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Economic Overview

Indian economy

The Indian economy has displayed remarkable resilience in the face of significant global challenges, including the COVID-19 pandemic, the Russian-Ukraine conflict, and synchronised policy rate hikes by central banks worldwide. Building upon the impressive growth rate of 8.7% in FY22, India is projected to maintain its positive momentum with a real growth rate of 7% for FY23. This commendable performance can be attributed to the driving forces of robust private consumption and capital formation, which have not only stimulated employment generation but also contributed to a decline in urban

unemployment rates. Additionally, the successful execution of an extensive vaccination drive, administering over 2 billion doses, has bolstered consumer confidence and fostered a sustained rebound in consumption. It is imperative that private capital expenditure takes the lead to accelerate job creation, as the credit growth to the Micro, Small, and Medium Enterprises (MSME) sector has witnessed exceptional growth, aided by the extended Emergency Credit Linked Guarantee Scheme (ECLGS) initiated by the government. Furthermore, private consumption as a percentage of GDP reached its highest level in Q2 of FY23, driven by a resurgence in contact-intensive services such as trade, hotels, and transport.

An essential driver of Indias economic growth in FY23 has been the CAPEX of the central government, which exhibited a remarkable increase of 63.4% during the first eight months of the fiscal year. This surge in government CAPEX has not only invigorated the economy but has also facilitated private CAPEX, thereby acting as a catalyst for growth. The central government remains on track to meet its full-year capital expenditure budget, while the strengthening of corporate balance sheets and increased access to credit financing bode well for sustained private CAPEX. Indias economy has demonstrated resilience and an ability to rebound swiftly from the pandemic, surpassing the recovery of

many other nations. The proactive measures implemented by the government, in collaboration with the Reserve Bank of India, have effectively mitigated the impact of global events and contributed to the gradual easing of inflationary pressures. These prudent steps, coupled with the favourable trend of easing global commodity prices, have successfully brought retail inflation.

As the focus shifts to FY24, the Indian economy is poised for robust growth. A proactive approach to credit disbursement and a revitalised capital investment cycle are expected to drive economic expansion.

The corporate and banking

sectors, bolstered by improved balance sheets, are poised to contribute significantly to this positive trajectory. Moreover, the expansion of public digital platforms and the implementation of transformative initiatives like PM GatiShakti, the National Logistics Policy, and Production- Linked Incentive schemes will provide additional impetus to manufacturing output. These measures, combined with a favourable economic environment, position India for continued progress and development in the upcoming fiscal year.


Indias GDP Growth Forecast

(In %)


2019-20 3.7
2020-21 (6.6)
2021-22 8.7
2022-23 7.0
2023-24 6.0-6.8

Industry Overview

Indian renewable energy landscape

Indias renewable energy sector is poised for significant growth, driven by the countrys soaring energy demand and its commitment to sustainable development. As one of the largest and fastest-growing economies in the world, India recognizes the urgency of shifting towards low-carbon, renewable energy sources to meet its energy needs. The nations recent announcement of its ambitious targets to achieve net-zero carbon emissions by 2070 and to derive 50% of its electricity from renewable sources by 2030 marks a pivotal moment in the global fight against climate change.

To fulfil its renewable energy ambitions, India aims to produce

five million tonnes of green

hydrogen by 2030, supported by the establishment of 125 GW of renewable energy capacity. With the approval of 57 solar parks boasting a combined capacity of 39 GW+, and the identification of potential offshore sites for wind energy, India is making significant strides in the renewable energy sector. The transformational impact of these ambitious goals is already evident, as the rising population and electrification of rural communities fuel the demand for clean energy to power homes, businesses, and entire communities. The adoption of clean energy not only contributes to reduced pollution levels but also empowers villages to become self-sustainable.

Indias commitment to renewable energy will revolutionise its power sector and yield numerous benefits. As technological advancements improve the efficiency of batteries for storing electricity, the cost of solar energy is projected to decrease

by 66% by 2040. By leveraging renewable energy sources instead of coal, India stands to save an impressive D54,000 crore (US$

8.43 billion) annually. Furthermore, the introduction of wind-solar hybrid capacity, with an anticipated addition of 15,000 MW between 2020 and 2025, demonstrates the countrys determination to harness the potential of diverse renewable energy sources. The governments comprehensive plan includes the development of extensive transmission lines spanning 50,890 circuit km and substation capacity of 4,33,575 MvA, thereby bolstering domestic production and facilitating the energy transition. By envisioning the installation of 515 GW of battery storage by 2030, the government aims to ensure uninterrupted power supply to end consumers, further cementing Indias position as a global leader in renewable energy.

Government commitments

• India has set forth an ambitious vision to combat climate change by reducing total projected carbon emissions by 1 billion tonnes before 2030.

• As part of this commitment, the government aims to decrease the carbon intensity of the nations economy by less than 45% within the decade.

National green hydrogen mission

• A groundbreaking initiative, the National Green Hydrogen Mission, has been approved by the Union Cabinet with an initial outlay of D19,744 crore.

• This mission encompasses various components, including the SIGHT program, pilot projects, research and development, and other vital aspects.

• By focusing on the production of five million tonnes of green hydrogen

by 2030, India is spearheading the global shift towards a hydrogen- based economy.

Offshore wind energy

• Recognizing the vast potential of offshore wind resources, India has set medium and long-term targets for offshore wind power capacity

r\r\ it-i/M-i c-

• By aiming to achieve an impressive 30 GW by 2030, the country is poised to harness this untapped source of renewable energy.

• Offshore wind farms will play a pivotal role in diversifying the renewable energy mix and driving sustainable growth in the power sector.

Wind-solar hybrid policy

• To ensure optimal utilisation of transmission infrastructure and land, the government introduced a national policy promoting large-scale grid-connected wind-solar PV hybrid systems.

• This innovative approach addresses the intermittency challenge by synergizing the complementary characteristics of wind and solar energy sources.

• By striking the right balance between wind and solar components in hybrid projects, India is enhancing grid stability and unlocking the

full potential of renewable energy resources.

PLI scheme

• To boost domestic manufacturing capabilities and promote exports

in the solar sector, the government has launched the Production-Linked Incentive (PLI) Scheme.

• The scheme aims to establish fully integrated solar PV module manufacturing capacities, generating significant direct and indirect employment opportunities.

• With a focus on import substitution and fostering research and development, this initiative will drive advancements in solar technology and elevate Indias position in the global renewable energy market.

Favourable union budget

• Recognizing the significance of green growth, Indias Union Budget has prioritised various renewable energy initiatives.

• A substantial allocation of funds, including a $2.4 billion National Hydrogen Mission, demonstrates the governments commitment to scaling up hydrogen production.

• Additionally, budgetary support has been extended to Battery Energy Storage Systems and Pumped Storage Projects, bolstering energy storage capabilities and ensuring a reliable and sustainable power supply.

Installed capacity for renewables

(February 2023)

63.3 gw


41.9 gw


10.2 gw

Bio Power

4.93 gw

Small Hydro

With continuous efforts to expand renewable infrastructure and embrace innovative technologies, India is poised to further strengthen its position as a global leader in renewable energy generation. The substantial growth in installed capacities sets the stage for a greener future, where renewable sources play a vital role in meeting the countrys energy demands while mitigating climate change.

Sources: Invest India, IBEF

Indian wind energy sector

In the realm of renewable energy, India has emerged as a prominent player, particularly in the field of wind power. With an impressive installed capacity of 41.9 GW as of February, 2023, India stands proudly as the fourth-largest country worldwide in terms of its wind power capacity. This remarkable feat has been made possible through strategic project placements across key regions, harnessing the abundant wind resources that adorn the Southern, Western, and Northern Western parts of the country.

Recognizing the immense potential of wind energy, the Indian government has taken proactive steps to foster its development. The National Institute of Wind Energy (NIWE) has played a pivotal role by setting up over 800 wind-monitoring stations throughout the country. These stations have provided crucial insights into Indias wind potential at various heights above ground level, unveiling an impressive gross wind power potential of 302 GW at 100 metres and a staggering 696 GW at 120 metres.

The fiscal year 2023 marked a significant upswing for the wind sector, witnessing the addition of 2.28 GW of new capacity?a remarkable 105% increase compared to the previous year. Among the states, Rajasthan emerged as the front-runner, boasting an installed capacity of 867 MW, closely followed by Gujarat (770 MW) and Madhya Pradesh (324 MW).

To further spur private sector investment, the government has introduced a range of fiscal and financial incentives. Guided by favourable policies and bolstered by a robust installed capacity, Indias wind energy sector continues to thrive, playing a pivotal role in driving the nations renewable energy goals and making significant strides in reducing its carbon footprint.

Key developments

The wind energy sector in India has undergone some key developments that have played a significant role in shaping its growth trajectory and fostering a favourable environment for wind power generation in India. By providing technical support, streamlining procurement processes, and facilitating inter-state transmission, India is paving the way for a robust and sustainable wind energy ecosystem.

V. Technical support and

r. Tariff-based competitive Facilitating inter-state

site identification:

bidding process: sale of wind power:

The National Institute of Wind

Tariff-Based Competitive Bidding To unlock the full potential

Energy (NIWE) in Chennai

Process marks a significant of wind energy, the Indian

has been instrumental in

milestone in the wind energy government has taken a

providing essential technical

sector. These guidelines establish a significant step by waiving off

support, including wind

transparent framework for procuring inter-state transmission charges

resource assessment and

wind power through a competitive and losses for wind power.

the identification of potential

bidding process. By standardising This initiative aims to facilitate

sites. This expertise has

the process and defining the roles the smooth and seamless sale

empowered project developers

and responsibilities of stakeholders, of wind power across state

and stakeholders to make

these guidelines facilitate the boundaries, promoting inter

informed decisions, maximising

procurement of wind power at state collaboration and enabling

the utilisation of Indias wind

competitive rates, ensuring cost a more efficient utilisation of


efficiency for distribution licensees. wind resources.




23.7 GW

19.4 GW
15.0 GW


Majority of active pipline is

Peak in installations in 2024 with Installations stabilize with annual

commissioned until 2024; base

expiry of ISTS waive-offs in June hybrid auctions, where wind plays

case and conservative case projects

2025; C&I hybrid installations critical role; reduction due to

will be impacted due to surge in turbine costs

will peak phasing out of ISTS waivers

Policy framework and market mechanisms driving the industry


nlH 3

Renewable Energy Certificate

Green Energy Open Access Ministry of Power (MoP)

(REC) Mechanism: Empowering

Rules and Grid Non- Trajectory: Clear Roadmap for

Market Participation

Discriminatory Access (GNA): Renewable Energy Expansion

The REC mechanism has

Enabling Seamless Integration The Ministry of Power (MoP)

emerged as a pivotal instrument

Indias commitment to ensuring trajectory sets Renewable

in promoting renewable energy

fair and equitable access to the Purchase Obligation (RPO) targets

adoption. By allowing the trading

grid is exemplified by the Green until 2030, aligning with Indias

of excess RECs among commercial

Energy Open Access (OA) rules and ambitious plan to achieve 500

and industrial consumers and

Grid Non-Discriminatory Access GW of renewable energy capacity.

distribution companies, this market-

(GNA) provisions. The Green OA This trajectory includes separate

based mechanism incentivizes

rules streamline the approval wind RPO targets, acknowledging

stakeholders to actively engage

process, facilitate banking of excess the significant potential of

in the renewable energy market.

energy, and provide incentives wind power and stimulating its

Notably, the flexibility in REC

for renewable energy projects. further development. Moreover,

pricing through power trade

Simultaneously, GNA ensures that the MoP trajectory introduces

and the removal of expiry dates

all market participants have non- separate obligations for hydro

until compliance enhance the

discriminatory access to the Inter- and energy storage, emphasising

attractiveness and stability of REC

State Transmission System (ISTS). the governments commitment

transactions. These measures foster

These policies empower renewable to advancing these technologies.

a vibrant marketplace for renewable

energy generators and consumers, These targeted trajectories provide

energy certificates, encouraging

enabling them to access the grid a comprehensive roadmap for

market participants to contribute to

seamlessly and contribute to the renewable energy growth, guiding

Indias renewable energy goals.

growth of clean energy sources. the industry towards a sustainable and diversified energy mix.

Company overview

KP Energy Limited stands at the forefront of the wind energy industry, creating a niche position for itself in the wind energy value chain, by offering cutting- edge Balance of Plant (BOP) solutions that drive sustainable development of utility-scale wind farms. From the initial stages of project conceptualization to the commissioning and ongoing maintenance throughout its lifecycle, KP Energy is involved in the entire wind farm development value chain. Operating primarily in Gujarat, India, the Company provides comprehensive services encompassing site identification, site preparation, construction and erection, power evacuation, and operations and maintenance.

With an unwavering commitment to sustainability, KP Energy plays a vital role in coordinating diverse activities related to utility-scale wind farm development. By seamlessly integrating these activities, the Company delivers turnkey solutions to its clients. This holistic approach enables KP Energy to revolutionise the renewable energy landscape and contribute to a greener future.

Business performance discussion

The Company witnessed a remarkable year of growth and profitability, achieving outstanding results across key performance indicators. With a remarkable growth rate of 74% year on year, the top line surged to D442.4 crore in FY23, while the EBITDA margins improved from 13.6% in FY22 to an impressive 16.2% in FY23. This success translated into a recordbreaking Profit After Tax (PAT) of D43.9 crore, representing a remarkable growth of 140% compared to the previous year.

These exceptional achievements were made possible through the unwavering commitment of the Companys dedicated team, who ensured the timely delivery of projects and maintained superior project execution standards. Additionally, the Company reached a significant milestone, surpassing a cumulative renewable capacity of approximately 1 GW, including projects under development.


With increasing wind and hybrid energy installation, and enhancing capabilities of the Company, the

outlook for its core EPCC business segment remains positive. This is further supported by the robust business pipeline of the Company in this segment. The Companys focus extends beyond its core EPCC business to include significant investments in its Independent Power Producer (IPP) segment. Building upon the initial success of an 8.4 MW renewable energy capacity, the Company has expanded its IPP portfolio by installing a 10 MWdc solar power project. This expansion has resulted in a cumulative installed capacity of 18.4 MW as of 2023.

Looking forward, the Company has outlined a strategic roadmap to further strengthen its position in the IPP segment. By 2025, the aim is to install 100 MW of self-owned power generating assets, capitalising on the tremendous growth potential in the renewable energy market. This strategic move paves the way for sustained long-term profitability. Furthermore, the Companys Operations and Maintenance (O&M) business is set to grow in parallel with the expansion of the EPCC segment. This cohesive growth strategy ensures comprehensive support for the Companys wind energy projects, enhancing operational efficiency and maximising their long-term value.

Business model

KP Energy has strategically structured its business model around three interconnected segments, each playing a pivotal role in its pursuit of becoming a prominent force in the Indian wind energy market.

Project based revenue

Annuity base revenue Annuity base revenue

engineering, procurement,

operations and independent power

construction, and

maintenance (O&M): producers (IPP):

commissioning (EPCC):

KP Energy understands the As an IPP, KP Energy not only

This segment encompasses the

importance of ongoing support develops and operates wind energy

Companys end-to-end solution

and maintenance to optimise projects but also contributes

for wind farm development. From

the performance of wind farms. to Indias renewable energy

site identification to construction

Through its O&M segment, the capacity. By generating clean and

and erection, KP Energy manages

Company focuses on efficient sustainable power, the Company

the entire project, ensuring

management and upkeep of actively participates in the countrys

seamless execution and successful

wind energy BOP, ensuring their energy transition and reinforces its


reliability and long-term value. commitment to a greener future.

These three interconnected segments form the core of KP Energys business strategy. By integrating their expertise and leveraging synergies, the Company has established itself as a comprehensive service provider in utility-scale wind farm development. With a strong focus on innovation and sustainability, KP Energy continues to drive growth and make significant contributions to the Indian wind energy market.

Key Financial Ratios

Financial Ratios

FY23 FY22 Variance (in%) Comments if variance is more than 25%

Debtors Turnover

12.04 24.70 51.27% Trade Receivable Turnover Ratio is decreased due to increase in debtors during the current year.

Inventory Turnover

3.08 1.89 (62.90%) Inventory Turnover Ratio is increased due to Purchase of Inventory at the end of current financial year which will be consumed in next financial year.

Interest Coverage Ratio

13.02 7.36 76.86% The increase in the Interest Coverage Ratio is primarily due to a significant increase in net earnings from operations as compared to finance costs during the year.

Current Ratio

1.23 1.23 0.20% -

Debt Equity Ratio

0.32 0.26 (21.29%) -

Operating Profit Margin (%)

16.22 13.56 19.60% -

Net Profit Margin (%) (After Tax)

10.03 7.30 37.46% Net Profit ratio is increased due to increase in incremental profit arising from considering VG DTL as an associate from current year compared to previous year as a subsidiary, consequently, share of Loss from an associate i.e. 50% is considered in consolidated profit and loss instead of 100% as per previous year. Also, Revenue growth and simultaneous focus on Cost control has also tributed to increase in Net proft Ratio.

Return on Equity Ratio

34.46 16.86 104.44% Return on Equity is improved due to Revenue growth in EPC Segment and consequent Increase in profit and repayment of term loan during the current financial year.

Technology Initiatives

Given the rapid pace at which technology is advancing and its immense potential to enhance organizational efficiencies, it is crucial for every Company to harness the substantial benefits that technology can offer to their operations. At KP Energy, we have proactively embraced technological advancements to optimize our operations, elevate operational effectiveness, and fortify project execution.

To this end, we have recently integrated SAP Business One into our operations, spanning functions such as Financial Management,

Sales and Customer Management, Purchasing and Inventory Control, Production Planning, Business Intelligence, Analytics, and Reporting. This implementation is poised to refine processes, provide deeper insights into our business, and facilitate swift decision-making based on real-time information, thus empowering us to steer growth that is both sustainable and profitable.

Furthermore, our commitment to leveraging technology extends to our Human Resource Management, where we have adopted the Keka platform. This platform facilitates the enhanced management of human resources, boasting features that encompass leave management, attendance tracking, performance evaluation, and expense monitoring. Through these advancements, we are dedicated to driving operational excellence and fostering an environment of continuous improvement.

Risks and concerns

Type of risk

Impact Mitigation strategies

Regulatory risk

As a part of the dynamic renewable Constant monitoring and engagement: We maintain a
energy industry, we operate within proactive approach by closely monitoring government
a regulated space that is subject to and regulatory developments. This enables us to
government and regulatory policies. anticipate and adapt to potential changes in the
Changes or amendments in wind wind energy policy landscape. We actively engage
energy policies or power evacuation with relevant stakeholders, participate in industry
facilities can potentially impact our associations, and provide constructive feedback to help
industrys performance, including shape favourable regulatory frameworks.
our operations. Adverse alterations
to the regulatory framework may
disrupt the stability and predictability
of our business, necessitating agile
adaptability to mitigate potential


Our revenue streams are closely tied • Strengthening customer relationships: We focus on


to capital expenditures in the wind fostering long-term relationships with Independent
energy sector, primarily driven by Power Producers (IPP) and Captive Power Producers
Independent Power Producers (IPP) (CPP). By building strong partnerships and delivering
and Captive Power Producers (CPP). value-added services, we aim to enhance customer
Therefore, fluctuations in the capital loyalty and retain a stable base of customers who are
expenditure scenario and cycle, such committed to ongoing capital expenditures.
as reduced investments by either • Diversification of revenue streams: We actively
IPPs or CPPs, have the potential explore opportunities to diversify our revenue
streams within the wind energy sector. This
performance. We acknowledge the involves expanding our services to include project
development, and operations and maintenance,
with the capital expenditure dynamics or power generation as an IPP. By diversifying our
revenue sources, we reduce our reliance on a single
revenue stream and enhance our resilience to
potential fluctuations in the capital expenditure cycle.


The process of project development • Robust risk assessment and management: We

development risk

entails various risks, ranging from conduct thorough risk assessments for each
obtaining building permits and project, identifying potential risks and developing
acquiring suitable land to managing mitigation plans. This includes early identification
logistics and Right-of-Way (RoW) of potential challenges related to building permits,
challenges. These uncertainties land acquisitions, logistics, and Right-of-Way
expose our business to potential (RoW). By proactively addressing these risks, we
project delays, cancellations, or write- aim to minimise the likelihood of project delays,
offs, which can significantly impact cancellations, or write-offs.
profitability. Furthermore, project • Strengthening project planning and execution:
delays often lead to cost overruns, We continuously enhance our project planning and
further exacerbating the potential execution capabilities to ensure efficient and timely
delivery. This includes conducting comprehensive
feasibility studies, optimising project timelines, and
addressing project development establishing effective project management processes.
By improving project planning and execution, we aim
strategies to minimise their potential to reduce the likelihood of cost overruns and mitigate
the potential impact on profitability.
• Collaboration and partnerships: We actively
collaborate with relevant stakeholders, including local
authorities, communities, and suppliers, to streamline
project development processes. By fostering strong
partnerships and maintaining open communication
channels, we aim to address project development
uncertainties more effectively and minimise potential

Internal control systems and their adequacies

The Company maintains robust internal control systems that are appropriate for its size and nature of business. These systems are designed to ensure the safeguarding of assets and prevent unauthorised use or disposition.

They also ensure that all transactions are properly authorised, accurately recorded, and reported in accordance with the Companys policies and procedures. The adequacy of the internal control systems has been reviewed by the Audit Committee and management, resulting in necessary improvements being implemented to enhance their effectiveness.

Human resource development and employee relations

At K.P. Energy, we recognize that our human resources are a vital asset and key drivers of our growth. We firmly believe that the success of our Company is intertwined with the success of our employees. With this in mind, we are dedicated to investing in the development of our workforce and establishing our reputation as an employer of choice in the market. Throughout the year, we focus on nurturing a culture of collaboration and mutual respect, resulting in healthy and harmonious employee relations across all levels. We also organised an award ceremony Beyond Boundaries to recognise and facilitate good performance of employees across different domains. Our commitment to maintaining strong relationships with our employees remains unwavering.

Cautionary statement

Statements in the Management Discussion and Analysis and other parts of the report describing the Companys objectives, projections, estimates and expectations may be forward-looking statements. Actual results may differ materially from those expressed or implied due to various risks and uncertainties. Important factors that could make a difference to the Companys operations include economic and political conditions in India and other countries, in which the Company may operate. Other factors that may impact the Companys operations include volatility in interest rates, changes in government regulations and policies, tax laws, statutes, and other incidental factors. The Company does not intend to update these statements.