timely manner.
Thank you. The next question is from the line of Manoj Nath, who is an individual investor. Please go ahead.
Hello, sir. I have three questions. Sir, are we trying to enter in green hydrogen through KPI Green, and by which year will the same show in our revenue total? Are we currently trying to enter into any international contract, and what is the KPI Green target of installed capacity till FY 2030? As in presentation, only KP Group 10 gigawatt target is mentioned.
Manuj, on the green hydrogen, yes, we are going to get into the green hydrogen segment, and as you know, that if we want to get qualified or want to bid for that, we would require a strong entity. So as KPI has been a strong entity, we might use KPI Green for getting into green hydrogen also. Though we have a separate entity for green hydrogen, but there will be a support required from the big brother of the group, you can say. On the international side, we have already opened an office in Saudi Arabia, and we are also in discussion with other countries. So we are checking into that what are the we would like to go with an EPC or a CPP kind of model, and then slowly, as we establish ourselves, we will go into an IPP model.
Moving on to the target of FY 2030, as you are aware, that 10 gigawatt is at a group level that we have given, but looking at the way we are growing, I think more around 60%-70% would come from KPI and its subsidiaries, you can say, and we might surpass also this target, depending upon the way it is moving on.
Thank you. The next question is from the line of Jitendra Ranga, who is an individual investor. Please go ahead.
Hello.
Yes, sir. You're audible.
Tell me your reason. Yeah.
Yeah, Jitendra.
First of all, congratulations for this solid result. I have queries related to IPP revenue share in the overall revenue mix. So I signed the presentation financial 25. Total IPP was like 13%, which translates to 225 crore of revenue. And for financial 24, it was 17%, which translates to 174 crore of revenue. So as per latest presentation, current IPP portfolio is like 500 MW. So will it translate to around 600 crore of revenue for this year, or full plant will not be commercialized yet?
It is 503 MW if you calculate, which includes my existing 170 and the new 240 Khavda that we have energized, another 50 MW which we have energized. So we expect that the revenue will grow up to we will add a realization of around 50-60 crore on the other sides also. So you can see that it will go up to 350-400 crore this year. If we add more this year and we start the plant early, we will add up to 500 plus kind of a thing.
Thank you. The next question is from the line of Soman Kumar, who is an individual investor. Please go ahead.
All right. Am I audible to you?
Yeah, yeah.
Hello. Am I audible to you?
Yes.
Yeah, yeah.
Yes. So this question is to Mr. Salim. Some people are on IPP, and given that the blended ROC is at around 17%-18%, which means that if we are targeting to grow at 60%-70% growth over the next two to three years, does it mean that there will be shortage of capital, and hence we'll have to raise capital either through debt and equity? Hence, although the growth, overall profit growth would look like 60%-70%, but in terms of EPS, if the capital was to be funded by raising equity, then probably EPS would be far more diluted than the 60 or 70% growth that we are looking at in overall net profit.
Yeah. Soman, the 1.5 gigawatt of IPP what we have shown in our presentation and all, for that equity is already tied up. Whatever funds we have raised and internal accruals that we have earlier, those are kept aside for increasing the IPP portfolio. So now this 1.5 gigawatt is going to happen in the next couple of years. Once we complete that, after that, we'll look into whether going further into the IPP segment after a couple of years, we'll look into how much is the more addition to the IPP. And at that time only, we'll be thinking of increasing the equity portion. But the debt, we have already factored for this 1.5 gigawatt, and accordingly, we have already gotten in principle sanction from majority of the lenders also.
EPS will not fall down because we are not adding any more equity portion or raising any equity for this 1.5 gigawatt.
Thank you. The next question is from the line of Mitesh Vora, who is an individual investor. Please go ahead.
Yeah. Hello, hi. So in the last phone call, there was discussion that SBI had that collateral pledging that we had in discussion to have that removed to get it back. What about the progress about that? And the second question regarding the trade receivable, we see that it is consistently increasing. Anything about some light on that?
See, I didn't get your second question. What is increasing, you said?
Trade receivables.
Trade receivables?
Yeah.
Okay. So first of all, on the pledge side, let me explain to you that the pledge which was given to SBI. We have already given a letter. They are already working on it because since we are one of the all our proposal goes to the SBI board, so it has to run past through a process which is set up by them. So we are awaiting their confirmation on that. So we expect that to get so as early as possible and close it. As far as trade receivable is concerned, I think receivables have improved. If you see the number of days, we were at 150 plus kind of receivables. We have come down to 120. So that is a substantial improvement in the receivables. It's only the number. If you see up to the term, that might be because the growth has grown substantially.
If you compare it with the top line, then it is an improvement in the trade receivables, you can say.
Thank you. The next question is from the line of Manav Agarwal, who is an individual investor. Please go ahead. Mr. Manav, I would request you to unmute your line and speak, please. Due to no response from the current participant, we will move on to the next participant. The next question is from the line of Sanjeev Madra, who is an individual investor. Please go ahead.
Good afternoon, sir. It's really heartening to see such a good set of numbers once again beating the expectations, and congrats to management for it.
Thank you.
My question is on battery energy storage. Is offshore wind, which is for first and fourth place in the earnings presentation. Sir, has the company participated in the tenders for battery and offshore, and for what capacity and amounts? And will battery energy storage system be manufactured by KPI Green itself, or it will be tying up with some manufacturer for another company for its manufacturer? What kind of role basically will KPI have in it?
Yeah. I want to take in here, Dr. Alok speaking. So basically, battery energy is coming up, and KPI is planning to enter this field. But if you know, because there are certain technicalities out there, we are in the process and explore the market because there's the policies there. So KPI is planning to enter this field. We are developing the proto model and everything. So after having developed everything, then after that, we can see that what is the market demands or not according to the wheeling plan. But yes, this type of diversification we have some planning for that. Regarding your second question about offshore, we are already in the planning to this stage, and we have certain development is already going on. And you know that offshore, there's a policy in place, and governments are declaring certain resources.
So at the time of infusion, it's going to this coming in the policy for funding and everything at the particular time, we will disclose the same.
Thank you.
Thank you. The next question is from the line of Soham from RV Investments. Please go ahead.
Thank you, sir. What is the revenue potential of this 1.76 gigawatt of CPP order?
See, 1.76 gigawatt, if you see, this includes order where we have the entire scope, whether it is panel, whether it is windmill, everything under our scope. There is also other utility scale project where the key component like panel or windmill will be in the, what we say, the company scope, not our scope, the developer scope. So it depends upon different projects to specifically mention that what kind of total per average or something. But altogether, this will the order book can go above 3,000 crores.
Okay, sir. Thank you.
Thank you. The next follow-up question is from the line of Pranjal Soni from RRR Investments. Please go ahead.
My question is, when will the IPO of Sun Drops Energy be launched?
Shortly, ma'am. I mean, we already have things. We are in the phase of applying also to the main board. We are also discussing on that. Just waiting for some things to improve, the markets to improve a little bit because we want to be successful. Don't want to get into troubled waters. We don't want to intrude ourselves. We just wait for the waters to settle down, and then after that, we will come up with an IPO. We have done that in the past, and we will surely not let you down this time also.
What tentative time?
Sorry, ma'am?
Tentative time, like four months, six months?
See, I cannot give you a tentative time, but most probably, we have plans to, by end of this financial year, we would like to come out, depending upon the various other market sentiments and factors which will drive our decisions.
Okay. I just wanted to clarify on this actually now that the 5% BESS mandate is in Rajasthan. So in Rajasthan, it is already mandated or it is going to be mandated?
No, it is under the present policy which is declared in the last month. It has been mandated that whoever is going for the solar investment, so the 5% base isn't that embedded facility to be provided.
Thank you. The next follow-up question is from the line of CA Garvit Goyal from Nvest Analytical Advisors LLP. Please go ahead.
Hi. Thanks for the follow-up. I just want to ask on the outlook in respect of the further order inflows that will drive us to FY27 and onwards. Because looking at the current order book, we are pretty much confident, and you are also providing the guidance for FY26 . But if you can put some color on the order inflow that we are expecting in FY26 ?
Yeah. I just answered this question a couple of minutes back, but just to highlight that we already have bid pipelines where we are confident we will be winning those pipelines. So I think by end of first or the second quarter of this year, you will be able to see that the entire EBA 27 will be booked.
By the end of what?
By the end of first or second quarter of this year. You see that the entire order book will be further going up because we have a lot in the pipeline, and we are very positive that we will be winning these tenders.
Got it. Thank you very much. Thank you.
Thank you. The next follow-up question is from the line of Rajit Gupta from Rajit International. Please go ahead.
Yes. Thanks for the opportunity. My question is, until when we hope to start generating the free cash flow, and what shall be the CapEx this year, and what shall be the possible source of that CapEx? Thank you.
Free cash flow, I mean, if you see, this year also we have generated positive cash flows. Okay. And as far as the CapEx is concerned, approximately around INR 4,000 crore of CapEx is expected to put into the IPP of 1.1, which will be in a phase-wise manner. This year, a portion will go, and next year, some portion will also go.
Look, this year, I don't think we have free cash flow, sir. Is it?
We have INR 200 crores of free cash flow if you see the cash flow statement.
That shall be the net cash flow, perhaps, but the free cash flow, that means after.
No, no. That's for the operating. If you see the operating cash flow from operating activities, INR 208 crores this year we have done.
Yes, but that's already infused with the working capital requirement, and we have already liquidated with the QIP. That is also invested and infused with the working capital and capital expenditure.
If you see, cash flow from investing activities is 1,587. That is major investment in the IPP plan. And cash flow from financing activities, the QIP and everything is 1,806 crores. That is a separate cash flow. And only from operating activities we are seeing. So if you see the net increase in the cash and cash equivalent has been 427 crores. If I add the opening of the last year, altogether, we have 597 crores of cash and cash equivalent at the end of the year.
Thank you. The next question is from the line of Mihir V. Kotwal , who is an individual investor. Please go ahead.
Good evening, sir. Congrats on the strong set of numbers. My first question was a little technical. So if you see, in our presentation, we said that we produced about 25 crore units, and our realization was about INR 3.08 per unit. So that would take me to about 75 crore of revenue.
No, no. I'll just explain to you. We have 170 MW of plant where we have signed PPA with C&I customers. That is corporate and industrial, which includes some of the top names like L&T, Colourtex, UPL, Tata Motors, Indian Air Force. These PPAs are differently designed. They are like whatever unit rate the company pays, we will give them 7% to 8% to 10% discount on that. So in those PPAs, I am earning 8 to 9 rupees at a gross level. And the other PPAs which I am doing with government, there I am earning 3 or 4. So that's why if you see that's a huge jump that we see in the unit vis-à-vis the revenue from those units.
Right, right. Because it seemed to be like a mismatch.
And second thing is in our long-term vision, when we are looking at 10 gigawatts, how much do you see this coming from out of Gujarat?
See, majority will be from Gujarat because we are placed in Gujarat. We are one of the leading players in Gujarat. But I think at least 40-odd% should come, 30% to 40% should come from out of Gujarat, like states like Odisha, Rajasthan, Madhya Pradesh, where we have signed the MOUs and Maharashtra also.
Thank you. The next follow-up question is from the line of Rohit Singh from Nvest Analytical Advisors LLP. Please go ahead.
Hello. Am I audible?
Yes, sir.
Yes, Rohit. You're audible.
Sir, you mentioned we are going to receive big orders in Q1 and Q2, which will drive the growth for FY 27. So can you put some color on in which area are these orders going to be and what kind of margin profiles are we expecting from these orders?
See, these are utility-scale projects where we will build. We call it an EPC or a CPP business that we are going to add. IPP is already tied up, so 1.5 new IPPs are going to come. The margin would range in the range of whatever we are looking at, 15%-18% at a utility-scale project. This will be majorly from either any big government entity or some conglomerate.
Got it. And for next year, if we are going to execute IPP contracts, so can we expect a further improvement in net margin in FY26 over FY 25?
No, as I told you, naturally, the moment I energize the IPP contract, IPP plant, and it starts generating revenue, the IPP EBITDA is around 85%-90%. So it will naturally strengthen my margin as I keep on adding more and more. But only that there is a mix of IPP and CPP. The CPP is EBITDA is lower compared to IPP. So automatically, they get diluted. And overall, EBITDA what I get is around 30%-33%. So the more I add IPP, naturally, it will strengthen the EBITDA and the fact. The more I add CPP, it will a little bit reduce the margin to a smaller extent.
Got it, sir. Thank you.
Thank you. The next follow-up question is from the line of Kunal Mehta from Pineapple Capital Advisors. Please go ahead. Mr. Kunal, I would request you to unmute your line and speak, please. Due to no response from the current participant, we will move on to the next participant. The next question is from the line of Rakesh Banerjee from RAP Capital. Please go ahead.
Sir, recently we came across one report from Ministry of Renewable Energy. Therefore, we found that there are around 30 gigawatts of renewable energy which are lying and yet to be used because no power purchase agreement has been signed. Now, in that context, we know that we have around 1.5 gigawatts of IPP forthcoming, so do we have any definitive contract? If we have a definitive contract, is there any cancelability clause within that, so wanted to have some color from you regarding that, especially considering the 30 gigawatts of excess capacity in IPP where PPA could not be signed with any discoms or other counterparties.
Yeah, Rakesh. Rakesh, if you see, we have 1.5 gigawatt where we have already signed the PPA. And these are signed with GUVNL. It's one of the best paymasters, or you can say that it's A-rated by ICRA. In terms of the discount if you compare with other discoms. So we are selective. We sign where we know that the counterparty is very strong and is cash rich. Then only we sign the PPAs with them so that we don't get into because there is a lot of CapEx investment that has to be done. As far as IPP segment is, and I understand there is a 30 gigawatt, but we have to take decision depending upon the other factors like how much equity has to be infused, how much debt has to be taken, and how it will impact our profitability margin, the ROCE, ROE than what we have been hearing.
So we have to trade between all these factors and then only take. But at present, we are comfortable enough with 1.5 gigawatt. As we start completing that slowly, slowly, we'll take a call on the availability of what extra is there in terms of the sector has to play.
Fine, fine. That is the IPP.
Yeah. Rakesh, just Dr. Alok, that's also what to add to.
Just, Rakesh, just to clarify that rightly, you have pointed out about 30 gigawatts. There is some sort of news there. Obviously, KPI, as Salimji was telling, that we are very determined for the local utility company where we are going for a bidding process and all. 30 gigawatts probably based on the market demand. Obviously, it could be a CPP connectivity where the Power Sale Agreement, PSA, is under discussion. Probably that could be a figure where 30 gigawatts are coming in the media.
Okay. Okay. And sir, regarding the IPP of 1.5 gigawatt that we are going to do, sir has already alluded that we'll be requiring around INR 4,000 crores of investments overall. And we see that this year INR 1,800 crores has been already invested. Our bank balance or cash equivalent is almost around INR 597 crore, which makes it INR 2,400 crore. So what is the source of the rest of the INR 1,600 crores? How are companies planning to bring this additional INR 1,600 crores to complete these IPP projects?
Yeah. So, Rakesh, we have already infused the equity portion. We already have an equity portion that is 25%. We go with a mix of 75-25, 75 as a debt and 25 as an equity portion. So for the rest of the 75, we already have in principle sanctioned from some of the top lenders of the Indian economy, you can say, or the infrastructure lenders which are there. So we are quite confident that we will be able to get these funds also released in a short period.
Thank you. The next question is from the line of Samrat Shah, who is an individual investor. Please go ahead.
Good evening, sir. Congratulations. I think INR 100 crore plus PAT for a quarter, and it is a tremendous achievement for investors like me that have been invested in this company since INR 180 crore of market cap, and now the company has grown up to INR 8,000 crore, so it gives me a great pleasure. Congratulations for that, sir.
Thank you. Thank you, Samrat. Thanks for the very good work.
Yeah. I have a couple of questions, sir. Firstly, regarding if you see the 2020, 2021 interviews of Farukbhai, he has told that you would be achieving one gigawatt of capacity by calendar year 2025, which is this year. So out of that, you've done nine as per the investor PPT. So whether that one gigawatt would be achieved as guided is my first question in this context.
Yeah. Let me answer your first question. Dr. Faruk will always speak about. He speaks about at a group level. Like 10 gigawatt is also spoken at group level. So 1 gigawatt, which he spoke at the time, was at a group level. So we have already at a group level, we have already surpassed that long back in FY24 itself. So the commitment usually is at a group level that we have done. Yeah. Your second question.
Yeah. Second question was on, sir, the risk of with this business. The context is a couple of months back y ou were citing that 66 MW order got canceled from Saib andhan Infinium. I wanted to know not about this particular company, just the reasons for which an order gets canceled. Because you have long-term PPAs, so the orders are not easily cancelable. So how can we expect an order to get canceled, or is it just a one-off case?
See, Sai Bandhan was not an IPP project. There was no PPA signed. It was an EPC project. Okay? So we call it as a CPP. Saib andhan, which we canceled it from our side because of the issues on the designing side. The customer changed the design, and there were issues on his funding because he was tying up for a funding, and the financial closure was not happening. So we didn't want to get stuck in the middle where we have completed a part of the project, and the entire project is held because of his incapability of raising funds for his project. So that's the reason we saw that it is not forthcoming in a proper way. So we said that we should cancel this order.
This is one of the orders that we have canceled on account of the end-use customer's inability to raise the funds and other facts.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Ritvik Chauhan for closing comments.
Ritvik.
Thank you, Tejal, and once again, I'd like to thank all the investors and participants who joined us on this call. We're very pleased to have had a very strong quarter and a strong year. Thanks again to our Group CEO, Dr. Alok Das, and our Group CFO, Salim Vora, for taking us through this. Please reach out to us in case you have any further questions. We'll see you again soon.
Thank you. On behalf of Share India Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.