Observations from the Conference Key Participants and Developments Despite the subdued atmosphere, a few major industry players stood out: Understanding the Semiconductor Assembly Process A typical semiconductor assembly process involves multiple steps, starting from wafer production in a fabrication facility (FAB) and ending with the final packaged chip: Wafer from FAB → Stealth Dicing → Thinning → Die Lamination → Wire Bonding → Encapsulation → Solder Ball Attachment → Final Packaging At present, India is primarily focused on OSAT, handling the later stages of this process. However, efforts are underway to move up the value chain. Major Developments in India’s Semiconductor Industry Tata Electronics: Building India’s First FAB Micron India: Facing Delays, But Moving Forward Kaynes Semicon: Expanding OSAT Capabilities Our View India’s semiconductor journey is currently focused on integrating into the global supply chain as an OSAT hub. However, the long-term vision is to establish a strong domestic fabrication ecosystem. While the government is committed to this sector, execution will take significant time, and building a robust ecosystem will be a slow process. Investors should remain cautious when companies announce grand plans in the semiconductor sector. While the ambitions are high, the execution challenges are substantial. Many of these capabilities being built today will remain low on the value chain for the foreseeable future. The transition from buzzwords to actual production will be long and complex. Until then, the Indian semiconductor sector remains a work in progress. ‍

India’s agricultural backbone is undergoing a structural shift — not just in how crops are grown, but in how farmlands are powered. With over 14 crore farmers in India and only 3 crore currently having access to pump infrastructure, the gap is glaring. Among these, only 10,000 pumps are solarized. The rest rely on diesel or electricity — both of which are costly and inefficient over time. This is where the PM KUSUM scheme steps in — a government-backed solar pump initiative that’s proving to be one of India’s most promising rural energy transformations. The estimated opportunity size for the solar pump and services sector? A staggering ₹12.9 trillion, with pumps making up just 15% of that total. This is not just a green energy trend — it’s a multi-year structural growth story grounded in real demand, cost savings, and long-term policy commitment. The Economic Case for Solar Pumps What makes this megatrend so compelling isn’t just the market size — it’s the logic behind it. For governments, subsidizing electricity for farmers through DISCOMs has been a decades-long fiscal drag. Setting up grid infrastructure for electric pumps costs nearly ₹2 lakh per farmer, plus an additional ₹1 lakh annually in electricity. In contrast, a ₹4.5 lakh solar pump requires the government to pay only about ₹3.5 lakh after the farmer’s contribution — and recovers its cost within three years due to energy savings. For farmers, switching to solar means no recurring electricity or diesel bills. They save nearly ₹50,000 annually while gaining reliability and autonomy. Even surplus energy, when not used for irrigation, can be routed back to the grid — with players like Shakti Pumps owning patents to enable this energy sell-back feature. Shakti Pumps: Positioned for Scale Shakti Pumps, one of the key players in the sector, validated the megatrend during its Q1FY25 earnings call. Despite a rain-hit quarter and upcoming elections in major states, the company posted a 30% revenue growth on a ₹1,371 crore base and guided for ₹500 crore in quarterly revenues. Over the next 3–4 years, they expect 25–30% growth annually. Margins have also improved due to multiple levers: advance raw material planning, better solar panel negotiations, and vendor-side efficiencies. Even under conservative pricing scenarios, the company expects to maintain a 16% margin floor — thanks to softening panel prices and improved operating leverage. Importantly, Shakti is not just sitting on strong financials — it’s executing. The company’s current capacity supports ₹2,400 crore in annual revenue, but by FY27, it will double pump production from 5 lakh to 10 lakh units. This will enable potential topline of ₹5,000 crore in coming years. The capex of ₹250 crore is already 80% funded, with no banking debt involved. Part of this will also fund its new EV motor project for 2W, 3W, and bus segments. Oswal Pumps: Sector Confidence Reinforced Oswal Pumps, another major player in the space, addressed key industry concerns in a recent analyst meet. The biggest was whether pricing pressure would reduce margins as new players enter the market. The management made it clear: that won’t happen. Here’s why — 90% of the industry comprises EPC players with thin profitability (5–6% PAT). Only two to three companies are fully backward integrated. If anyone tries to lower prices, the rest won’t survive. At the same time, demand is too large for 2–3 players to cater to alone. So, price undercutting is simply unsustainable. The second concern was whether welfare schemes like Laadki Behen would delay payments or disrupt KUSUM execution. Oswal’s answer was firm — no. Solar pumps remain a high-return investment for the government, with savings reaching nearly ₹10 lakh per pump over its lifespan. Free electricity schemes may win headlines, but they don’t replace long-term cost logic. Finally, Oswal emphasized that payment cycles are improving. The government is aware that faster vendor payments translate to quicker execution — a win-win as it races to complete KUSUM 1 targets by FY26 and scale up for KUSUM 2. KUSUM 2 and the Road Ahead As of mid-2025, 7 lakh solar pumps are still pending under KUSUM 1. The government aims to complete this by FY26. Planning for KUSUM 2 is already underway, with 2 million pump installations targeted for FY27. Notably, Components B and C — which enable feeder-level solarisation — are expected to merge, creating deeper opportunities for infrastructure-led revenue streams. Pilot projects under Component C, like the Ajmer feeder solarisation (₹150 crore, 300 pumps), are already being executed. Once validated, these models could unlock significant growth for players with on-ground presence and execution capabilities. Who Stands to Win? In a market of this scale, not every player will benefit equally. Caprize believes the winning combination includes: Likely leaders in this space: These companies have either the manufacturing control, the brand equity at the farm level, or the dealer networks to scale with minimal friction. Caprize View: A Structural Story, Not a Cyclical One The solar pump opportunity is not a “next-quarter” story — it’s a 4–5 year megatrend driven by fiscal logic, environmental priorities, and political continuity. From pump installation to energy resale, EV diversification to patented control tech — this space is rapidly becoming a hub of innovation and value creation. At Caprize, we believe themes like these — rural-first, policy-backed, and margin-disciplined — deserve serious attention from long-term investors.

On the morning of its stock market debut, Sambhv Steel Tubes stood tall. Not just as a newly listed entity on the NSE, but as a symbol of what sharp execution, operational discipline, and belief in India’s manufacturing potential can deliver. Sab Sambhv Hai was not just a tagline. It became a lived conviction. From Vision to Reality In a short span, Sambhv achieved what many considered improbable. It built one of India’s largest single-location integrated pipe manufacturing plants. It adopted and stabilized narrow-width HR coil technology, something rarely mastered in the domestic market. It migrated seamlessly across product types, from ERW pipes to galvanized pipes and stainless steel pipes. Even more impressively, it maintained a unique market position with costs comparable to low-grade players while delivering product quality that competes with the best in the industry. In July 2025, Sambhv listed on the National Stock Exchange. It marked a defining milestone not only for the company but also for India’s industrial growth story. Caprize and Sambhv: The Pre-IPO Bet In December 2023, Caprize invested in Sambhv’s first and only pre-IPO round at ₹37.5 per share. Less than 18 months later, that investment delivered a 3x return. This outcome validated Sambhv’s execution and Caprize’s investment philosophy. We believe in backing scalable businesses led by credible promoters. Sambhv fit that framework well, and the result reinforced why conviction matters when paired with operational clarity and governance focus. Key Lessons from the Journey Sambhv’s IPO journey offered valuable insights into what it takes to build and scale a company that is both market-ready and fundamentally strong. 1. Operational discipline is essential Plant design, production scheduling, capacity ramp-up — consistency in execution builds long-term credibility. 2. Governance and compliance shape outcomes Structures must be built early. Timely filings, robust board processes, and audit discipline matter more than ever. 3. Financial reporting must meet global standards IPO readiness demands detailed, clean, and timely financial documentation. Numbers must tell a story that institutional investors can trust. 4. Preparation takes longer than expected Even with strong internal systems, legal and regulatory preparation for listing is intensive. Internal timelines must stay aggressive, but public messaging should remain realistic. 5. Leadership maturity gets tested As a company transitions from private to public, promoter-founders must shift from instinctive decision-making to process-driven leadership. 6. Clarity and integrity outperform style Stakeholder communication becomes critical. Transparency and consistency build trust faster than optics. 7. Performance metrics must stay front and center Metrics such as raw material sourcing efficiency, capacity utilization, return on capital employed, and working capital discipline are fundamental to long-term valuation. 8. Working capital efficiency creates value Sambhv’s focus on managing working capital effectively improved its balance sheet and strengthened its IPO readiness. 9. Teams drive execution A successful IPO is not just the result of good products or visionary promoters. It is the outcome of strong, aligned teams across plants, finance, compliance, advisors, and investors. Looking Ahead The IPO marks a significant milestone, but Sambhv’s growth story is still unfolding. With ongoing capacity expansion, product diversification, and strong demand driven by India’s infrastructure cycle, the company is well-positioned to scale further. Caprize remains committed to supporting Sambhv beyond the IPO phase. We view this as a long-term partnership built on shared conviction, continuous improvement, and deep sector alignment. Final Word Sambhv’s story is proof that when ambition is matched with execution, the outcome is not just a strong listing but a business that earns the trust of every stakeholder. This is not just about valuation. It is about value creation — powered by vision, discipline, and people. Sab Sambhv Hai. And this is just the beginning.

Classic AI: The Foundation of Artificial Intelligence Classic AI, also known as rule-based AI, is the earliest form of artificial intelligence. It functions based on predefined rules and logic, making it highly effective in structured settings where data is well-defined. This type of AI follows a fixed set of instructions, ensuring accuracy and reliability. It is widely used in fields that require precision, such as machine learning models for classification and regression, search algorithms, and pattern recognition in image and voice processing. Classic AI demands significant software engineering expertise to develop and maintain its frameworks. Generative AI: The New Age of AI Generative AI represents a significant shift from traditional AI by focusing on prediction and content generation rather than computation. Unlike Classic AI, which calculates outputs based on defined formulas, Generative AI works by identifying and learning patterns from vast datasets, allowing it to create original content such as text, images, music, and videos. A prime example of Generative AI is GPT models, such as ChatGPT and DeepSeek, which generate text-based responses. DALL•E, on the other hand, creates images from textual prompts. However, this AI does not perform calculations. For instance, if you ask a Generative AI model for the result of 5 x 5, it will rely on existing data to retrieve an answer rather than computing it. If most datasets mistakenly record the answer as 24, the model may provide that incorrect response, as it lacks the ability to perform calculations like Classic AI does. Agentic AI: The Future of AI Agentic AI is an advanced form of artificial intelligence designed to operate autonomously. Unlike Classic and Generative AI, Agentic AI does not just process information or generate content; it interacts with its environment, analyzes data, makes decisions, and takes actions accordingly. This type of AI is at the forefront of technological evolution, with applications in autonomous vehicles, AI-driven virtual assistants, and robotics. It has the potential to revolutionize industries by acting as an independent digital worker that not only executes tasks but also adapts and iterates based on real-world feedback. The Impact of AI on Industries Since the 1990s, India has been a major player in IT outsourcing, benefitting significantly from the global demand for software development and business process outsourcing (BPO). However, outsourcing has always faced challenges such as compliance issues, cybersecurity concerns, and data privacy risks. With the rise of Generative AI, a substantial portion of repetitive human tasks can now be automated. According to McKinsey & Co, AI and automation technologies could take over 60-70% of an employee’s workload in many industries. Presently, 65% of the code on GitHub is AI-generated, indicating the rapid transformation of the software development sector. The IT outsourcing market is estimated to be worth around USD 500 billion, while the insourcing market is valued at approximately USD 1 trillion. Similarly, the global BPO outsourcing market is worth another USD 500 billion. If AI adoption eliminates 40-50% of these industries, nearly USD 1 trillion in workforce-related costs could disappear, significantly reshaping the job market. Even if only 50% of these savings translate into consumer benefits, AI-based companies would still capture a USD 500 billion market that is only expected to grow. Our Investment Perspective For investors, the AI revolution presents both opportunities and risks. The space is highly competitive, and with technology becoming increasingly democratized, many companies are jumping on the AI bandwagon without truly innovating. When evaluating AI-driven companies, it is crucial to determine whether they are genuine leaders in the field or simply leveraging AI as a marketing strategy. Investors must analyze whether a company is using AI to create a sustainable competitive advantage or if it is just adopting AI for the sake of appearances. A real-world example highlights the unpredictability of AI investments. One of our portfolio companies placed a bid for a rapidly growing AI firm. However, after a routine Windows software update, the AI firm’s application became obsolete overnight, rendering its technology useless. The pace of AI evolution is staggering, and anchoring to a single AI model or approach can prove disastrous. Adaptability is key to survival in this ever-changing landscape. ‍

Cranes Business: A Major Growth Engine Last year, the cranes business contributed 20% to INDOFARM’s revenue. This year, it’s set to soar to 45-50% and is expected to account for a substantial 70-75% of revenue in three years. The company’s capacity is ramping up from 700 units per annum to over 4,300, and with it, so are its margins. INDOFARM projects a 15% PAT margin for the cranes business, bolstered by the addition of two high-value products. In terms of competition, ACE is the closest rival, but INDOFARM’s backward integration, standing at 60%, gives it a strong edge over ACE’s 10%. This integration helps INDOFARM achieve better margins, making it a formidable player in the market. Tractors: Unlocking Potential Through Financing and Expansion INDOFARM’s tractor business has a current capacity of 12,000 units per year, but it is operating at just 25-30% utilization. A significant hurdle for the company in the past was the lack of financing options for its tractors. To overcome this, INDOFARM took the bold step of launching Barota Finance, an in-house NBFC, to assist distributors and facilitate financing in a 100% financing-driven market. The breakthrough came when Kotak and HDFC Bank came onboard, providing the much-needed support to INDOFARM’s financing efforts. This development is a game-changer, allowing the company to expand its distribution network and increase its geographic footprint. Currently operating in just four states, INDOFARM plans to double its distributors and expand Pan India. With a mere 1% market share across the country, but already having a 10% market share in its existing markets, INDOFARM is set to triple its volumes. Additionally, with 40% backward integration, the company stands in a favorable position for growth. Strategic Focus and Future Growth Haryana, Uttar Pradesh, and Punjab contribute to 50% of INDOFARM’s sales, and with its robust growth plans, the company is looking to further strengthen its position. The cranes business is expected to grow at a 40% CAGR over the next five years, while the tractor business will grow at a more steady 20% CAGR. INDOFARM’s management, consisting of technocrats, has been a key driving factor behind the company’s success. The exceptional team operates with a lean structure, focusing on efficiency and innovation. Their state-of-the-art plant and facilities provide a strong foundation for sustainable growth, making INDOFARM a steady compounder in the market. Conclusion INDOFARM is on a fast track to becoming a dominant player in the cranes and tractors sectors. With impressive growth projections, a strong management team, and a clear strategy, the company is well-positioned for long-term success. As it continues to expand its reach and capabilities, INDOFARM is set to be a key player to watch in the years to come.

Company 1: Battery Mobility and Storage (Invested) This company is at the forefront of battery innovation, focused on solving two critical challenges: 1) increasing charging speed, and 2) extending battery life. They’ve achieved proof of concept and are now targeting a significant revenue growth, aiming for ₹2000 crore in revenue by FY25, up from ₹37 crore. Company 2: Food Court Rentals A food court operator/aggregator and management company with over 60 agreements under its belt. The promoter is street-smart and has established strong relationships with leading global food chains like McDonald’s, KFC, Domino’s, and Pizza Hut. With 2 million square feet under management, this business is poised to double its earnings every year for the next 4-5 years. Company 3: Data Centers (Invested) This company provides data center solutions, cloud-managed services, and software products/SaaS. They cater to enterprises, government digitization projects, and the banking sector. With a potential earnings CAGR of 80-100% until 2030, this business is on an exceptional growth trajectory. Company 4: Examination Security and Monitoring This company offers technology-driven security and surveillance solutions for examinations, elections, and large-scale events. With a total addressable market (TAM) of over ₹70 crore in exams alone, it operates as a monopoly in its niche. The business boasts over 50% RoE and RoCE, with a projected 50% earnings CAGR over the next 5 years. Company 5: Metals (Invested) An integrated TMT manufacturer with a 1000-acre plant setup. The promoter group is highly driven, and the business has the potential to quadruple its capacity over the next five years. With a target of ₹1000 crore+ in revenue in 7-8 years (up from ₹130 crore last year), this company is making big strides in the metals sector. Company 6: Make in India Manufacturing A contract manufacturer in the LED and consumer electronics space, partnering with top companies like Dixon, Amber, and PGEL. The promoters are exceptional, and the company’s state-of-the-art facility positions it for rapid growth. They aim to triple in size over the next two years and achieve a 10x growth in five years. Company 7: E-bus Manufacturer (Invested) India’s second-largest e-bus manufacturer, holding a 20% market share. With 1500 e-buses successfully deployed, the company is on track to improve earnings by 8x in just two years, capitalizing on the growing demand for electric buses in India. Company 8: Energy Storage (Invested) A bootstrapped company aiming to be a market leader in energy storage solutions. Their products, featuring ultra-long lifespans ranging from 8 to 30 years, will be a first-of-its-kind offering in the market. Company 9: Solar Pumps This company is involved in the EPC of solar pumps and rural marketing services. Having commissioned over 120MW of solar pumps for 25,000 farmers, they plan to expand their operations into an integrated solar pumps, EPC, rooftop solar, and allied services and supply chain company, addressing the entire solar value chain. Company 10: Consumer Retail A rapidly growing supermarket chain with 40+ stores in tier 2 and 3 cities, offering a range of products including food, non-food items, general merchandise, and apparel. With plans to expand to 100+ stores in the next three years, this company is growing earnings at an impressive 50% CAGR. Learning from Extraordinary Founders Meeting such skilled founders and promoters has been both educational and motivational. We’ve learned so much about business strategies, ground realities, and what it takes to scale exceptional companies. More importantly, these interactions have inspired us to do even more in our pursuit of wealth creation and value discovery. Future Plans and Wealth Creation As many of these companies go public in the future, we’ll continue to share more details on those we’re invested in and highlight wealth creation opportunities for our investors. We’re excited about the potential these businesses hold and look forward to being a part of their success stories. The journey of discovering such extraordinary companies continues, and we are committed to being a part of the change they’re driving in their respective industries. Stay tuned for more updates!

Last week, we had the opportunity to attend the Renewable Energy India Expo in Delhi, where we engaged with prominent companies in the renewable sector, including Waaree, Vikram, Jupiter, Insolation Energy, Rayzon, Navitas, and Premier, among others. Our discussions with industry leaders centered around key challenges and opportunities in the renewable energy landscape, particularly in the solar module manufacturing space. Here’s a recap of some important questions we explored and the insights we gathered from these conversations. 1. Is Overcapacity in Solar Module Manufacturing a Concern? With the rapid entry of both large and small players into the solar module manufacturing market, we wanted to understand the demand-supply scenario over the next three years. Answer:Despite the significant increase in capacity, there’s little concern about oversupply. In fact, industry players believe that even after 3-4 years, the demand-supply gap will persist. Currently, the rated capacity of the industry stands at 49GW, which is expected to grow to 92-95GW by FY28. However, it’s important to differentiate between rated capacity (the peak theoretical output), throughput capacity (the maximum practical output), and actual utilization (the real output). A rated capacity of 100GW, for example, results in a utilized output of about 50-60GW, which, with a 25% plant load factor (PLF), translates to an annual power output of only 15-18GW. Given India’s increasing energy needs, particularly in renewable energy, the country will require 120-150GW of new installations annually by FY30, leaving room for continued demand growth. 2. Will the Industry Collapse Without Government Support? A pressing concern is the sustainability of the renewable energy sector if the government withdraws critical support measures such as Basic Customs Duty (BCD), Anti-dumping Duty (ADD), and the Approved List of Module Manufacturers (ALMM). Answer:Most industry experts agree that government support is crucial for the sector’s growth, and they believe that measures like ALMM will remain in place for at least the next 4-5 years. The government is also considering the addition of Anti-dumping Duty and is in the process of finalizing an Approved List of Cell Manufacturers (ALCM) to complement the ALMM. This regulatory backing is vital to help companies scale rapidly, especially in areas like cell manufacturing. Over the next five years, we expect significant advances in the renewable sector, with greater focus on domestic cell manufacturing as the backbone of module production. 3. Which Companies Will Survive in the Long Term? Given that module manufacturing is largely considered a commodity play, we explored which companies are likely to succeed over the next few years. Answer:The key to long-term survival lies in backward integration, particularly into cell manufacturing, where most of the value addition occurs. Companies that invest in cell manufacturing will have a significant edge, as operating margins for module manufacturers, which are currently high at 14-15%, are expected to stabilize at around 10-12%. In contrast, cell manufacturers are enjoying exceptionally high margins of 60-65%, which are likely to settle around 30-35% over time. The takeaway here is that companies serious about building out cell production capabilities will be best positioned to thrive in the future. 4. How Easy Is It to Set Up a Cell Manufacturing Facility? Given the importance of cell manufacturing for the industry, we were keen to understand how challenging it is to establish a facility. Answer:Setting up a cell manufacturing facility is significantly more complex and capital-intensive than setting up a module line. A 1GW cell line requires a capital expenditure (capex) of INR 600-700 crore, compared to INR 100 crore for a 1GW module line. The process of cell manufacturing is highly sophisticated, and achieving optimal efficiency in the final product demands considerable technical expertise and effort. Currently, the industry’s capacity stands at 10GW, and this is expected to grow to 50GW by FY28. The ALCM, which is likely to be active by FY26, will push manufacturers to ramp up their capacities, and given the availability of funds, this aggressive expansion is feasible. However, only a handful of companies are expected to succeed due to the complexity of the process. 5. Government Concerns Regarding Windfall Gains in the Industry In August, former Minister of New and Renewable Energy R.K. Singh made strong comments about ALMM and how it had led to excessive profiteering by Indian manufacturers. He noted that module prices were much higher than they should be, considering the cost of production. Answer:Contrary to the minister’s statement, module manufacturers are not charging 23-24 cents, as claimed. Instead, the actual range is 14-16 cents. The suggestion that companies like NTPC should set up their own facilities if they believe the margins are excessive is a practical one, but the industry stresses that reasonable margins are essential for quick payback on investments. With India’s renewable energy targets being ambitious, module manufacturers need a supportive environment to scale up production and ensure the industry continues to thrive. In conclusion, the Renewable Energy India Expo provided us with valuable insights into the solar manufacturing sector and its challenges. While overcapacity is not a concern in the short term, government support remains essential for the sector’s continued growth. Backward integration into cell manufacturing is critical for companies looking to survive and succeed in the long run. As India moves forward with its renewable energy goals, the industry will need to balance the need for profitability with the push for rapid expansion, ensuring a sustainable and competitive market.

In the words of an old Chinese proverb, “When the wind of change blows, some build walls, others build windmills.” KP Energy (KPEL – Mcap 3000cr) has certainly chosen the latter, transforming itself from a telecom tower builder in 2010 to one of India’s leading Balance of Plant (BoP) solutions providers for wind projects and wind-solar hybrid projects. This is a story of growth, innovation, and a relentless drive toward renewable energy leadership. A Leading Force in Renewable Energy With over 850MW of capacity energized, 1GW of projects currently underway, and a further 1.5GW pipeline in execution, KP Energy is rapidly emerging as one of India’s fastest-growing EPC/BoP companies in the renewable sector. The company’s operations are bolstered by a robust Operation & Maintenance (O&M) portfolio of more than 525MW, aiming to expand this to 1.2GW in the next three years. This O&M portfolio, which delivers consistent, recurring revenue, has proven instrumental in elevating the company’s profit margins. KP Energy is also developing its Independent Power Producer (IPP) portfolio, which now stands at 19.9MW, with another 30MW wind IPP project under development. With plans to add 50MW next year, the company is on track to build a 100MW IPP portfolio, offering long-term financial stability and cash flow through a 25-year annuity model. Solving Key Challenges in Wind Energy So, what makes KP Energy unique? The company stands out as one of the few players providing comprehensive EPC services in the wind energy sector, a space dominated by solar EPC providers. KP Energy specializes in addressing the challenges faced by Wind Turbine Generator (WTG) manufacturers, IPPs, and Captive Power Producers (CPPs), offering seamless, end-to-end solutions for utility-scale wind farms, even in the most difficult terrains. Key challenges such as land acquisition, power evacuation, and building substations are resolved with KP Energy’s expertise, ensuring smooth project realization from inception to completion. KP Energy’s Key Segments KP Energy operates across three key business segments: EPCC (Engineering, Procurement, Construction, and Commissioning) – BoP solutions that generate project-based revenues. O&M (Operations & Maintenance) – Growth driven by EPCC, providing annuity-based, recurring revenues. IPP (Independent Power Producer) – Asset-heavy but generating strong cash flows with an Internal Rate of Return (IRR) of 14-18%, offering annuity-based revenues. Scope of EPCC Services KP Energy’s EPCC services cover the entire wind power project lifecycle: Site Identification: Identifying suitable locations for wind power projects, a critical step in the development process. Site Logistics: Navigating the complex terrain of wind power sites to ensure smooth construction. Construction and Erection: The company constructs windmills with peak blade heights of 160 meters and is poised to surpass 200 meters with new 4.1MW blades. Power Evacuation, Permits, and Approvals: Navigating the complex regulatory and bureaucratic processes to ensure smooth project execution. Power Purchase Agreements (PPAs): Securing PPAs is the cornerstone of IPP projects, ensuring long-term revenue. Key Commercials EPCC: 2.5-3cr/MW in revenue. O&M: ₹5 lakh per MW annually. IPP: A 1MW project generates 1000 units/hour with a 30-33% Plant Load Factor (PLF), providing 14-18% IRR. Why Now? KP Energy’s future looks bright, bolstered by strong governmental support through: Generation-based incentives (GBIs) Accelerated depreciation benefits Renewable Purchase Obligations (RPOs) Offshore wind energy policies, which offer massive opportunities despite higher capex. Key Risks Like any business, KP Energy faces challenges: Regulatory risks and framework uncertainties. Growth is dependent on industry-wide capital expenditure by IPP and CPP players. Project risks, such as delays in land acquisition and power evacuation, pose potential obstacles. Earnings, Valuation, and Future Outlook With the projects in hand, KP Energy is well-positioned to report a PAT of over ₹100 crore in FY25 and ₹200 crore in FY26, potentially valuing the company at 14-15x FY26E PE. With a projected earnings growth of 75%+ CAGR over the next three years, robust cash flow growth, and 40%+ RoE and RoCE, KP Energy stands at the cusp of significant earnings and PE re-rating. In a fast-evolving renewable energy landscape, KP Energy is poised to lead the way, building windmills to harness the winds of change and driving India’s green energy future.

Triton Valves, a 49-year-old company based in Mysore with headquarters in Bangalore, is India’s leading tyre valve manufacturer, commanding over 70% market share in the domestic sector. Triton supplies to virtually every major player in the automotive sector, including PV, CV, 2W, EV, construction equipment, tractor, tyre, and wheel companies. The company operates three globally benchmarked manufacturing facilities, and its product innovations have set it apart in a competitive industry. Some of Triton Valves’ major achievements include: First Indian Company to Manufacture Tubeless and TPMS Valves: Triton leads the market in tyre technology, providing tubeless tyre valves and TPMS (Tyre Pressure Monitoring Systems), a key safety feature in modern vehicles. First Indian Supplier of Service Valves to the Air-Conditioning Industry: Triton was a pioneer in the AC sector with its valve offerings. E-commerce Leader: It was the first in the industry to utilize e-commerce for aftermarket distribution. Patented Pressure Relief Valves for EV Battery Packs: As EVs gain traction globally, Triton has positioned itself with unique offerings in this growing segment. Despite these impressive milestones, Triton has flown under the radar for years. Its financial performance has been lackluster, with a revenue CAGR of 8% over the past decade and earnings CAGR of just 9%. The return ratios have also been unimpressive, with a 7% Return on Equity (RoE) and 10% Return on Capital Employed (RoCE). Even though revenue has doubled over the past five years, cumulative profit after tax (PAT) has remained a modest ₹6 crore. However, recent developments suggest a significant turnaround in the company’s trajectory. So Why Are We Talking About Triton Valves Now? Triton Valves is setting its sights on a golden future. After speaking to the company’s management, several exciting insights came to light about its plans and potential across key segments: 1. Traditional Tyre Business Market Share Dominance: Triton holds a 60% share in tube valves and 80%+ in tubeless valves in India. Higher Margins in TPMS: TPMS valves, which contain sensors to monitor tyre pressure, offer significantly higher margins than tubeless valves. In fact, TPMS valves are priced twice as high as tubeless valves. Future Growth in TPMS: While TPMS valves currently account for just 10% of the market, Triton estimates that this share will rise to 40-50% over the next five years. Margin Improvement: The company expects to see a 3-4% improvement in standalone margins as TPMS gains market penetration. 2. Futuretech Segment (Brass Mill) Captive Use and External Sales: Presently, 60% of Futuretech’s output is used for internal purposes, but this will shift to 60% external sales in the future. High Asset Turn: A relatively small investment of ₹7 crore will generate gross block of ₹35 crore, expected to contribute an incremental revenue of ₹350 crore by FY26. Special Alloys and Margin Expansion: The company plans to focus on special alloys with higher margins, aiming to increase Futuretech’s current margin from 4.5% to 7%. Applications in EV, Solar, and HVAC: Triton is targeting industries with high demand for copper alloys, such as solar energy, electric vehicles, and cooling systems. 3. Climatech Segment Seasonal Demand: Climatech, Triton’s air-conditioning valve business, operates primarily from October to May, but provides a natural hedge due to its use of brass from the company’s own Futuretech division. Triton’s Market Position: With Indian demand for AC valves expected to grow to ₹750-800 crore by FY29, Triton aims to capture a 50% market share. Diversification from China: Triton is positioned as the supplier of choice for companies looking to diversify their supply chains away from China. 4. Other Growth Segments Aerospace and Defense: Triton is in discussions with the aerospace and defense industries to localize production of certain products, aiming to generate ₹10-15 crore from this segment in the next five years. Component Business: The company’s component business is targeting double-digit EBITDA margins, further boosting profitability. Our View: Triton’s Golden Future Triton Valves is confident in its ability to grow at a conservative rate of 20%+ over the coming years. The company’s new segments, especially Futuretech, are expected to dramatically improve return ratios with asset turnover as high as 15-20x and margins in the 2.5-3% range. In the export market, Triton has a major opportunity in the HVAC segment, where it is poised to compete with China once it reaches sufficient scale by FY26. After a substantial leap in profitability this year, we believe that Triton’s earnings will grow at a CAGR of 30-35% over the next three years, with RoEs and RoCEs climbing to the high teens. This transformation will undoubtedly re-rate the company’s valuation multiples, making Triton Valves a strong contender for long-term success. Triton Valves is no longer a forgotten player—it’s on track to becoming a gold standard in valve manufacturing across various industries.