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KP Green Engg.
Our verdict on KP Green Engg. isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The company now reports a total visibility of INR 2,200 crores, consisting of a confirmed order book of INR 1,100 crores and an equivalent pipeline of INR 1,100 crores. (1 exceeded across 1 tracked commitment)
“Deepak, as on date, the pipeline is equivalent to the order... basically, it is INR1,100 crores.”
The company exceeded its EBITDA margin guidance for FY25 and met the upper end of its PAT margin expectations. (2 exceeded, 2 met across 4 tracked commitments)
“one thing we can tell you that we are able to sustain our existing margin, which is EBITDA of around 15% to 16% and a PAT of around 10% to 11% to 12%.”
See the full cited Management analysis of KP Green Engg.
How durable is the business?
The company is seeing massive growth in renewable infrastructure, securing its first export order from a U.S. solar tracker manufacturer and maintaining a strong pipeline in the sector. (5 expanding across 1 engine)
“So 50% of the order book is from solar, that is renewable energy, solar and wind, you can call it.”
The segment is expanding into new infrastructure areas, notably becoming the L1 bidder for a railway division tender, signaling entry into railway heavy engineering. (3 expanding across 1 engine)
“30% is from transmission line, that is GETCO and all those kinds of transmission and evacuation.”
See the full cited Business Model analysis of KP Green Engg.
Where does growth come from?
Capacity expansion is accelerating with the Matar plant operational and a massive 1,68,000 MT unit under trial production. (1 accelerating, 4 new trend across 5 signals, 2 leading indicators)
“A major value driver for us is Asia's largest galvanizing plant, which is now under commissioning... once this facility becomes operational, it will bring a strong positive impact on our production efficiency.”
The company is exploring new product lines in Green Hydrogen and Offshore Wind, marking a new strategic trend for long-term growth. (3 new trend, 1 steady across 4 signals, 1 leading indicator)
“MOU signed with Govt. of Gujarat for ₹8000 Crores during Vibrant Gujarat Regional Conference To develop Hydrogen & EV fuel stations across the state”
See the full cited Future Growth analysis of KP Green Engg.
What could break the thesis?
The risk is STABLE but management is actively diversifying into non-renewable infrastructure like Railways and Road infrastructure to mitigate this. (1 stable, 1 high-severity)
“The company have achieved a substantial market presence across multiple sectors viz. renewable, power & transmission... Aligned with India's growth in renewable energy and infrastructure”
The risk is easing as the company is actively diversifying its client base. Management stated that their target is to limit group company supply to 30%-35%, with 70% going to external clients like GETCO and Railways. (5 easing, 2 high-severity)
“Together, it has become approximately INR1100 crores of order book. So, out of that, 50% is internal and 50% is external.”
See the full cited Risk analysis of KP Green Engg.
Read the full thesis on KP Green Engg.
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