These 2 KP Group stocks have zoomed up to 67% thus far in June

Thus far in the month of June, KPI Green Energy (66 per cent) and K P Energy (56 per cent) have outperformed the benchmark S&P BSE Sensex index

Shares of KPI Green Energy and KP Energy hit their respective new highs, soaring up to 6 per cent on the BSE in Thursday's intra-day trade, in an otherwise subdued market.

KPI Green Energy surged 6 per cent to Rs 822.65, while KP Energy was locked in the 5 per cent upper circuit at Rs 313. By comparison, the S&P BSE Sensex was down 0.25 per cent at 63,367 at 12:20 PM.

Thus far in the month of June, KPI Green Energy (up 66 per cent) and KP Energy (up 56 per cent) have outperformed the benchmark index which has gained 1 per cent during the period.

KP Group specialises in developing wind, solar standalone, and hybrid power projects in renewable energy sector. It includes KP Energy Limited, KPI Green Energy Limited, and KP Buildcon Private Limited along with the other subsidiaries and SPVs.

The Group's consolidated captive power plant (CPP)/engineering, procurement and construction (EPC) order book continues to grow at a rapid pace. As of June 1, 2023, the company had 109 MW CPP orders worth of Rs 430 crore. These orders are expected to be executed over the next six to nine months. There are a lot of orders which are in the pipeline which the management expects to finalize within the next couple of months.

"The Group has entered into long-term PPAs of ~15-20 years for its IPP capacities, totaling ~128 MW, with reputed counterparties with a track record of timely payment of bills from them. This provides revenue visibility for the company’s IPP business along with low counterparty credit risk," according to ICRA.

In FY24, the Group is expected to post healthy growth in revenues and profitability, led by higher execution of CPP orders, and commissioning of the 26.1-MW hybrid power project, the rating agency said.

The 'Stable' outlook on the long-term rating reflects ICRA's opinion that the Group will continue to benefit from the extensive experience of its promoter, and a healthy order book position in the CPP segment providing near-term revenue visibility. Also, the IPP segment is expected to demonstrate satisfactory generation levels, as witnessed in the past, leading to stable cash inflows that would support the company’s profitability and debt servicing, ICRA said in rationale.

The Group has installed IPP capacities of ~22 MW and ~8 MW under the subsidiaries, KPI Green Energy and its subsidiary Sun Drops Energia Private Limited (SDEPL), respectively. These plants are also located at Bharuch, Gujarat. At a Group level, the current installed IPP capacity stands at ~128 MW; also, the Group had commissioned CPP projects of more than 130 MW as of December 2022.