FY26 closed 56% YoY (vs 60-70% commit).

My question is on the sector level, like, do you see any change in the sector which can negatively impact KPI Green, like the current environment we are seeing? There is a change in stance by government on the waiver of ISTS charges, right? So, do you see any impact of this on a newer order inflows in the industry and thus impacting the KPI Green? And for that matter any kind of negative stance that the government is taking?

Yes, Garvit, this is Dr. Alok speaking on KPI. Thing is like this, whatever we are doing the project today, it is restricted to state bidding only under STU. While going forward, your question about ISTS, that benefit which is sunset has happened month of June. So, if you see that policy, it is a trajectory. So, if there is a project beyond 2025, so first it is 100%, then 75%, then 50% that type of trajectory is there. So, obviously, if any project is coming to the ISTS, so obviously there is some delta decrement is there while they are taking into your tariff coating in the bidding process. As far as the KPI is concerned, we are not even today participating in any kind of ISTS project. So, we are insulated for that.

On the guidance part, this quarter was pretty decent despite early monsoons and all. Do you think like we will be able to easily outperform the guidance that we have given earlier for this year?

Yes, Garvit, I got your point. So, Garvit, if you look at this quarter also, we have done 60 to 70% of growth on all the parameters, whether it is revenue, whether it is profitability and everything. So, we are pretty much on the line, and we are quite confident that we will be able to touch the guidance which was given by our Chairman & Managing Director, Dr. Faruk sir. So, we will be able to achieve that most part.

We have seen that the rainy season has been a bit more in the Q2. What kind of execution are we seeing in Q2? Will the seasonality hit us in Q2 versus Q1 now?

If you see the seasonality in the solar or we say renewable energy, the rainy season, there is less of execution that you happen to see usually all across the sector. But what happens, there is also a component that we can build, the supply component during that period. So, we are that we will be in line with what we have shown in the past. The quarter 2 will also be in line with what we have done in the previous year quarter 2. So, yes, there might be a slight curtailment because of the rainy season, but we will be able to cover it up going forward.

On our PAT margins. As we are now ramping up even our IPP execution, what kind of PAT margins can we like expect?

Yes, IPP, if you look at my IPP portfolio, as I go forward, my IPP has an EBITDA of around 85% to 90%, the upcoming IPP project, which I have already set up now, and the new upcoming projects also. So, IPP adds to the bottom-line. So, we expect that as we increase the IPP component in our revenue mix, our PAT margin, we will be able to sustain our PAT margin what we are showing.

For the next few years, we expect a 50% to 70% growth, I am assuming let's say 60%. So, what kind of PAT margins can we see on the 60%-70% growth trajectory?

Even if 60%-70% growth, see my IPP is what we say is fixed with the PPA rates, my PPA rate won't change and my IPP provides me strong PAT margin. So, accordingly, I don't see too much curtailment into the PAT margin, but it will be in the range of 15% to 20%. That is what I see. Today, it is around 16%-17%. So, we will be able to maintain that.

What is the risk that we are seeing internally that can go wrong? Because there is government involved and there are delays by government that is normal. So, that is an uncontrollable for everyone in the industry. But apart from that, what kind of negative risk that we see that cannot be sort of, that we may not be seeing right now, but the management is able to see it better?

In any renewable energy project, the major risk that is the execution rate. And in the execution rate, the two main components or the hurdles, I would say, are the availability of the land and the evacuation, that is the transmission. And these two things, if you see, at present, I have three plus gigawatt of evacuation approval with me. I have 6,000 plus acres of land bank available with me. So, these are the major. So, I do not see, after that execution capability, we have more than a decade or two decades of experience in execution on the ground level. So, if I see the probability of any hurdle getting created is very less, very less. I mean, success rate may be around 95% to 96% or over and above that I do not see any other factor because even the PPA that we have signed are 25 years long term PPA, they are signed. So, those are also into the play. So, I do not see any. And the counterparty is GUVNL, Gujarat Urja Vigasm, which is a top most A rated discom out of all the discoms that are there in the country.

In the ICRA rating report, they mentioned that for one of the IPP, the project cost has increased by Rs. 700 crores, if I remember correctly. Any reason for that?

See, what happened is, when we first calculated the project design, when we did the first design, it was a tracker-based design. So, at that time, the AC-DC ratio was 1:1 only. Later on, when we saw that the land was getting bifurcated into multiple small pieces, so then we had to go for a fixed design. So, for getting the same PLF in the fixed design, we had to increase the AC-DC ratio. So, now the AC-DC ratio is 1:4. So, because of that, the cost of the project got a little bit higher compared to what it was calculated earlier.

So, does it mean we also get higher PLF, and hence higher realization or revenue remains the same?

No. What happens is that your revenue also will increase, not to the extent of increase, because what happens when you do a tracker-based, you get a PLF around 23% and when you do a fixed, you get a PLF around 19% to 20%. But the number of panels increases in a fixed base. So, automatically, but still, I mean, the fixed base will have a higher revenue compared to tracker-based revenue.

IRRs will get impacted but very minimum impact?

IRR will slightly improve.

For BESS business, if you can give some color, how is the group looking at it. Will KPI Green be the vehicle for BESS business? What is the potential that we see and any targets that we have for BESS going forward?

Yes. So, BESS, we have targeted our subsidiary, Sun Drops Energia Private Limited, for setting up the BESS business, so that we have a focused approach over there because of smaller project and BESS we will start with a smaller project. So, as per our management thought process, we will push majority of the best business with Sun Drop and a bigger utility scale project if it comes, very high big utility scale with big institutions, then only we will put that in the KPI. But overall consolidation, it will happen at a KPI consolidated.

I wanted to know about one subsidiary we were planning to list some time. I wanted to know why we are keeping so many subsidiaries which again are in the same line of business doing EPC for solar and want to list it separately. Why don't we keep it as it is like we have other subsidiaries as a whole owned?

Okay. Let me just explain you. If you look at any of the bigger players, whether it is Adani, whether it is Adani Green Energy or whether it is Mahindra Renewables or Aditya Birla Renewables, these people have separate SPVs which you can call them as a subsidiary, 100 percent SPVs. So, the reason for that usually is that they have a special separate project, have a separate SPVs or a subsidiary. In case of KPI, that's the phenomenon of this particular characteristic of this business because capital intensive business, every banker or lender would like to have a ring fence kind of situation where they can target their own assets or look after their own assets. In case of KPI, we only have the major subsidiary that we have was KPIG Energy and Sun Drop. And now we have added K Park where also the plant is there and Miyani where we have the connectivity. If you look at the KPI now takes into its fold only the utility scale or a bigger size project where we have signed PPAs with GUVNL or we are doing one big project of CIL and everything. When it comes to 0 to 35 megawatts, those kind of projects and best projects will be taken into Sundrop. So, they have a clear-cut demarcation and 35 and above till 100 megawatt, we will be putting into KPIG Energia. The reason is that these are different customer sets and accordingly we have kept it differently.

So, what were the subsidiaries which we discussed last call that we will be like planning to list again?

That is Sun Drop Energia Private Limited and hopefully I mean we will be listing that. We have already started the process of collecting the documents and everything. We will be filing the DRHP for that subsidiary.

On the IPP project where you said that as per the credit report Rs. 700 crores cost escalation that was on one particular project or it was on a whole for IPP what we have on hand?

No, the project which I told you know 250 megawatt and 370 megawatt, for that project the cost escalation. It's not an escalation it's what we say it's not a cost escalation, it's a change in the design and that's why the cost has been as per the design. So, it is not what we call it as a cost escalation. That is the price of that design and this is the price of design. So, for example if I want to say earlier it was BMW and now it is Mercedes. So, the Mercedes will have a higher cost compared to BMW kind of a thing. So, it's a design change not a cost escalation.

I just want to know the timeline of completion of our 1.2-gigawatt IPP and 1.8 gigawatt CPP.

See September 26 is our timeline that we are targeting. So, hopefully we will complete that 1.2 gigawatt of DC capacity that is 250-370 AC capacity.

What about the order book value of the 1.8 gigawatt CPP?

Around 4,000 plus crores. This is the order in hand what we are talking 1.8 gigawatt. So, it is an unbilled order in hand. It will be billing on the milestone basis. So, I mean you cannot compare the execution capacity vis-a-vis the revenue because every milestone has got a different, for example there might be a service portion there might be a supply portion. So, it will be difficult to calculate but overall 1.8 gigawatt comes up to 4,000 plus crore of an order book altogether.

Your PPT is very informative and it gives all almost all the things that one would need to make up one's mind about the investment prospects. However if you could add operational data like how many megawatts was delivered in the quarter in CPP and also the revenue breakup between CPP and IPP that would further educate people like myself.

Yes, I understand. It is not immediately apparent because we give the total revenue and since the total financials or the P&L or what we say the income statement is uploaded on the BSE and NSE there we have clearly mentioned what is from the IPP from the sale of power, from the sale of plant. So, it is over there. Nevertheless we will try to add it over here also that it gives more clarity to you.

I felt that some further elaboration was required. That is if the cost goes up the PPA revenue will not go up. So, if the cost is going up then how the IRR will not suffer. I would think that the IRR would come down if the cost goes up and the revenue remains the same.

No. I think there was a little bit understanding issue over here. I am saying the cost goes up accordingly the revenue because the PLF also goes up. There's a difference between fixed and tracker based you know what we say the solar systems. In case of tracker base you have a PLF of 23% and in case of what we say fixed it is around 19% to 20%. Now what happens in tracker based we do 1:1, that is every 250 megawatt I will put the panel up to 250 megawatts only. But in case of fixed because I have to achieve the PLF that was given that I have to achieve. So, in that case I increase the number of panels. So, as I increase the number of panels the cost goes up but simultaneously it will have more PLF compared to what all together the tracker based will give you. So, here it is 23, if I do 1:4 that is one panel will have a 0.4 additional panel. So, automatically number of panels increases the generation increases automatically the revenue will also to that extent increase and simultaneously the IRR will not get impacted too much.

The Company has an ambitious target of 10 gigawatts of portfolio. So, could you help us understand the revenue potential from this and especially how much of that is expected to come from IPP versus CPP segment once they are fully commissioned? And also is there an average per megawatt revenue realization or a benchmark you work with for IPP versus CPP projects?

See, at present if you see my IPP-CPP revenue mix is around 12% to 13% last year it was against IPP and against which CPP was 86% to 87%. Going forward we have an ambitious target of 10 gigawatts in which we plan to have at least 25% of revenue coming from IPP business and remaining 75% from the CPP business. If I tell you the existing IPP that I have in hand if I calculate all together my average will come around Rs. 3.5 or Rs. 3.6 per unit because I have almost 1,511-megawatt DC capacity which is upcoming. So, looking forward at 10 gigawatts also we like to maintain that Rs. 3 per unit kind of average for the revenue. Now it depends upon the mix of IPP and CPP as we go forward for the 10 gigawatts.

While your EBITDA margins improved quarter-on-quarter, they were yet down year-on-year. Could you walk us through the key drivers of this volatility and your approach to margin stabilization going forward?

This is an important thing we need to understand is the seasonality of the, that is for the IPP and for the other CPP also, there is a seasonality. So, what happens when we have, we build on a milestone basis. So, when we build the service component, at that time my margins are a little bit higher and when I build the supply component or the material component the margins, so there is depend upon the way I do the billing, my margins will keep on rotating on in some of the quarters and at the final it will be at around PAT margin of 16% to 18% kind of a margin.

What would be the rate of the new green bonds at which we are issuing?

I think today only we have uploaded the rating, AA plus from CRISIL and another rating agency has also given. So, you can understand is the second highest rating after AAA and which is one of the best rating when it comes in, so we are we have yet not decided on the rate but we will try to get the lucrative rate from the market because this entire bond is guaranteed by Garenco which is a AAA entity when it comes to Indian rating. So, most probably we will try to keep it as lean as possible so that we can get more benefit out of it. If you ask any CFO, my ballpark will be 0%. I would like to get it at a 0% but most probably looking at the current market I somewhere around 8.8% or something we would like to close it.

For this kind of project that you spoke about 3,000 crores pipeline for which we will be bidding for, the technology part, will it be in-house technology for KPI Green?

As I said in my opening remark, we have already signed a MoU with Delta. So, we have collaborated with Delta specifically for this BESS technology, so our association will help us to cater to the latest technology in the BESS for from Delta.

On this subsidiary listing, we mentioned about we will be listing it separately. Will the existing investors get the shares of this subsidiary because otherwise it will lead to earnings dilution, right?

Okay. If you look at, there is no system which I think KPI is the holder of this Company, okay. When it does the listing, it will dilute 25% and that will be in the open market. So, yes, you can apply from the IPO section and then if you're lucky, you can get the shares directly also from the market. At any given point of time, we will see to it that KPI Green holds more than 51% in Sun Drop.

This Rs. 3,000 crores-Rs. 4,000 crores that we said pipeline is for BESS right? And beyond that the typical solar and hybrid that we do, what is the pipeline for that?

Right. Pipeline for solar and hybrid might go up to 4,000 to 5,000 another. What I am talking is pipelines that where we are tenders where we are bidding, talks that we are doing for. So, around 4,000-5,000 any given point of time, we have 4,000 crores-5,000 crores of pipeline where people are discussing, my BD team or tender team is working on it.

Back-to-back in the 4-5 days, we had announced 4 subsidiaries, I am forgetting the name, the same name and then 1,2,3,4, what were those subsidiaries catered for?

Those are for getting the evacuations in different states. So, as we are expanding to different states, we need evacuation in the state, so that's why we have to form separate companies for getting those evacuations.

This 1.2 gigawatt IPP which is in a working progress we have shown in our PPT, this will be added by September 2026, right? So, this 1.2 will be added in one go or we will be having in a phase manner?

It will be in a phase wise manner. So, we will start adding it from this financial year and we will keep on adding to the next financial year.

By FY'26 end, this year end, what installed capacity will we be having in IPP, we are expecting like?

So, all have in place is around IPP. If you see, 171 plus 240 plus 50 and that is with DC capacity, 503 megawatt that is existing capacity that we have plus 1.2, so it will be 1.7 gigawatt kind of a capacity that will be there. For this financial year, it depends upon our execution run rate. So, the execution run rate can be different at different times depending upon the seasonality also, but at least we plan to have half of this capacity of 1.2 gigawatt to get before this financial.

On the unit generation side sir, last year Q1 what installed capacity did we had?

So, last year if you see, my capacity was around 171. See, if I talk about the running capacity, 171 megawatt was up and running. The new capacity which I installed during the last quarter was 240 and 50. So, altogether 240 and 92 megawatts. So, this capacity have the capacity of generating unit of Rs. 65 crore units, but this will come in the upcoming October or post September because the COD of that particular of the GSS what we call as government substation is going to happen by September. So, post that, this will also be updated. This time what we generated unit of 6.9 crore unit, they were generated from our existing 171-megawatt capacity that we have already running.

I was actually confused. In the PPT, I read that so far we have installed around 1 gigawatt of capacity. So, within that, how much of it is getting utilized so far? That is one. And what is the split between CPP and IPP thus far in total and aggregate that is one. Second is, I want to understand the revenue unit economics, that is revenue per megawatt in CPP and revenue per megawatt in IPP.

If I go line by line, your first question was about the utilized capacity in this particular. So, as I told you particularly in this particular quarter if you see, I have energized out of portion where the generated revenue is 171 megawatts. Total capacity of the IPP I have is around 0.5 gigawatt that is 504 megawatts. But out of that, 240 and 92 was something which was energized in this quarter only. So, the revenue will start coming from the third quarter onwards. This 4,000 crores or 1.8 gigawatt it includes order with panel and without panel also. In some cases, I have orders, they are only BOP orders you can say that is without panel. So, I don't think per megawatt you can say 2.4, it is around 3.5 to 3.25 kind or maximum 3.75 on the solar side. On the wind side, 1 megawatt can go up to 7 crores to 7.5 crores.

So, basically EBITDA for the whole firm for this quarter somewhere around 30%-35%, 34% to be exact and then you say that 75-80 is the EBITDA for IPP, right? So, if I just back calculate EBITDA for CPP will be somewhere between 30 and 35, is that correct?

No, EBITDA would be somewhere around 20 for CPP. See you need to, you can't look at you have to look at the weighted average. How much is the contribution of the CPP and how much is the contribution of the IPP. Then only we will be able to tell, but roughly if I want to calculate my EBITDA for IPP would be around 75% to 80%. And my EBITDA of CPP around 20%. So, blended EBITDA will be around 30% to 32%.

I wanted to know about the debt level as of this quarter. I can't see anything on our PPT. And with the upcoming Rs. 700 crores NCD, what will be our debt to equity ratio and that we will be still maintaining 1.5 as communicated earlier?

My present debt level in this quarter if you calculate, it will be 0.5:1. That is I am very low leverage you can say. With the NCD and upcoming project also, we will not cross 2:1. So, we are very much in a comfortable position in spite after doing the CAPEX and everything.

As we have good orders in hand, what kind of revenue growth we are targeting for FY'27?

As we told, whatever we do in FY say, like last year we did 1,700. So, you can count 60% of growth from there to '26 and again 60% growth from there to 27% because we have huge pipeline also.

With similar PAT margins, 16% to 18%, right?

Yes. We will try to maintain slightly here and there but we will try to maintain the PAT margin.

My question is regarding the net profit margin, we are maintaining a steady margin of 18%. Now if you have given the guidance of IPPs are going up from 13% to say 17% to 18% for this particular financial year and overall target is of 25%. Shouldn't the net profit margin also have an expansion?

See, if you see the first quarter margins because of a lot of service component, the first quarter margins are usually on a higher side, then second quarter it little bit tapers down as I explained in previous question also. So, we will be able to maintain the margin. The more we do the IPP, it will help me to maintain the margin and not grow the margin because accordingly CPP, correspondingly CPP will grow substantially also at the same time because we are going 60% to 70%. So, my CPP has to grow. So, to net of that growth of CPP, CPP is earning me around EBITDA of 20 and IPP is around 75% to 80%. So, to net of that growth of CPP, I have to increase my IPP also. So, IPP again, I mean the margins will be maintained. For the maintenance of margin, we are increasing the IPP also simultaneously.

You have mentioned that we have evacuation of around 3 gigawatts and land parcel of around 6,000 acres. Does this include the September guideline that we have given? The orders that we will be executing by September 2026? Is this inclusive of that or is this over and above that?

This is inclusive of September also. Whatever orders we have, this 3.2 gigawatt include that one point whatever we are executing right now. Yes, but evacuation acquisition and land acquisition is a real-time process. Every day, I mean there is some or the other which is added to this, and we keep on adding this. If you see my presentation, there is a track which is shown about the land acquisition over a period of time and also of the evacuation. So, it's a real process, we keep on adding this more and more, quarter-and-quarter year-on-year we will be adding more because we focus on the pipeline that we have and accordingly we have to keep our resources ready for the pipeline when it converts into an order.

You have mentioned that for the next 2-3, because we will be doing a lot of capital raise from debt and from IPO proceeds. So, this is the promoter holding that is now stable. Do you think the stable promoter holding will be for the next 2 to 3 years?

Yes. It will be around. At present, KPI promoter is holding 48.70 something and it will be stable for next couple of years.

I have heard of some of the contracts that have gone to the competition, on the BOO model, right? So, the thing that I want to understand is, like in IPP wherein we own the asset as compared to CPP which is basically any piece of work that we do for them, right? Similarly for BESS when it is coming on BOO, would we have to do capital investment. So, hypothetically if you are targeting a revenue of around Rs. 3,000 crore, does it mean that we would be investing this Rs. 3000 crore upfront and then it will be recovered from the utility?

So, on the BOO what we look at, it's a build and operate and own kind of a model. Now in this it is the battery is a service we provide. Okay, so for that the battery entire system is to be built by us. That's the reason we are coming with an IPO in Sun Drop and we are raising the equity over there, so that we can invest that much funds over there and naturally when it build on operate and own, it will automatically be on your books and we will be raising in Sun Drop for that particular. At present, Sun Drop doesn't have any too much of debt and everything but which as we grow that if we happen to click the entire 2,000 crore or 3,000 crore of orders execution. So, mostly it will be on our books only.

My question is more on the industry. If the government has invited the bids again for the tenders that have gone to Gensol, and if KPI is participating in those?

See, a few of the tenders the government has already, I mean which was recently, but it was very low. We participated but we didn't go aggressively with that. So, government is already, I mean NTPC tender which was won by Gensol is already out in public and it's already won by I think Sterling and Wilson and so that is open in the market.

I wanted to understand more about our evacuation capacity and the transmission lines. There were certain reports in the media where it says that around 25% of projects in Gujarat and other states were stuck because of the transmission lines delay or other problem. So, when we say we have enough evacuation capacity that means we have already the infrastructure for evacuation in place or those things we are going to plan or do?

So, for us, that is not an issue because we have already 3.2 gigawatts evacuation with us and the more in Gujarat especially the government of Gujarat, they have already planned for the five years Rs. 1 lakh crores investment in the transmission line and all over India also the government are thinking on this way only and they are making the very heavy infrastructure for the transmission line because the transmission line is not the new issue, it is a from the beginning it's like a road. You are manufacturing a car but if your road is not there who will be there, there will be the traffic. But in our case, in your Company, you are safe enough and still say 2 to 3 years expansion you have already taken in your portfolio and the say discom or GETCO. So, there are two transmission lines, one is GETCO and one is Discom. So, discom always there are some small issues comes, and we resolve and in GETCO is a big transmission line means there you can get it one year before or say two years before like that. So, I think in your Company, transmission line or evacuation is not an issue.

On panels like can you let me know how is the prices are for us like say we buy only Indian made, so how it is trending for us?

We always, in panel also we have the panel of 1.7 gigawatt already. We hedge on today's rate. So, in future if the rate goes up, we don't have a problem and if there is something from any other side, also we don't have a problem because all Indian manufacturers.