K.P. Energy Limited

Industrials — Engineering & Construction · NSE

₹197.25−₹4.64 (−2.30%)

DalalBaazaar Score

73 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

The 60-second version of K.P. Energy Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

K.P. Energy Limited provides balance of plant solutions for renewable energy sector in India. It operates through Infrastructure Development, Sale of Power, and Operation & Maintenance Services segments.

IndustryEngineering & Construction

SectorIndustrials

Employees820

Annual revenue₹1,497 Cr

How does it make money?

Turns over ₹1,497 Cr a year. Of every ₹100 of sales, about ₹12 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation. Each of its 820 employees supports ₹1.83 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.83 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 32.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 34.7% against a peer median of 14.1% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE14.1%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +242% while net margin moved +21% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+242%

Margin effect+21%

DalalBaazaar Score

73/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.32 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

76/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

86/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

7.3x

2Y Median

22.2x

25 monthly readings · mean 30.5x · range 7.3x–71.0x

Sector Median

30.1x

median of 3 sector peers

🟢Current valuation is approximately 67% below its 2y median of 22.2x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 76% below the peer median of 30.1x.

vs. its own history

Cheap

22.2x median over 25 months · -67%

vs. sector peers

Cheap

30.1x median of 3 peers · -76%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.7x

PEG

0.12

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 16.4% to 21.5% over 3 years.
High return on capital employed
ROCE of 32.5% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 5 high

🔴Debt has risen sharplyFinancial
Total debt is up 502% over 3 years, from ₹80 Cr to ₹482 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 322% against revenue up 242% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 1443% against revenue up 242% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 32.5% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 16.4% to 21.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 67% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 76% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 322% against revenue up 242%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
5 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 38% a year✓ 50.7% CAGR
Latest reported year was 136.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 19%✓ 21.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹95 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 30%✓ 32.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹1,337 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.3x

Cheap

Cheap against the generic band

P/B Ratio

2.53x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹27.18

Profitable

Profitable on a per-share basis

ROE

34.7%

Strong

Strong capital efficiency

ROCE

32.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.00x

Moderate

Moderate leverage

Revenue Growth (YoY)

136.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

1.6%

Modest

Slow profit growth

Dividend Yield

0.41%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹95 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

9.9%

Average

Average margins

Net Margin

10.1%

Good

Strong bottom-line conversion

Current Ratio

1.20

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.32

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

215.2 / 235.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

16.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹438 Cr	₹473 Cr	₹939 Cr	₹1,497 Cr	+50.7%
EBITDA	₹72 Cr	₹89 Cr	₹177 Cr	₹321 Cr	+64.6%
EBITDA Margin	16.4%	18.7%	18.8%	21.5%	—
PAT (Net Profit)	₹44 Cr	₹58 Cr	₹115 Cr	₹181 Cr	+60.5%
EPS	₹6.58	₹8.73	₹17.22	₹26.86	+59.8%
ROE	34.2%	31.4%	36.8%	34.7%	—
ROCE	32.4%	28.5%	28.3%	32.5%	—
Total Debt	₹80 Cr	₹179 Cr	₹367 Cr	₹482 Cr	+81.9%
Free Cash Flow	₹23 Cr	-₹5 Cr	-₹96 Cr	-₹95 Cr	—

🟢 Revenue has grown at 50.7% a year over 3 years.

🟢 EBITDA has grown at 64.6% a year over 3 years.

🟢 EBITDA Margin has risen from 16.4% to 21.5% over 3 years (+5.0 pts).

🟢 PAT (Net Profit) has grown at 60.5% a year over 3 years.

🟢 EPS has grown at 59.8% a year over 3 years.

🟡 ROE has held roughly flat at 34.7% over 3 years.

🟡 ROCE has held roughly flat at 32.5% over 3 years.

🔴 Total Debt has grown at 81.9% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹23 Cr to -₹95 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,691 Cr

Total Liabilities

₹2,168 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹123 Cr

Capex

-₹218 Cr

Shareholding (proxy)

Institutional Holding

0.1%

Insider Holding

50.7%

Corporate Actions

Dividend Rate

₹0.8

Ex-Dividend Date

22 Sept 2026

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

2 positive4 general

KP Energy Ltd. Share Price: 52-Week Low, Valuation Check

Univest, 17 Aug

K.P. Energy Ltd Falls to 52-Week Low of Rs 201.45 as Sell-Off Deepens

MarketsMojo, 14 Oct

K.P. Energy Q1FY27 revenue surges 137% to ₹519.46 crore

scanx.trade, 11 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

KP Energy Q1 Profit Rises 4% to ₹26 Cr; Revenue Jumps 2.4×

HDFC Sky, 11 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

KP Energy surges 8% on CERC nod for inter-state electricity trading licence

Business Standard, 23 Apr

Should You Be Excited About K.P. Energy Limited's (NSE:KPEL) 39% Return On Equity?

Simply Wall Street, 09 Feb

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability · Valuation

MiddlingFinancial Health

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 5 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑