KPI Green Energy: PAT growth of 48% & revenue growth of 59% in FY24 at a PE of 68

Strong revenue visibility based on orders in hand at 4X of execution in FY24

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1. Renewable power generating company in Gujarat

kpigreenenergy.com | NSE: KPIGREEN

Generates and supply power as an IPP and CPP

2. FY20-24: Revenue CAGR of 124% & PAT CAGR of 104%

3. Strong FY23: PAT up 154% & Revenue up 180% YoY

4. Strong 9M-24: PAT up 52% & Revenue up 59% YoY

5. Q4-24: PAT up 36% & Revenue up 59% YoY

Good quarter but weak compared to rest of the quarters in FY24

6. Strong FY24: PAT up 48% & Revenue up 59% YoY

7. Business metrics: Strong & improving return ratios

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Debt Management thru raising equity via QIP to manage debt to equity while interest coverage ratio has reduced.

8. Outlook: Order book 4X+ FY24 execution

i. FY25: Strong revenue visibility - Order book at 552 MW

Order book at 552 MW as of FY24 end vs the 132 MW capacity energised in FY24. The visibility of the order book is 4 times the FY24 run-rate.

9. PAT growth of 48% & revenue growth of 59% in 9M-24 at a PE of 68

10. So Wait and Watch

If I hold the stock then one may continue holding on to KPIGREEN

• Coverage of KPIGREEN was initiated after Q1-24 results. The investment thesis has not changed after a strong FY24. KPIGREEN has delivered the strongest revenue vs PAT in FY24

• One needs to watch out for the margin contraction seen in Q4-24. Strong growth can cover up for the margins but this needs to be observed.

• Strong order book is providing confidence of a strong FY25 and providing revenue visibility.

11. Or, join the ride

If I am looking to enter KPIGREEN then

• KPIGREEN has delivered PAT growth of 48% & Revenue growth of 59% in FY24 at a PE of 68 which makes valuations rich with limited upside opportunities in the short term.

• Strong revenue visibility based on orders at hand. Order book at 4X the FY24 execution. Order book creates opportunity for future upside in stock.

• At a PE of 68 margin of safety is not high. One weak quarter and the impact would be clearly seen on the stock price. Additionally a good quarter like Q4-24 may not be enough to sustain the price at these valuations. Excellent quarters are needed to sustain valuations

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Previous coverage of KPIGREEN

KPI Green Energy: PAT growth of 52% & revenue growth of 59% in 9M-24 at a PE of 63

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