Check Before You Invest : Karma Energy Ltd

Q: Which industry/sub-sector does Karma Energy Ltd belong to?

Karma Energy Ltd belongs to the Power sector, operating specifically within the Power Generation/Distribution segment.

Q: Is Karma Energy Ltd a good quality company?

Karma Energy Ltd is a quality company, based on a multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Karma Energy Ltd undervalued or overvalued?

Karma Energy Ltd appears Fair, as its key valuation ratios are in line with their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 28.69, Historic Median: 24.17. Price to Book, Current: 1.49, Historic Median: 1.30. Price to Sales, Current: 6.35, Historic Median: 4.29. EV to EBITDA, Current: 40.67, Historic Median: 21.23

Q: Is Karma Energy Ltd a good buy now?

Karma Energy Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Q: Revenue growth of Karma Energy Ltd?

Karma Energy Ltd revenue growth is -29.6% for FY-2025, which is below its 5-year CAGR of -24.68%, indicating slower growth.

Q: Gross Profit margin of Karma Energy Ltd?

Karma Energy Ltd Gross profit margin which is the profit after deduction of direct costs, is 36.8% for FY-2025, which is above its 5-year median of 23.6%, indicating increasing margins.

Q: Operating Profit Margin of Karma Energy Ltd?

Karma Energy Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 7.04% for FY-2025, which is below its 5-year median of 19.2% indicating decreasing margins.

Q: Net Profit Margin of Karma Energy Ltd?

Karma Energy Ltd Net Profit Margin is 17.92% for FY-2025, is above its 5-year median of 1%, indicating increasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 36.8, Historic Median: 23.6. Operating Profit Margin (%), Current: 7.04, Historic Median: 19.2. Net Profit Margin (%), Current: 17.92, Historic Median: 1

Q: Return on Asset of Karma Energy Ltd?

Karma Energy Ltd Return on Asset is 3.06%, which is above its 5-year historical median of 0.24%, indicating improved asset utilization efficiency.

Q: Return on capital employed (ROCE) of Karma Energy Ltd?

Karma Energy Ltd Return on capital employed is 4.31% for FY-2025, which is above its 5-year historical median of 1.6%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Check Before You Invest : Karma Energy Ltd

Snapshot

Q.1 Which industry/sub-sector does Karma Energy Ltd belong to?

Karma Energy Ltd belongs to the Power sector, operating specifically within the Power Generation/Distribution segment.

Q.2 Is Karma Energy Ltd a good quality company?

Karma Energy Ltd is a quality company, based on a multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Karma Energy Ltd undervalued or overvalued?

Karma Energy Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	28.69	24.17
Price to Book	1.49	1.30
Price to Sales	6.35	4.29
EV to EBITDA	40.67	21.23

Q.4 Is Karma Energy Ltd a good buy now?

Karma Energy Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Karma Energy Ltd?

Karma Energy Ltd revenue growth is -29.6% for FY-2025, which is below its 5-year CAGR of -24.68%, indicating slower growth.

Q.2 Gross Profit margin of Karma Energy Ltd?

Karma Energy Ltd Gross profit margin which is the profit after deduction of direct costs, is 36.8% for FY-2025, which is above its 5-year median of 23.6%, indicating increasing margins.

Q.3 Operating Profit Margin of Karma Energy Ltd?

Karma Energy Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 7.04% for FY-2025, which is below its 5-year median of 19.2% indicating decreasing margins.

Q.4 Net Profit Margin of Karma Energy Ltd?

Karma Energy Ltd Net Profit Margin is 17.92% for FY-2025, is above its 5-year median of 1%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	36.8	23.6
Operating Profit Margin (%)	7.04	19.2
Net Profit Margin (%)	17.92	1

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Karma Energy Ltd?

Karma Energy Ltd Return on Asset is 3.06%, which is above its 5-year historical median of 0.24%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Karma Energy Ltd?

Karma Energy Ltd Return on capital employed is 4.31% for FY-2025, which is above its 5-year historical median of 1.6%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Karma Energy Ltd?

Karma Energy Ltd Return on equity is 3.98% for FY-2025, which is above its 5-year historical median of 0.32%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Karma Energy Ltd?

Karma Energy Ltd Cash conversion cycle is 386 days, above its 5-year historical median of 332 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover (x)	0.17	0.22
ROE (%)	3.98	0.32
ROCE (%)	4.31	1.6
Cash Conversion Cycle	386 days	332 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Karma Energy Ltd?

Karma Energy Ltd Debt-to-Equity ratio is 0.03, which is lower the industry average of 0.44, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Karma Energy Ltd?

Karma Energy Ltd Debt to cash flow from operations is 0.63, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Karma Energy Ltd?

Q.1 Promoter shareholding and pledge status of Karma Energy Ltd?

Promoters hold 74.70% of the Karma Energy Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Karma Energy Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Karma Energy Ltd vs industry peers?

Karma Energy Ltd revenue CAGR is -24.68%, compared to the industry median CAGR of 0%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	-29.6	-
Gross Profit Growth (%)	10	-0.1
Operating Profit Growth (%)	-70.5	0.1
Net Profit Growth (%)	1,200	-3

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	0.17	0.12
ROE (%)	3.98	2.44
ROCE (%)	4.31	4.39
Cash Conversion Cycle (days)	385.98	62

Valuation & price assessment

Q.1 Stock return of Karma Energy Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 11.4% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	11.4%	31.8%	14.7%	0.9%

Q.2 Valuation ratios of Karma Energy Ltd vs historical?

The current P/E ratio of 28.69 is higher than its historical median of 24.17, indicating that the stock is trading above its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	28.69	24.17	27.37
Price to Book	1.49	1.30	1.82
Price to Sales	6.35	4.29	6.75
EV to EBITDA	40.67	21.23	13.61

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Check Before You Invest : Karma Energy Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

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