This article first appeared on GuruFocus .
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Total Income:INR 710 crore in Q1 FY27, up 16% year-over-year from INR 614 crore in Q1 FY26.
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EBITDA:INR 262 crore in Q1 FY27, up 21% year-over-year from INR 217 crore in Q1 FY26.
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EBITDA Margin:Improved to 37% in Q1 FY27 from 35% in Q1 FY26.
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Profit After Tax (PAT):INR 95 crore in Q1 FY27, down from INR 111 crore in Q1 FY26, reflecting higher depreciation and finance costs on the growing asset base.
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Cash Profit:INR 173 crore in Q1 FY27, up 6% year-over-year from INR 163 crore in Q1 FY26.
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Portfolio Capacity:Approximately 6.94 GW as of June 30, 2026, up 71% year-over-year from 4.06 GW, comprising 1.87 GW installed and 5.07 GW work in progress.
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IPP Portfolio Generation:Q1 FY27 unit generation grew nearly four times year-over-year, exceeding 65% of the entire FY 2026 generation.
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Commissioned Capacity:0.85 GW commissioned during the year, with 2.88 GW of fresh orders booked.
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Land Bank:8,657 acres as of June 30, 2026.
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Power Evacuation Capacity:5.10 GW as of June 30, 2026.
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Release Date: August 12, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue grew 16% YoY to INR 710 crore, with EBITDA up 21% to INR 262 crore and margin expansion to 37%.
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Portfolio capacity surged 71% YoY to 6.94 GW, with 0.85 GW commissioned and 2.88 GW of fresh orders booked in the past year.
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IPP generation in Q1 FY27 nearly quadrupled YoY, already exceeding 65% of FY26's total, signaling strong recurring revenue growth.
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Strategic land bank expanded to 8,657 acres and power evacuation capacity reached 5.10 GW, supporting future project execution.
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International expansion progressing with a 5 GW MOU in Botswana and a UAE solar-plus-storage project for data centers, diversifying growth avenues.
Negative Points
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PAT declined 14% YoY to INR 95 crore due to higher depreciation and finance costs from new IPP capacity, with EPS growth turning negative.
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Management revised growth guidance down to 30-40% from earlier 40-50% targets, citing geopolitical headwinds and cost pressures.
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Gross margins in the CPP segment fell substantially, with KP Energy's EBITDA margin dropping from 22% to 12% due to rising input costs.
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Inventory buildup remains elevated, though expected to normalize as projects complete, but it ties up working capital.
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Full-year PAT margin guidance of 16-18% is unlikely to be met, with management indicating a dip due to seasonality and stabilization delays.
Q & A Highlights
Q: Given the expansion of the IPP segment, how do you see the debt and cash position evolving going forward? A: Salim Yahoo (CFO) stated that the company is currently at a comfortable leverage position of around 2x. Since the debt for the larger projects (250 MW and 370 MW) has already been expensed out, the long-term debt-to-equity ratio is expected to remain comfortable at a maximum of 3:1 going forward.
Q: Can you provide some color on how the pipeline is shaping out for FY27 and FY28, and the expected quarterly run rate? A: Salim Yahoo (CFO) noted that the IPP segment has energized a substantial portion of existing projects and the company has an order book of approximately INR 5,000+ crore. Since all expenses for the IPP projects have been expensed out and revenue is now starting to flow in, the coming quarters are expected to show far better performance than Q1 FY27.
Q: We saw a large inventory buildup towards the end of the last financial year. Can you update on the inventory position today and do we expect it to come down? A: Salim Yahoo (CFO) explained that inventory has already come down to some extent in Q1 FY27 and is expected to decrease further. The buildup was due to geopolitical conditions, prompting the company to stockpile materials to avoid delays in execution. As projects are completed, inventory will gradually decline.
Q: On the Botswana project, when can we see revenue contribution, and will it be an IPP? A: Salim Yahoo (CFO) confirmed Botswana will be an IPP project under a Gift City subsidiary. The company has already acquired 500 acres of land and is at an advanced stage of signing PPAs. No revenue is expected this year, but revenue should begin in the upcoming years.
Q: What kind of PAT has Sundrop generated this quarter compared to last year? A: Salim Yahoo (CFO) reported that Sundrop generated revenue of INR 154-155 crore with a PAT of INR 26 crore (17% margin) and EBITDA of INR 42 crore. With the addition of battery energy storage and manufacturing, plus a strong order book, Sundrop is expected to cross INR 1,500 crore in top line this year.
Q: Execution was slow compared to guidance this quarter. What is the reason, and how should we look at revenue and margin for FY27? A: Salim Yahoo (CFO) clarified that there was no slowdown, but billing for utility-scale projects with institutions like Coal India, Adani Group, and Aditya Birla Group got postponed to the next quarter. The company maintains its 30-40% YoY growth commitment. The margin impact is temporary due to depreciation and interest; as plants stabilize, margins will return to past levels.
Q: Can you help us understand the impact of geopolitical conditions on the business? A: Salim Yahoo (CFO) explained that the major impact is on the cost side, not sales. Components like steel structures, cables, and logistics have been impacted. The company has absorbed some costs and passed on some to customers, which has affected margins, particularly in the EPC business.
Q: How long will the stabilization period last, and how should we look at interest cost and depreciation for the rest of FY27? A: Salim Yahoo (CFO) stated that lenders typically give a one-year stabilization period. However, Q1 generation already exceeded 65% of the entire FY26 generation, showing plants are nearly at full capacity. The full benefit should be visible in upcoming quarters. Interest costs will be around INR 450 crore annually on the full debt of INR 5,000+ crore, but revenue will also strengthen to sustain profitability.
Q: Are you thinking about changing the proportion between IPP and CPP given the capital intensity and strain on the balance sheet? A: Salim Yahoo (CFO) reiterated the company's plan to maintain IPP at around 20% of the total revenue mix. IPP provides 85-90% EBITDA with sustainable growth for 25 years. The current EPS decline is temporary due to project life cycles; as projects stabilize, EPS and profitability will return to original levels.
Q: The gross margins for the CPP segment of both KP Energy and KPI Green have fallen substantially. Is this a one-time issue or the new normal? A: Salim Yahoo (CFO) attributed the margin impact to geopolitical issues affecting costs. KPI Green has IPP support and shared costs, so its margins are better. KP Energy is purely EPC-driven, so it has been more impacted. The company is keen to return to old margins once geopolitical conditions improve.
Q: What is the peak cash flow expected from the current 1 GW IPP capacity after interest? A: Salim Yahoo (CFO) stated that the IPP business generates 85-90% EBITDA. With an annual interest cost of around INR 450 crore on the full debt, the top line from the IPP segment is expected to be upwards of INR 1,000 crore, with peak capacity expected by Q3 or Q4 of FY27.
Q: When can we achieve the INR 1,000 crore mark from the IPP segment at full capacity utilization? A: Salim Yahoo (CFO) confirmed that in the next financial year (FY28), the company will enjoy more than INR 1,000 crore from the IPP segment, noting that INR 1,000 crore is a very conservative number.
Q: What will be the depreciation for the IPP segment given the total investment? A: Salim Yahoo (CFO) clarified that depreciation is around 5% because it's a 25-year plant life, not 15%. With a total investment of INR 5,000-6,000 crore, the IPP business will generate INR 1,500-1,600 crore in revenue, with 90% EBITDA (INR 1,500 crore) and interest costs of INR 450 crore, leaving substantial profitability.
Q: Do you expect to cover the PAT margin guidance of 16-18% for FY27 in H2? A: Salim Yahoo (CFO) stated that H2 will cover a portion of the
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
