Target: ₹562
CMP: ₹435.20
KPI Green Energy has delivered a strong performance in Q4-FY26 and FY26, exceeding our estimates despite delays in power evacuation for the recently commissioned 376 MW GUVNL IPP project at Khavda, Gujarat. For FY26, revenue/EBITDA/PAT grew 55.3/70/49 per cent y-o-y to ₹2,696 crore/₹958 crore/₹476 crore, respectively.
Growth was mainly driven by the CPP vertical, which grew 61.2 per cent y-o-y on the back of strong execution. The company energised 447 MW in Q4-FY26, taking total operational capacity to 975 MW. Units generated rose 64.5 per cent y-o-y to 41 crore units, though it remained below the internal target due to project commercialisation delays.
We have revised upward our FY27 and FY28 estimates across Revenue, EBITDA and PAT by 10–24 per cent, supported by a strong FY26 performance and increasing contribution from the high-margin IPP business, which carries EBITDA margins of around 85–90 per cent. The BESS capacity, expected to become fully operational by FY27, is likely to start contributing to revenue from FY28 onwards. The EPS growth is expected to be marginally impacted by the recent warrant issuance to promoters, resulting in around 5 per cent equity dilution.
Given strong execution momentum, robust order book and rising contribution from the high-margin IPP business, we maintain our Buy rating with a target price of ₹562, valuing the stock at 18x FY27E EPS of ₹31.2.