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KP Green Engineering in FY26: Growth accelerates, order book stays strong, and capacity bets get tested

KP Green Engineering Limited ended FY26 with another step-up in scale. Consolidated total income rose to INR 1,250 crore from INR 702 crore in FY25, a 78% year-on-year increase. Profitability also improved meaningfully: EBITDA increased to INR 249 crore from INR 115 crore, and profit after tax rose to INR 136 crore from INR 73 crore.

The investor presentation and the May 2026 earnings call position FY26 as a year of execution and ecosystem build-out at the Matar facility. Management framed its business model around multiple product verticals that each have their own approval cycles and customer ecosystems. In that framing, growth is not just about production capacity, but about converting approvals into repeatable tender wins and steady execution.

FY26 financial snapshot: higher scale and better margins

The consolidated income statement in the presentation shows that revenue from operations reached INR 1,246 crore in FY26, up from INR 695 crore in FY25. EBITDA margin expanded to about 20% from 16%, reflecting operating leverage and a stronger product and execution mix.

H2 FY26 also remained strong on a year-on-year basis. Total income in H2 FY26 was INR 714 crore compared with INR 436 crore in H2 FY25, while EBITDA more than doubled to INR 147 crore from INR 71 crore.

Two expense lines that investors will likely keep tracking are interest and depreciation. Interest cost rose to INR 41 crore in FY26 from INR 9 crore in FY25, while depreciation and amortisation rose to INR 23 crore from INR 6 crore. Management attributed the increase in borrowing primarily to higher working capital needs and inventory build-up in response to geopolitical uncertainty.

Order book and approvals: the execution engine

As of March 31, 2026, the company reported an order book in hand of INR 1,831 crore. Management stated during the call that it expects to execute the order book during FY26-27, offering near-term revenue visibility.

A meaningful part of the discussion focused on tender pipeline and conversion. Management indicated that the tender pipeline could exceed INR 3,000 crore, while also emphasizing that winning depends on pricing discipline because the company does not want to compromise on margins.

The presentation highlights a broad set of empanelments across public sector and government-linked customers. These include state power transmission entities such as GETCO, RVPN, CSPTCL, MSPTCL and others, along with road and infrastructure bodies such as NHAI and state PWDs, and railway-related approvals such as RDSO. On the call, management said its success ratio in tendering is around 60% to 70%.

The call also clarified order book composition. Management stated that about 22% to 23% of the order book is from group companies and the balance is external. That mix can vary depending on project timelines and urgent requirements within the KP Group.

Capacity, capex and the Matar galvanizing proposition

KP Green Engineering’s installed manufacturing capacity is stated at 4,00,500 MTPA, comprising 3,10,500 MTPA manufacturing capacity and 90,000 MTPA galvanizing capacity. A central positioning point in both the presentation and the call is that the Matar facility houses Asia’s largest hot dip galvanizing plant.

Management disclosed that FY26 capacity utilization was 1,24,500 metric tons out of 4,00,500 plus metric tons, implying about 30% to 34% utilization. For FY27, management suggested utilization could rise toward 40% to 60% based on the order book and expected execution.

This gap between installed capacity and utilization led to direct investor questions about why the company undertook such large capex ahead of demand. Management’s answer was that much of the capex was funded from IPO proceeds and was planned with a four to five year horizon, rather than a short-term utilization lens.

The presentation’s ESG section outlines the galvanizing process as a 100% encapsulated system designed to capture fumes during pickling and dipping, neutralize acidic vapors through scrubbers, and retain heat to reduce energy requirement for the 450°C zinc bath. It also discusses a transition toward green hydrogen for heating and zero liquid discharge principles.

On the call, management added that the galvanizing plant is powered with LPG blended with green hydrogen within regulatory limits of about 20% to 25%. Management did not claim a large cost advantage from blending, but presented it as an ESG and operational resilience initiative.

What management guided for FY27, and what remains uncertain

KP Green Engineering, as a BSE SME listed entity, does not provide formal quarterly guidance in these documents. Still, the concall contained several forward-looking statements that are relevant for FY27 expectations.

First, management referenced a group-level vision of 40% to 50% year-on-year growth. For KP Green Engineering, management said it is looking toward that level as a minimum, but did not commit to a specific revenue number.

Second, management guided to try and maintain EBITDA margins in a 16% to 20% range, explicitly noting exposure to raw material prices and fuel costs. Management said larger contracts contain escalation clauses, while in other cases inventory stocking is used to protect margins.

Third, management indicated that capex will continue in FY27, with a focus on backward integration. A rolling mill was mentioned as a major potential project that could improve raw material availability and support margins, but management described it as being under internal discussion and did not provide a capex quantum or commissioning timeline.

Finally, working capital will remain a key variable. Investors asked repeatedly about rising inventory days and the sharp increase in interest cost. Management’s explanation was that inventory was deliberately increased as a hedge against geopolitical disruptions and input availability. Whether this becomes a sustained practice or normalizes will depend on external conditions and the company’s ability to shorten the cash conversion cycle while scaling.

Key takeaways

KP Green Engineering’s FY26 results reflect a sharp step-up in scale and profitability, supported by a strong order book and expanding approvals across multiple infrastructure-linked verticals. The Matar galvanizing facility is central to the company’s operational narrative, both as a capacity moat and as an ESG-aligned manufacturing proposition.

The next phase for investors to watch is execution quality at higher utilization, and the financial discipline required to support growth without stretching working capital too far. Management has indicated that it expects a meaningful rise in utilization during FY27 and will aim to hold margins within a defined band. In parallel, new product lines and backward integration plans suggest the company is building for a broader manufacturing footprint, but those initiatives remain early-stage in terms of disclosed timelines and return metrics. */