This SME stock has surged 100% in 1 month; zoomed 330% against IPO price

Shares of KP Green Energy (KPGE) locked in upper circuit for the fourth straight day, up 5 per cent at Rs 619.85 on the BSE on Tuesday at 12:50 pm; in otherwise a weak market.

Shares of KP Green Energy (KPGE) were locked in upper circuit for the fourth straight day, up 5 per cent at Rs 619.85 on the BSE on Tuesday at 12:50 pm in an otherwise weak market.

In past four trading days, KP Energy Green stock has surged 22 per cent. The stock of SME group company was trading at its highest level since listing on March 22, 2024. In comparison, the S&P BSE Sensex was down 0.75 per cent at 73,338. Currently, the stock is trading 330 per cent higher against its issue price of Rs 144 per share.

In past one month, the stock price of KPGE has zoomed 100 per cent, as the company reported robust results with consolidated profit after tax (PAT) at Rs 24.20 crore in second half of the financial year 2023-24 (H1FY24), compared to Rs 5.03 crore in H1FY23. Revenue from operations jumped 365.7 per cent year-on-year to Rs 245.12 crore from Rs 52.64 crore during the same period last fiscal.

KPGE is a part of Gujarat based KP Group, promoted and founded by Dr. Farukbhai Gulambhai Patel. KP Group has achieved its growth through diversification into various sectors including fabrication and galvanizing, renewable energy sector (Solar & Wind), Telecom Infrastructure (Telecom Towers and OFC Network set up) and Green Hydrogen and Ammonia showcasing its commitment to sustainable and innovative solutions.

KPGE is engaged in the business of Fabrication and Hot-Dip Galvanising of Transmission Line Structure, Windmill Structures, Isolators, Telecom Towers, Substation & Switchyard Structures, Solar Module Mounting structure, Cable trays, Earthing strips, pole structure, rooftop solar installation, operation and maintenance of Optical Fiber Cable infrastructure in Gujarat.

KPGE is equipped to cater the heavy engineering sectors like renewable energy, transmission and telecom. The company proposes to build large capacity of 90,000 MT/P.A. Hot Dip Galvanizing Plant (Automated and encapsulated) thereby expanding presence in Road and Rail Infrastructure Sector.

The Group provides solar power as an independent power producer (IPP) and as a service provider (EPC contractor) to captive power plant (CPP) customers. The Group’s revenue has shown consistent healthy growth over the years.

The Group has entered into long-term PPAs of ~15-20 years for its IPP capacities under the third party open access route, totaling ~137 MW, with reputed commercial and industrial (C&I) customers 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, ICRA said in KPI Green Energy’s rating rationale.

For the recently awarded utility scale project of 200 MWAc, the company has signed a long-term PPA of 25 years with a strong counterparty, i.e., Gujarat Urja Vikas Nigam Limited (GUVNL), leading to revenue visibility and low counterparty credit risk. Moreover, at a consolidated level, the CPP/EPC order book continues to grow at a rapid pace and stood at ~Rs 1,040.0 crore as of March 2024 compared with ~Rs 512.0 crore as of February 2023. These orders are expected to be executed over the next 6-18 months, the rating agency said.

Meanwhile, shares of KPI Green Energy up 5 per cent to Rs 2,062.10. The stock had hit a record high of Rs 2,109.25 on April 25, 2024. In past one year, it zoomed 320 per cent.