Karamtara Engineering IPO

More About Karamtara Engineering Limited

Karamtara Engineering Limited is a backward-integrated manufacturer specializing in products for the renewable energy and transmission line sectors. As of Fiscal 2024, the company is the largest manufacturer of solar mounting structures and tracker components in India based on installed capacity (Source: F&S Report).

Manufacturing Capabilities

• Installed Capacity:

• Aggregate installed capacity: 567,000 MTPA (including 374,700 MTPA for solar products, equivalent to approximately 13.20 GW).

• Overhead transmission line (OHTL) hardware fittings and accessories: 480,000 pieces (excluding galvanizing capacity).

Market Presence and Global Footprint

• Among the largest exporters of solar products from India to North America in Fiscal 2024

• Expanding into wind energy by setting up a manufacturing facility for tubular towers, expected to commence operations in Fiscal 2026.

• Strong global delivery model, exporting to over 50 countries across North America, Europe, Asia, Africa, Australia, and Latin America.

• Serves six of the top 15 EPC companies in the United States (in terms of installed capacity).

Revenue Growth:

• Export revenue grew at a CAGR of 35.10% from ₹7,647.96 million (Fiscal 2022) to ₹13,958.32 million (Fiscal 2024).

• Exports contributed 61.44% and 57.56% of total revenue in Fiscal 2022 and 2024, respectively.

Recognized as a Four Star Export House by the Directorate General of Foreign Trade, Government of India.

Diverse Product Offerings

• Solar Energy Sector:

• Solar module mounting structures (Solar MMS).

• Solar tracker piles and piers.

• Solar torque tubes.

• Transmission Sector:

• Lattice towers for transmission lines.

• Additional Products:

• Fasteners (bolts, nuts, studs, washers).

• OHTL hardware fittings and accessories (insulator string fittings, jumper tubes, suspension clamps, vibration dampers).

Manufacturing Facilities

• Operates eight manufacturing facilities:

• Seven in Maharashtra, India.

• One in Italy.

• Largest in-house galvanizing facility in the solar sector in India, with a capacity of 258,000 MTPA.

• Two in-house rolling mill furnaces for manufacturing structural steel components.

Customer Base and Market Strategy

• Supplies to OEMs, EPCs, and IPPs.

• Approved supplier and critical partner for leading solar energy companies worldwide.

• Long-Term Customer Relationships:

• Top ten solar energy customers have been associated for an average of three years.

• Top ten transmission customers have an average association of more than four years.

• Repeat business from major domestic and international customers

• Average revenue per solar energy customer grew at a CAGR of 12.52% between Fiscal 2022 and 2024.

Commitment to Sustainability and Innovation

• Emphasizes energy-efficient manufacturing and technology innovations.

• Implements stringent procedures for data collection and carbon footprint reduction.

Industry Outlook

Renewable Energy: A Global Shift

The energy sector is undergoing a profound transformation, driven by environmental concerns, economic shifts, and rapid technological advancements. Renewable energy is at the forefront of this change, with global capacity growing at a CAGR of 10.4% (2018-2023). This growth is set to accelerate further, reaching an estimated CAGR of 13.6% (2023-2028), fueled by rising clean energy demand, government support, and innovations in green technology.

India’s Transition to Renewable Energy

India is making significant strides toward a cleaner energy future, shifting from coal to renewables. Key projections include:

• Total power generation capacity: 751 GW by Fiscal 2030 (estimated)

• Renewable energy target: 500 GW by 2030, with 280 GW from solar power

Harnessing India’s Solar Potential

• Receives approximately 5,000 trillion kWh of solar energy annually

• Solar radiation: 4-7 kWh per square meter per day

• Initiatives include:

• Subsidies for rooftop solar installations

• Competitive bidding for large-scale solar projects

Commitment to Sustainability

India’s focus on solar and wind energy aligns with its net-zero goals, reinforcing its commitment to reducing carbon emissions and combating climate change.

How Will Karamtara Engineering Limited Benefit

• Increased Demand for Solar Products: With India targeting 500 GW of renewable energy by 2030, including 280 GW from solar, Karamtara Engineering Limited stands to benefit from rising demand for solar mounting structures, tracker components, and other solar-related products, reinforcing its market leadership.

• Expansion into Wind Energy: Karamtara’s upcoming tubular tower manufacturing facility (Fiscal 2026) aligns with India’s shift to wind and solar power, expanding its footprint in renewable infrastructure and tapping into new opportunities in the growing wind energy sector.

• Export Market Growth: With a 35.10% CAGR in export revenue (Fiscal 2022-2024) and a strong presence in North America, Europe, and Asia, Karamtara is positioned to benefit from increasing global demand for solar and transmission products.

• Advanced Manufacturing Capabilities: Operating eight manufacturing facilities, including India’s largest in-house galvanizing plant, gives Karamtara a competitive edge in producing high-quality solar and transmission components while ensuring cost efficiency.

• Strategic Partnerships and Repeat Business: With long-term associations with leading solar and transmission companies, Karamtara ensures consistent revenue streams, trusted supplier status, and repeat business, enhancing market stability and growth potential in renewable energy.

Peer Group Comparison

Name of Company	Face Value (₹ Per Share)	Revenue (₹ Million)	EPS (₹) – Basic	NAV (₹)	P/E Ratio	RONW (%)
Karamtara Engineering	10	24,251.50	3.64	19.60	TBD	20.47%
Listed Peers
Inox Wind Limited	10	17,432.35	(1.56)	50.61	N.A	N.A
KP Green Engineering Limited	5	3,490.49	9.70	2,381.68	50.41	23.64%
Premier Energies Limited	1	31,437.93	6.93	14.63	213.61	46.29%
Waaree Energies Limited	10	1,13,976.09	48.05	154.95	55.36	43.20%
Suzlon Energy Ltd	2	64,968.40	0.50	(1.95)	113.76	N.A

Key Insights

• Revenue: Waaree Energies leads in revenue with ₹1,13,976.09 million, reflecting strong demand. Suzlon follows with ₹64,968.40 million, showing stability. Premier Energies generates ₹31,437.93 million, while Karamtara Engineering records ₹24,251.50 million. Inox Wind reports ₹17,432.35 million, and KP Green achieves ₹3,490.49 million.

• Earnings Per Share (EPS): Waaree Energies has the highest EPS at 48.05, indicating strong profitability per share. KP Green and Premier Energies follow with 9.70 and 6.93, respectively. Karamtara Engineering records 3.64, suggesting steady earnings. Suzlon and Inox Wind have weak EPS, with 0.50 and negative -1.56, respectively.

• Net Asset Value (NAV): KP Green reports the highest NAV at ₹2,381.68, indicating strong asset backing. Waaree Energies follows at ₹154.95, reflecting robust financial health. Inox Wind and Karamtara Engineering have ₹50.61 and ₹19.60, respectively. Premier Energies posts ₹14.63, while Suzlon has a negative NAV of -1.95.

• Price-to-Earnings (P/E) Ratio: Waaree Energies has a high P/E of 55.36, indicating strong market confidence. Premier Energies follows with 213.61, suggesting high valuation. KP Green records 50.41, reflecting optimism. Karamtara’s P/E is yet to be determined. Inox Wind and Suzlon lack a meaningful P/E due to negative or low earnings.

• Return on Net Worth (RONW): Premier Energies leads with a high RONW of 46.29%, reflecting strong profitability. Waaree Energies follows with 43.20%, while KP Green records 23.64%. Karamtara Engineering shows a moderate 20.47%. Inox Wind and Suzlon lack RONW data, indicating weaker financial returns.

Karamtara Engineering Limited IPO Strengths

• Leading Solar Component Manufacturer

Karamtara Engineering Limited is India’s largest integrated manufacturer of solar mounting structures and tracker components by installed capacity in Fiscal 2024 (Source: F&S Report). With strong backward integration, in-house galvanizing, and diverse product offerings, the company ensures quality, cost efficiency, and faster delivery, dominating the renewable energy sector.

• A One-Stop Shop for Solar and Transmission Structures

Karamtara Engineering Limited is a leading manufacturer of solar and transmission structures, offering a diverse product portfolio, including fixed-tilt structures, tracker components, lattice towers, fasteners, and OHTL hardware fittings. With advanced manufacturing facilities and cross-selling advantages, the company ensures enhanced customer experience, revenue growth, and market competitiveness.

• Strong Global Presence with Expanding Export Network

Karamtara Engineering Limited has established a robust international footprint, exporting to over 50 countries across six continents. With advanced manufacturing, efficient logistics, and stringent quality control, the company ensures timely deliveries and high product standards. Recognized as a “Four Star Export House,” it continues to strengthen its global market share.

• Strong Customer Relationships and High Retention Rate

Karamtara Engineering Limited has built lasting relationships with global OEMs, EPCs, and IPPs, expanding its solar energy customer base from 24 in Fiscal 2022 to 51 by September 2024. With a 77.34% revenue retention rate, cross-selling strategies, and strict quality assurance, the company continues to drive strong repeat business and revenue growth.

• Strategic Network of Manufacturing Facilities with Advanced Capabilities

The company operates eight manufacturing facilities, including seven in India and one in Italy, with a total installed capacity of 567,000 MTPA. Equipped with automation, robotics, and IoT, these facilities ensure efficiency. Stringent quality controls, advanced software, and strategic locations enhance operations, exports, and sustainability efforts.

• Experienced Promoter Directors Supported by a Skilled Management Team

The company is led by Promoter Directors Tanveer Singh and Rajiv Singh, each with 28 years of experience. Supported by CEO Sunil Kumar Rustagi and Whole-time Director Shreyans Jitendra Shah, the management team ensures strategic growth, market adaptability, and strong business execution.

• Consistent Track Record of Financial Performance and Strong Financial Position

With sustained revenue and profitability growth, the company has expanded significantly, especially in green energy. Between Fiscal 2022 and 2024, revenue and EBITDA grew at a 39.58% and 42.32% CAGR, respectively. Strong financial stability supports production expansion, product diversification, and enhanced customer trust.

Key Strategies for Karamtara Engineering Limited

Expansion of Installed Capacity in India

The company plans to expand its production capabilities to meet rising customer demand. By increasing capacity, it aims to serve a larger customer base while minimizing risks related to limited production. These expansions are expected to enhance operational efficiency, optimize costs, and improve economies of scale.

Strengthening Backward Integration for Cost and Operational Efficiency

The organization intends to establish an integrated steel manufacturing facility for captive consumption. This initiative will enhance margins, ensure ESG and CBAM compliance, and improve raw material quality control. It seeks to reduce reliance on external suppliers, optimize costs, and strengthen customer confidence in its operations.

Expanding Market Position in Renewable Energy

The company aims to develop and launch new products in the renewable energy sector. Plans include manufacturing tubular towers for wind turbines and solar stamping parts. By broadening its product portfolio, it expects to increase revenue, enhance customer satisfaction, and establish a competitive edge in the market.

Increasing International Customer Base

Efforts are underway to expand international sales through increased production capacity, a new Saudi Arabian facility, and a diversified product portfolio. By conducting market research, tailoring export-specific products, and strengthening global branding, the company aims to establish new relationships and enhance its presence in high-growth markets.

Enhancing Operational Efficiency and Cost Reduction

The company is focused on optimizing design, manufacturing, and supply chain processes to control costs. By leveraging its scale, supplier relationships, and backward integration, it plans to improve procurement strategies and price stability while ensuring operational efficiency and long-term financial sustainability.