KPI Green Eyes Larger IPP Portfolio to Fuel Earnings

Indian clean energy EPC firm KPI Green Energy has now planned to boost its Independent Power Producers (IPP) portfolio to increase its revenue. This is seen as a transition from its current predominant portfolio of developing captive renewable energy projects. The top management of the firm recently discussed their roadmap for the firm’s journey in a recent investors’ call.

Currently, about 87 percent of KPI’s revenue comes from faster-turnaround captive EPC projects (CPP), while only 13 percent comes from the IPP portfolio. Chief Financial Officer (CFO) Salim Yahoo of KPI Green explained that IPP projects carry much higher profit margins.

How IPP Can Aid KPI?

“IPP brings in a strong EBITDA margin of around 85 percent to 90 percent, and CPP brings around 20 percent to 22 percent. Combined EBITDA margin [today] is around 32 – 33 percent,” he noted.

The company’s goal is to increase IPP to about 25 percent of the revenue mix in the coming years for higher consolidated margins.

To fuel this transition, KPI Green has 1.5 GW of IPP projects in its pipeline under execution. These are poised to commission in phases over the next couple of years. As each phase comes online, it will add to the company’s steady annuity-like income – IPP power purchase agreements typically run 25 years.

“From the third year, you can see the revenues of this IPP flowing strongly… FY ’27–’28 will be the first full year where we get the entire 1.5 GW revenue,” Yahoo noted. This ramp-up is projected to significantly boost EBITDA and PAT. Reportedly, the company is aiming to maintain healthy profitability, with PAT margins roughly 17–19 percent even as it scales up.

Strengthened Balance Sheet

Beyond the headline numbers, KPI Green’s management outlined several notable achievements in FY25.

The company raised INR 1,000 crore through a qualified institutional placement (QIP) to institutional investors, a move that strengthened the balance sheet.

“Our net worth has increased substantially with the QIP…you have to also see that the debt-equity has substantially improved,” Yahoo noted, pointing out the debt-to-equity ratio fell from ~0.5 to 0.33, reducing interest burden. Thanks to equity infusion and improved credit profile, the ratings got upgraded to ICRA “A Positive” during the year.

The renewable energy developer also secured major engineering, procurement and construction (EPC) contracts that boosted its order book. This included a 300 MW solar EPC order from Coal India Ltd. and a 100 MW project for Maharashtra state utility MAHAGENCO, both taken as landmark wins that are on track for early commissioning.

These deals are a part of 2.6 GW of orders in hand, adding to the 950 MW already commissioned by KPI Green.

Further, the company is expecting additional large utility-scale EPC orders in early FY26 from government and corporate clients, with projected project-level margins of 15–18 percent.

Battery Storage and Market Expansion

KPI Green plans to enter the battery storage segment, initially by installing BESS for captive (onsite) use and then participating in government tenders for grid-scale storage projects. The strategic move is expected to position the company in a growing market for hybrid renewables plus storage, as more states adopt storage requirements to ensure a smart and balanced grid.

At the same time, KPI Green is broadening its geographic footprint beyond its home base of Gujarat.

“We are one of the leading players in Gujarat, [but] at least 30 percent to 40 percent [of future capacity] should come from out of Gujarat,” Yahoo suggested.

The company has signed Memoranda of Understanding (MoUs) with the state governments of Odisha, Rajasthan, and Madhya Pradesh to facilitate large-scale solar and hybrid projects in those regions.

These MoUs cover critical preparatory steps like land acquisition and grid infrastructure for new parks. KPI is also eyeing opportunities in Maharashtra and other states to meet its long-term target (10 GW by 2030) with a pan-India presence. This multi-state expansion, combined with the push into storage, underscores the company’s ambition to be a major national renewable player in the coming years.

Order Book & Future Plans

Looking ahead, KPI Green’s management struck an optimistic tone on growth. The company reiterated its guidance for 60–70 percent annual growth in the near term, similar to the trajectory achieved in FY25.

The order book currently stands at 1.76 GW on the CPP/EPC side (excluding the 1.5 GW IPP pipeline), which is expected to execute over the next year.

Yahoo indicated the sector demand remains robust, with many projects up for grabs.

“The sector is very booming and there are a lot of orders and work available for a good player like us,” he said.

The senior management is confident of securing enough new orders by Q2 FY26 to fully cover FY27’s revenue plan, and is even bidding on projects that would extend into FY28. This visibility gives the company comfort in sustaining its high growth rate over the next few years.

Meanwhile, the company’s cash flows and funding position remain good. KPI Green ended FY25 with INR 597 crore in cash and equivalents on its balance sheet. It is estimated that about INR 4,000 crore in capex will be invested in the 1.5 GW IPP projects over the next two years.

This will be deployed in phases (partly in FY26, the rest in FY27) and funded through a combination of the recent QIP proceeds, debt, and internal accruals. Notably, the company has kept its net debt low, which gives room to leverage if required.

Unlocking Value Through IPO Of Its Subsidiary 

KPI Green is also preparing to unlock value through an IPO of its subsidiary, Sun Drops Energia, which houses its solar IPP assets. The IPO is expected by the end of this financial year (FY26). If successfully executed, the Sun Drops Energia listing will further unlock capital for KPI Green’s expansion and allow investors to directly participate in its growing renewable asset base.

Overall, the Q4 FY25 results portrayed a company firing on all cylinders – delivering record financials, securing marquee projects, and positioning for long-term growth through higher-margin IPP assets, new technologies like BESS, and expansion into new markets.

With a healthier balance sheet and strong demand tailwinds, KPI Green’s management remains bullish that it can sustain its rapid growth and enhance shareholder value in the coming years.