KP Energy basic analysis

Basic analysis of KP Energy: To keep the country progressive, the Central Government of India is leading the country towards creating a renewable revolution to have a sustainable future. One of the companies that will receive attention is KP Energy. KP Energy is a leading provider of highly demanded Balance of Plant (BOP) solutions for the wind energy industry.

In this article, we will perform a fundamental analysis of KP Energy with the goal of understanding its operations, finances, and future potential.

KP Energy Basic Analysis – Company Overview

KP Energy We manage the entire wind farm development value chain, from conceptualization to project commissioning and maintenance. KP Energy’s primary services include site identification, preparation, construction, power evacuation and maintenance.

KP Energy plays a key role in coordinating the various activities associated with utility-scale wind farms and developments. KP Energy is a well-known company in the state of Gujarat as a leading BOP (Balance of Plant) solutions provider.

The company has a rich history of completing a 735.1 MW business pipeline through 18.4 MW independent power producers (IPPs). KP Energy also operates four wind energy projects, each with a capacity of 2.1 MW and a 10 MW solar power project. KP Energy received an award from NPTC for achieving a large order of 464.10 MW from a single customer.

KP Energy has received an order of 23.1 MW from Aditya Birla Renewable Energy Ltd, one of its existing customers. To highlight the company’s outstanding achievements, it also includes the completion of a 300 MW wind farm pooling substation. Secondly, completion of civil road works and mechanical roads associated with the 252 MW Siddhpur project.

In this basic analysis of KP Energy, we understand the basics of the company that can be helpful in future analysis of KP Energy.

segment analysis

The next part of KP Energy’s basic analysis is segment analysis. KP Energy has three important business segments that primarily generate revenue:

Project-based Revenue Engineering, Procurement, Construction and Commissioning (EPCC): This is a major segment that accounts for most of the company’s revenue. The sector’s activities include site identification and acquisition in windy locations, site preparation through construction of access roads, logistics and wind farm installation.

Pension Basic Revenue – Operations and Maintenance (O&M): This division is responsible for providing appropriate operation and maintenance services to all Balance of Plant (BOP) wind farms.

Independent Power Producers (IPPs): As its name suggests, KP Energy strives for independent power, and as part of this process it has 18.4 MW of renewable energy generation. Therefore, each of these segments plays a key role in establishing the company as a significant player in the wind energy market.

The table below shows the revenue contribution of each segment.

Industry Overview

KP Energy We manage the entire wind farm development value chain, from conception to project commissioning and maintenance. Key services include site identification, preparation and construction along with power evacuation and maintenance.

KP Energy plays a key role in coordinating the various activities associated with utility-scale wind farms and developments. KP Energy is a well-known company in the state of Gujarat as a leading BOP (Balance of Plant) solutions provider.

The company has a rich history of completing a 735.1 MW business pipeline through 18.4 MW independent power producers (IPPs) and operates four wind energy operations with 2.1 MW and 10 MW solar power project capacity respectively. KP Energy received an award from NPTC for achieving a large order of 464.10 MW from a single customer.

Thanks to its strong management and quality, KP Energy has been receiving recurring orders of 23.1MW from most of its existing customers, one of which is from Aditya Birla Renewables Energy Limited, a notable company.

To highlight the excellent achievements made by the company, these include completion of the 300 MW wind farm pooling substation and completion of civil road works and mechanical roads associated with the 252 MW Siddhpur project.

KP Energy Basic Analysis – Finance

Sales and Net Profit

According to the company’s income statement, the company’s revenue increased significantly by 74.86% from 250.38 Crores in FY 2022 to 437.82 Crores in FY 2023. It also shows an increase of 249.04% compared to FY 2022. The previous year. The 5-year sales growth rate is CAGR 144.51%.

The company’s net income increased 140.36% from $18.27 billion in fiscal 2022 to $43.91 billion in fiscal 2023. The 5-year CAGR is 186.19%, indicating strong growth potential.

profit

KP Energy reported that its operating profit margin and net profit margin increased by 17.08% (OPM) and 9.93% (NPM), respectively, from FY 2022 to FY 2023. Sales growth is also reflected in margins. The main primary reasons for the increase are efficient cost structure under management along with strong order book and projects.

The significant improvement in profit margins was due to the increase in incremental profits received by the Company, while other factors such as increased revenues and cost control measures associated with the Company’s operations contributed to the increase in margins.

rate of return

Return on Capital Employed (ROCE) increased from 18.06% in FY 2022 to 37.88% in FY 2023, with a three-year average of 21.57%. The improvement in return on equity (ROCE) is due to the company’s good performance resulting in higher earnings before interest and taxes (EBIT) and lower cash outflow for interest payments.

Return on equity (ROE) increased by 16.8% from 23.90% in fiscal 2022 to 40.70% in fiscal 2023. The average ROE over the past three years is 24.76%. The average return on equity is 3.19% higher compared to return on capital employed, indicating greater returns to shareholders.

The improvement in return on equity (ROE) is a result of increased sales, particularly in the company’s EPC segment, while other factors, including increased profits and repayment of the company’s term loans, have led to improved returns.

leverage ratio

KP Energy’s debt ratio in fiscal 2023 is low at 0.32. The ratio appears to be decreasing after the debt ratio decreased significantly from 0.8 in 2019. Therefore, it represents the amount repaid by the company.

The 2023 interest coverage ratio was 11.66 times, indicating the company’s strength in meeting its interest payment obligations. Due to low debt, the three-year average interest coverage ratio is 7.12x. KP Energy’s Fundamental Analysis of Finance will provide the audience with a great perspective on work in the financial sector.

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KP Energy’s basic analysis – future plans

Several plans for the company are part of KP Energy’s fundamental analysis. These plans are listed below.

• Currently, KP Energy has a capacity of 352.8MW and plans to add 830MW soon.
• The company is actively engaged in preliminary discussions with reputed independent power producers (IPPs) for development of large-scale CTUs in Gujarat.
• KP Energy plans to achieve sustainable growth by installing 100MW of power generation facilities by the end of 2025.
• In response to the government’s request to achieve zero carbon emissions by 2070, the company is working hard to achieve this, and KP Energy is also playing an important role in achieving the goal.

conclusion

After looking at detailed information such as company overview, industry overview, company financial status, and future outlook, we will conclude the article on the basic analysis of KP Energy. The company is interesting and has a lot of growth opportunities due to government push and support.

A fundamental analysis of KP Energy is necessary to understand the risks and returns accompanying the company. Please leave your thoughts in the comments section below.

Written by Nishanth P

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