GK Energy Limited (GKENERGY) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to GK Energy Ltd. Q1 and FI27 earning conference call hosted by Churchgate Advisory, Private Ltd. As a reminder, all participant line will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. I now hand the conference over to Mr. Gopal Kabra, Chairman, MD, and CEO of GK Energy Limited, India. Thank you, and over to you, sir.

Thank you very much, and very warm good afternoon to everyone. I, Gopal Kaza, Chairman, Managing Director of GK Energy, welcomes you, everyone. I am very glad that all of you have joined us today for our investor call. Along with me, Mr. Sunil Malu, our CFA, is also present. We hope you all had a chance to go through our investor presentation uploaded on the stock exchange. We will share our key operating and financial highlight for the quarter ended June 30, 2026. We have started FI 2027 on a positive note, delivering our highest ever quarterly revenue. Standalone revenue from our operation increased by 71.1% year-on-year to Rs.505 crores. Compared to Rs. 295 crore in Q1 of FY2026. EBITDA increased by 47.7% to Rs. 86.1 crore with an EBITDA margin of 17.05%. Pat profit after tax increased by 61.6% to Rs.59.7 crores compared to 36.9 crores in the same quarter last year. Our order book as on June 2026 including order received post-June was Rs.541 crore, providing visibility for execution over coming quarter. On the operational front, we installed 24,118 system

during quarter 1 FI27, more than double

the 10,827 system installed in the quarter 1 last year, with commissioning of 109 megawatt of renewable energy capacity during the quarter. With this, our collaborative installation base has crossed 1,64,500 systems and 726 MHz of renewable energy capacity in a decentralized way. Today, our network covers more than 7,500 villages and is supported by a workforce of over 1,500 people and our own logistic fleet of 40-plus vehicles. Our growth strategy continues to build around technology-defined, low-capex models supported by our OEM-ODM manufacturing ecosystem. We control critical raw materials and work with multiple manufacturing partners, allowing us to maintain quality, supply availability, and cost efficiency while keeping fixed capital requirements relatively low. Our decentralized warehousing, logistics, and field execution network further enable us to scale across geography without requiring proportionate investment in fixed infrastructure. From the market developing perspective, we continue to depend on Our presence across existing states while building the GK Energy brand across rural and residential market, village, block level, tier 2, and tier 3 cities. Our presence across more than 7,500 villages built over 18 years provided us with direct access to communities where renewable energy adoption is increasing day by day. We are also leveraging our network, our established ruler present, to expand our offering across solar pump, rooftop, solar, and other RE solutions. Our immediate focus remains on strengthening our solar agriculture pumping business and scaling up rooftop with a similar pace to achieve the better market share. Our long-term vision is to enter across the other available opportunities like BES and hybrid energy solutions. Looking ahead, our objective is to build GK Energy into one of India's most trusted renewable energy brands. We intend to deepen our presence in existing markets, enter new geographies. In coming future, as and when required, while maintaining execution discipline and following our low capex approach. Our long-term vision, as we have shared, is to reach 1 million houses with our system placed with them, as well as the 1 billion enterprise in decentralized renewable energy. With this, I would like to thank everyone for joining us today. Now, I request the coordinator to open the floor for the question and answer. Thank you.

Thank you, Samus. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question comes from the line of Bhagwat with Prosperity Wealth Management. Please go ahead.

Thank you for the opportunity and congratulations for the strong quarter reasons. My question is on the order book. The current individual order book of around 5412 seems relatively modest compared to the company's growth aspirations. Please share your expectations for the order info over the remaining quarters of SI27 and based on the order sideline, are you confident of achieving our growth guidance of doubling revenue in SI27?

Thank you, Bhagavadji. So, this order book is as on today, right? So, we are in just first week of the August, and we are very confident. If you see what we have told, we have delivered, and we are trying to deliver in a better way. Looking towards the current market scenario with the securing of this order book, and we will be expecting some more order in coming time. Phase 6 of Margeltala has just got submitted, and we are expecting some order there as well. And further, Phase 7 of Margeltala is also there in the pipeline. So, this will enable us to achieve what we have said. In H1 and H2, we are expecting from the PMGUSU. 2.0, as well as the rooftop systems.

Okay, so the growth guidance is the impact of 25% of WVS.

We are definitely on that track only.

Okay. Okay. So my second question is if you could comment on the reasons for the strike margin competition in Q1 and what EBITDA track margin range should we expect for the whole year FI27 and the historical EBITDA of 19-20% margin still sustainably.

See, as I have given the guidance, when we had a last con-call also, we said that our PAT will be remaining two digits, and that is there. And I have already given the indication that we may expect a little bit down in the last con-call. So whatever we have said is getting maintained.

Okay, and we are expecting

profit to remain in the same line what is been achieved in the quarter 1.

Okay, okay. Thank you for that. And if I may ask one more last question. So, with EM process 2.0, expect it to write the next phase of solar farm resolutions. So, you see, it updates the current status of this scheme, and when do you expect the phase index to be released?

See, as I've already mentioned last call also, quarter three is what I have indicated, and I'm very much clear that it will come by quarter three. As of now, with what the fact and figure I know, if any update is there, we will update, you know, as and when it will come to us.

Okay. Isn't it the PMKUSM 2.0 is getting delayed? So, despite that, are we confident of doubling this revenue from the other schemes?

No, we have considered in Q3 only. In my last call also, I said that PMKUSM 2.0 will come in Q3, not before. So, it is well planned and it is going as per that.

Okay, that's right. But I'm just trying to be in this scenario where it gets delayed. As per our expectation, it gets delayed from Tuesday. Still, are we confident that from other states we can talk about the guidance?

See, it's not like only about the GK Energy's business. The PM Kusum 2.0 is required for the nation, and it's required for everyone. So, I'm not thinking that it won't come. As a businessman, we always remain very positive. But in case what you are saying, yes, there would be slight impact, but in that position, we will accelerate our rooftop business to mitigate the gap.

Okay. Thank you for your answer. It's gratifying the system, and the order is for this process.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Ashish Ogunlawar with Invesc Investment. Please go ahead.

Hi, Gopalji. I just wanted to check on PM Kusum again. There were certain comments from the minister in the assembly that the money basically has been subsumed in several departments of the government now. So, I think there was a press release also to that effect that it's being distributed to different ministries and through that it will come. So, what is the exact status? Because you just said that Q3, you were expecting Q3 to be released by the government that way.

Ashiji, if you look towards that press release, it is the answer to some of the question has been raised in the legislative assembly. It wasn't related to directly on the PM Kusum or the thing. So that question has been answered by that press release. So I don't consider that press release have any direct relation with PM Kusum 2.0. So if you just see the press release, once again, you will understand what I am trying to say. That this is that press release came in the answer of the one of the legislative assembly question reply.

So, but that mentioned the amount has been dispersed to various ministries and through that it will come on, but it was not clear as to how this is going to entirely take shape. So, you are still saying that whatever is the plan, maybe next two-year, three-year, five-year plan that is going to come, that will be announced by Q3 as such by the government, some form or shape that will take.

See, that overall what was, you know, clarification came. It was all scheme to get the ruler development. So, there was various scheme has been discussing how the overall ruler energy development can take place. So, we are really very positive, very much clear. Yes, we are going to have the same business lines of the coming decade even, I would say, because this is the area PM Qusum 2.0 and the PM Qusum 2, which has been very well clear that only solar pump is a successful model. Remaining models are still underperforming. The performing model with the proven fact is going to help. Right.

But, sir, any indications as to what the quantum or whatever? I mean, you've been close to the Maharashtra government as well as the center. Any sense on how is it going to be or should we wait only? That is the only option that is there. Because a lot of flow for every company depends on that, and we are seeing lackluster performance by a few of the companies in the sector because of the delays, basically. So, you being in March, probably that has helped, but otherwise it's not been as great for other companies.

Ashiji, first of all, the country's 70% solar pump business done in the Maharashtra, and so it is fact for everyone. And second point, the representation from the industry and the SNS has been already given, and every state want maximum quantum to be taken under PMQSUM 2.0. So we are expecting the much more bigger volume multiplied numbers than PMQSUM 2.0. Yeah, means I'm going to say 1.0 shall be the multiplication number in 2.0.

Great. Sure, sir. Hopefully, things fall in place again for the sector on the basis.

Thank you. Thank you.

Our next question comes from the line of RO with Tynum Capital. Please go ahead.

Yes, sir. Firstly, congratulations on the structural quarter. I just wanted to highlight the management recently

said that they are targeting approximately 3,000 crore in revenue.

Compared to the quarter, it is just, I think, 515 crore.

So, how do you plan out to achieve that number in the next three quarters?

So, see, if you see the growth trajectory in last couple of years, you will see that quarter one always remain 15% to 20% of our annual volume. And looking towards that growth trajectory, we are on track because quarter one is always lowest in term of the business and the maximum business come in the H2 and more specifically quarter four. So, quarter 4 goes around 35% to 40% of the business in some of the years.

So, this is what the scenario will continue.

So, we are expecting and able to reach the given set targets. So, sir, for the remaining quarters, are you expecting the same year on growth? Like this quarter, it was 70%.

So, are you expecting the same quarter growth?

It will slightly plus-minus would be there, but yes, we are expecting a good growth. Okay, sir. Thank you, sir.

Thank you, sir. Thank you.

Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Our next question comes from the line of Maitri Shah from Sapphire Capital. Please go ahead.

Hello?

Yes? Yes?

Yeah, hello, Master.

Mastery, your voice is very low.

Is this clear now?

Yes, it's clear.

Yeah, hello. Sorry for the interruption. Just one question. So, you mentioned that our brump volume grew close to double this quarter, while the revenues have grown close to 55%. Any sort of discrepancies we're seeing in the realizations being lower due to increased competition? Just some color on that, yeah.

See, number-wise growth is there, as you have already corrected. Yes, realization has been low per pump, but the overall volume is growing up.

Yeah, hello. Going forward, we see these realizations to be still muted with the new schemes coming in or since the demand is going to see a rise again. We see the realizations kind of climbing back up. How are you picturing the growth for this year in terms of volume and in terms of realization?

Maitri, can you repeat your question, please?

Yeah, hello. Is this better? Hello.

Yes, please go ahead.

Yes, please go ahead. Now with the new schemes coming in, the P&C, we are expecting the 2.0. The demand will probably be a much bigger hike going forward. Are we expecting the realizations to also inch up? Or we are expecting them to stay stable or maybe even go lower because of the increased competition?

See, as a businessman, yes, we want that the realization shall go up. And with the practical approach, I feel the realization will remain the same what it is, unless until something happens drastically. So that is unknown thing. So we can't answer it right now. And looking towards market scenario, yes, realization shall remain the same. This is what my expectation. Yes.

Okay, so the majority of the growth push will come from us increasing the volume going forward.

Yes, increasing the volume as well as the price variation may come if specifications get changed in PMQ 2.0. So it relatively depends on how the specifications get differed.

Got it, okay. Yeah, that is it for myself. Thank you.

Thank you. Next question comes from the line of Harshal Solanki with Equitry Capital. Please go ahead.

Hi, sir. Good afternoon. So, I have three questions. First is, you said, Kutum 2, the work should start by Q3. So, I was assuming that there will be a 2-3 month lag before the work starts and the scheme is announced. So, should we… I assume that the announcement is pretty soon if the work has to start by Q3, if you can throw some light on this part.

Harshal ji, Kusum 2, as I said, quarter 3, so definitely I am expecting the end of the quarter 3 should start. As of now, I am having that, you know, understanding. This is what I would say right now for that. And it has to get started because if it is get delayed, then overall scheme will get impact. So, I don't think so. It will get further delay. It will be going to start in quarter three.

Okay. So, the announcement may come by September and the vote starts by end of the quarter.

Yes, I am expecting that only.

Okay, and the second is, if you can help me with the, like, Of the revenue in terms of solar pump and rooftop and the volumes also of the 24,000 systems, it includes both, right? Rooftop and pumps. I wanted the breakup of the two.

Uh, rooftop has just started for us.

Uh, so it is around 5% is rooftop and the 95% pump. But when I'm comparing my order book, so I have a 20% order book from the rooftop and 80% from the pump. So it's clear indication that yes, the rooftop is also getting picked up and generating revenue, going to generate a revenue for the company.

Okay. Got it. And in the phase six, are you seeing? Any implemented realizations or the things are continuing to remain the same?

As I earlier answer, I expect that my wish is the realization shall increase more, price shall increase more, but practically shall remain the same. I think so. Still, the price has been not open, so I cannot comment on that what will be there.

Okay, I know so. Thank you so much.

Thank you so much. Next question comes from the line of Bhagwat. A follow-up question from Bhagwat with Prosperty Wealth Management. Please go ahead.

Thank you for the follow-up opportunity. So my question is regarding our vision of reaching $1 billion revenue by 2030. So how do you expect the business model to evolve? Will the company continue with the asset life strategy or do we expect backward integration to manifestation to support this role?

Uh, see, uh, backward integration, uh, I'm not very clear that we would like to have the much more backward integration thing because the product what we are having, there are lots of manufacture already established there in the market. They have done the huge capex and we are leveraging the available ideal capacity in the country. So that is giving us why we are able to build our margin very strongly. So, that would be the part on the backward integration of the answer question what you have said. And definitely, we are looking towards a certain future opportunities that is in pipeline. So, I think we will be able to give to all you people, my shareholder, everyone, when the right time will come. So, it is under consideration and the thinking right now. So, we will be able to give the certain clarity in coming time. How the overall planning is, will be there, with the add-on of the product.

Okay, and do you expect a few in which one would be the growth driver to achieve this target, or any other teams that you expect to do the major contributions?

Bhagwan Ji, definitely PM Kusum is going to be the one of the driving factor, but we are not targeting only one driving factor. So we are having the multiple boxes. These all things will have the driving force to become a $1 billion enterprise. So we are not going to rely only on one product and one screen. So we are going to have the product mix to achieve said target. So, in case if one of the products won't perform by 2030, so other products will definitely deliver to become a $1 billion enterprise.

Okay. Thank you so much for that.

Thank you. Our next question comes from the line of Smith Gala with RSP and Venture. Please go ahead.

Yeah, thank you for the question. Just one question from my side. We have seen a drastic reduction in the interest expense. So how has the interest expense reduced from 11 crore in March 26 quarter to 5 crore?

So, first of all, we were having the surplus receivable cash available with the company because we have the very good receivable done in the financial year ending in the March. That's one point. And we are right now raised the fund to the IPO for the working capital. So, that is also supporting us for the not having the bank debt. We have utilized the fund raised by the IPO to support our working capital. Thank you.

So, this will stay in this range or it will reduce even further going forward?

It shall stay in this range.

Okay, thank you.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press star and one on their test on telephone. Reminder to all the participants, if you wish to ask a question, you will press star and 1. Thank you so much, ladies and gentlemen. As there are no further questions from the participants, I now hand the conference over to Mr. Gopal Khabaraj, Chairman, MD, and CEO of GK Energy Ltd. for the closing remarks. Thank you. And over to you, sir. Thank you.

I would like to thank everyone for joining on the call. I hope we have been able to respond to all of the questions adequately. For any further information, we request you to please get in touch with our investor relations team, or you can directly contact the company's team, as mentioned in the presentation. I wish everyone shall stay safe, stay healthy. Thank you. Thank you, everyone. One second to join us.

Thank you so much, sir. Ladies and gentlemen, on behalf of Bill & U Ltd, let's conclude this conference. Thank you for joining us, and you may now disconnect your links.