📆 CMP ₹485 | Market Cap ₹568 Cr | P/E 55x | ROE 25.7% | Order Book ₹500 Cr+
✍️ Written by Prashant | 📅 July 5, 2025
1. At a Glance (Excerpt)
GP Eco Solutions India Ltd – a solar distribution play with a spicy EPC twist – has dazzled the SME street with its ₹50–65 Cr order wins, 78% sales growth, and 5GW BESS expansion ambition. But with 25%+ ROE and zero dividends, the ₹485 stock is also priced at 9.7x book and a P/E of 55x. Solar sunshine? Or SME sizzle?
2. ⚡ Intro – From Panels to Power Plays
GP Eco is what happens when a distributor becomes an EPC aspirant. Starting out as a plain-vanilla solar inverter and panel distributor (LONGi, Saatvik, Sungrow), the company now:
- Bags ₹50–65 Cr EPC orders under PM-KUSUM
- Plans 1.2 GW solar module capacity
- Expanding into Battery Energy Storage Systems (BESS) via 51% subsidiaries
- And just did a preferential issue + capital increase
It’s growing fast — but is that growth baked into the current valuation?
3. 🌞 Business Model – They Sell Solar, Not Sunlight
🔌 Core Business (80%+):
- Authorised distributor for Sungrow (solar inverters)
- Partners with LONGi and Saatvik for solar panels
- High-volume, low-margin distribution model
🧰 New Growth Areas (20% and rising):
- EPC contracts for solar installations
- Turnkey solar power projects
- 51% subsidiaries for BESS & module manufacturing
🛠️ EPC is a recent addition, but ₹100+ Cr order wins show they’re serious about execution.
4. 📊 Financials – Solar-Powered Growth
| FY | Revenue ₹ Cr | Net Profit ₹ Cr | OPM % | ROE % | EPS ₹ |
|---|---|---|---|---|---|
| FY21 | ₹46 | ₹1 | 4% | – | ₹48.5 (pre-bonus) |
| FY23 | ₹101 | ₹4 | 4% | 18.5% | ₹185.0 (pre-split) |
| FY24 | ₹136 | ₹7 | 9% | 26% | ₹8.33 |
| FY25 | ₹240 | ₹10 | 6% | 25.7% | ₹8.75 |
🔥 3-Year Sales CAGR: 42%
🔥 3-Year Profit CAGR: 55%
📉 Margins shrinking to 5–6% due to mix shift
📦 Working capital improved (62 → 48.8 days)
5. 💸 Valuation – Too Hot to Handle?
- P/E: 55.4x — SME bubble territory
- P/B: 9.7x – very expensive
- ROE: 25.7% – justifies high multiple, to an extent
- Cash Flow FY25: +₹27 Cr from ops – strong turnaround
- Fair Value Calculation:
- Base Case: PAT ₹10 Cr × 25x = ₹250 Cr → ₹213/share
- Optimistic: ₹15 Cr PAT FY26 × 30x = ₹450 Cr → ₹383/share
📉 EduInvesting FV Range: ₹210–₹385
⚠️ CMP ₹485 = beyond upper range
6. 📰 What’s Cooking – BESS, Big Plans & Braithwaite
- 🔋 Acquired 51% in AN3 Techno Power to enter BESS
- 🧱 Set up 5 new subsidiaries (GPES Solar 2 to 8 Pvt Ltd)
- 📈 Order Book: ₹500 Cr+
- 🛠️ EPC contracts worth ₹65.5 Cr (PM-KUSUM, Braithwaite, Paradip Port)
- 🧑⚖️ EGM approved capital hike to ₹25 Cr + ₹1000 Cr limit for investments
GP Eco’s KUSUM & BESS strategy is bold, but margins are tighter in execution.
7. 🧾 Balance Sheet – Light But Levered
| FY | Equity ₹ Cr | Reserves ₹ Cr | Debt ₹ Cr | Total Liabilities ₹ Cr |
|---|---|---|---|---|
| FY21 | ₹0.20 | ₹2 | ₹4 | ₹14 |
| FY24 | ₹8 | ₹13 | ₹14 | ₹58 |
| FY25 | ₹12 | ₹47 | ₹32 | ₹153 |
📈 Equity + reserves jumped 3x in FY25
🔋 Debt jumped to ₹32 Cr — possibly funding EPC capex or inventory
✅ Total Assets up to ₹153 Cr – rapid scaling
8. 💵 Cash Flow – Finally Some Sunshine
| Year | CFO ₹ Cr | FCF ₹ Cr |
|---|---|---|
| FY23 | -₹6 Cr | ❌ |
| FY24 | -₹6 Cr | ❌ |
| FY25 | +₹27 Cr | ✅ |
📊 Profit is finally converting to cash
⏳ No major capex yet – that’ll change if BESS kicks in
9. 📐 Ratios – Healthy, But Margins Thin
- ROCE: 24.9% – strong
- ROE: 25.7% – impressive
- OPM: Falling from 9% → 5%
- Debtor Days: Worsened from 74 → 103
- Working Capital Days: Improved to 48.8
📉 Needs tighter receivables control as EPC scales
10. 📈 P&L Breakdown – Revenue > Margin Play
FY25:
- Sales: ₹240 Cr
- PAT: ₹10.25 Cr
- OPM: 6%
- EPS: ₹8.75
- Zero dividends – classic reinvest-for-growth SME
🧪 Higher topline, lower margin model = valuation fatigue risk
11. 🆚 Peer Comparison – Small Solar Among Giants
| Company | CMP ₹ | Sales ₹ Cr | ROE % | P/E |
|---|---|---|---|---|
| GP Eco | ₹485 | ₹240 | 25.7 | 55.4 |
| Waaree Renewables | ₹995 | ₹1597 | 65 | 44.5 |
| Shilchar Tech | ₹5594 | ₹623 | 53 | 43.6 |
| Apar Inds | ₹8625 | ₹18581 | 20 | 42.2 |
📌 GP Eco is well below peer size, but above average valuation
📌 Needs >₹15 Cr PAT to justify >₹500 Cr market cap
12. 👥 Shareholding – Slight Slip, But Okay
- 👨🔧 Promoters: 61.68% (down from 62.2%)
- 🌍 FIIs: 0.6%
- 🏢 DIIs: 0.25%
- 🧑🤝🧑 Public: 37.5% – rising
📉 Minor promoter dilution + preference issue
⚠️ Watch for future dilution if expansion ramps up
13. 🧑⚖️ EduInvesting Verdict™
GP Eco Solutions is no longer a sleepy solar distributor — it’s playing the EPC + BESS + Storage Game.
And the market’s cheering it. But valuations?
Pricing in 2 years of future success already.
☀️ Positives:
- Fast growth, high ROE, ₹500 Cr+ order book
- Entry into BESS + EPC + solar module expansion
- Profitability backed by real cash flows
🌩️ Risks:
- Valuation froth
- Thin margins
- Debt-funded expansion
- Receivable cycles worsening
🎯 EduInvesting FV Range: ₹210–₹385
🚨 CMP ₹485 = Fully Valued (and then some)
🔔 If new BESS contracts hit the tape — revisit.
Tags: GP Eco Solutions, Solar EPC, BESS India, SME IPO, Renewable Energy, EduInvesting Analysis, Green Energy Stocks, Sungrow Distributor, Saatvik Panels, PM-KUSUM Scheme
