# 1. Financial Performance ## A. Key Figures * **Revenue:** ₹6,227 Cr Q2 FY'26 (+70% YoY) · ₹10,823 Cr H1 FY'26 (+53%) * **EBITDA:** ₹1,567 Cr Q2 (+155% YoY) · ₹2,736 Cr H1 (+118%) * **PAT:** ₹878 Cr Q2 (+134% YoY) · ₹1,651 Cr H1 * EBITDA Margin: 17% Q2 · ~25% H1 (vs. 17.5% prior year) * ROCE / ROE: 41.8% and 34.8% respectively * **Other Income:** ₹523 Cr from Indosolar OFS divestment ## B. Revenue Growth * **Record Top-Line Momentum:** Revenue surged with **strong double-digit growth** in Q2 and H1, driven by robust demand and scaling of operations. * **Export-Linked Volatility:** Q4 revenue visibility remains limited due to customer readiness and shipment timing, introducing near-term uncertainty. * **Cost Pass-Through:** Higher other expenses from exports were offset by proportional revenue, with duty burden as a percentage of sales stable. ## C. Profitability Trends * **Sustained Margin Expansion:** EBITDA margin improved significantly year-on-year despite temporary pressure from **9% other expenses**, driven by freight and export duties. * **IRA Benefits Embedded:** **INR 160 Cr** in IRA benefits are considered recurring, tied to US production ramp-up, and expected to support profitability through 2030. ## D. Margin Expansion * **Gross Margin Discipline:** Margins improved sequentially due to proactive input cost management and back-to-back sourcing aligned with market pricing. * **SG&A Normalization Expected:** Elevated SG&A from export phasing is temporary; outlook remains positive as costs are expected to revert to **5–6% range**. ## E. Balance Sheet Strength * **Self-Funded Capex Trajectory:** Capex fully covered by **strong cash balance and earnings visibility**, with financial closures secured but no drawdowns yet. * **Working Capital Timing Impact:** **Goods in transit ballooned to ~₹1,300 Cr** (vs. normal ₹300–400 Cr) due to export phasing, temporarily inflating inventory. * **Advance Payments Signal Demand:** **₹3,200 Cr in advances** on books, with upside expected post-tariff resolution and retail order growth via advance-and-fulfil model. * **Corrected Cash Flow Classification:** **₹532 Cr** from Indosolar OFS reclassified to investing inflow, improving reporting accuracy without affecting net cash flow. --- # 2. Order Book & Demand ## A. Key Figures * **Order Book:** **~₹47,000 Cr** (~24 GW) * **Pipeline:** **>100 GW** potential demand * **PPAs Signed:** **413 MW** secured * **Connectivity Secured:** **~1 GW** * Quarterly Production: 2.64 GW record output * **Domestic Demand Outlook:** **40–45 GW/year** near-term · **50–60 GW+** by 2030 * **US Solar Target:** **~500 GW** by 2030 * **US Data Center Demand:** **33 GW → 176 GW** by 2035 ## B. Order Book & Market Demand * **Robust Backlog & Visibility:** Strong order book of ~24 GW provides multi-year revenue visibility, supported by a >100 GW pipeline signaling sustained long-term demand. * **Domestic Tailwinds:** Aggressive state-level solar push in **Uttar Pradesh and Maharashtra** under PM Surya Ghar and PM Kusum Yojana is accelerating domestic adoption. * **Policy-Driven Growth:** Increased allocations under national schemes are expected to boost **DCR compliance**, favoring domestic manufacturers like Waaree. * **Global Opportunity Set:** US market remains a key growth vector, with **45x tax credits** ensuring policy continuity and **AI-driven data center boom** creating structural demand for solar as the preferred power source. ## C. Domestic vs Overseas Mix * **Dynamic Revenue Split:** Despite a structural 60% overseas / 40% domestic order book bias, **domestic revenue reached 53% in the quarter**, reflecting timing of project execution and strong local demand. * **Near-Term Mix Shift:** Q2 overseas contribution was **47%**, with Q3 expected similar, though **domestic retail momentum** may increase homegrown share further. * **Strategic Global Expansion:** Actively evaluating entry into **Middle East, Europe, UK, Australia, GCC, and Africa**, guided by India’s FTA landscape and geopolitical trends. ## D. Retail Segment Contribution * **Retail Demand Surge:** PM Surya Ghar demand jumped from **3 GW to 10 GW** year-on-year, with expectations of continued growth; Waaree aims to capture a **significant share**. * **Hidden Retail Revenue Stream:** Retail segment accounts for **~19–20% of domestic orders** but is **not reflected in order book** due to immediate fulfillment post advance payment, understating true demand. * **Affordability Boost:** **GST reduction from 12% to 5%** is lowering system costs, enhancing retail uptake and market expansion. --- # 3. Manufacturing & Capacity ## A. Key Figures * Module Capacity: ~18.7 GW total (~16.1 GW India, 2.6 GW US) * Cell Capacity: 5.4 GW operational, 20–25 GW current, expanding to 35–40 GW by Jun-26 * **BESS Capacity:** Scaling from **5 GWh to 20 GWh**; **INR ~10,000 Cr** planned investment * **Inverter Capacity:** Expanding from **3 GW to 4 GW** * **Electrolyser Capacity:** Scaling to **1 GW** for green hydrogen ## B. Module & Cell Capacity * **Largest Cell Maker in India:** Now operates the **largest cell manufacturing facility in India** with 4 GW fully operational capacity, with further expansion to 35–40 GW by mid-2026 aligned with ALMM policy. * **Strategic US Expansion:** Acquired Meyer Burger’s US module facility and inventory for **INR 8 Cr**, gaining HJT technology and 6 GW of US module capacity, enhancing global footprint. * **Technology Flexibility & Innovation:** Actively producing **HJT modules**, evaluating **XBC and HJT**, and investing in R&D to maintain technological edge and production adaptability. * **Vertical Integration to Boost Margins:** Aims to align cell and module capacities directionally; **in-house cell production** will strengthen supply chain control and **favorably impact margins**. * **Rapid Chikhli Ramp-Up:** Chikhli module facility added **75 GW capacity**, with cell capacity seeing a **significant jump** and utilization expected at **80–85% this quarter**. ## C. Capacity Utilization * **Record Production Levels:** Achieved **highest-ever 6 GW each in module and cell production** in Q2 FY26, with further ramp-up expected in H2. * **Targeted Utilization Rates:** Operates at **80–85% module** and **85–90% cell** utilization as optimal nameplate benchmarks. * **Indosolar Utilization Below Target:** Currently running at **70–75%**, with improvement plans focused on talent development and equipment optimization. * **Noida Power Challenges:** Facing **frequent power outages**, mitigated via government engagement and internal bridge power solutions. ## D. BESS & Inverter Expansion * **Major BESS Investment Push:** Committed **INR ~10,000 Cr** to build a vertically integrated BESS facility with **5 GWh phase one** and full **20 GWh target**, supporting India’s 236 GWh storage vision by 2032. * **Integrated BESS Timeline:** **Pack and cell production** under single roadmap; **commercial operations start FY27**, with both phases live by **FY28**. * **Inverter Scale-Up Underway:** Capacity increasing to **4 GW/year**, with **3 GW** coming online in current fiscal, meeting rising system integration demand. * **Global Manufacturing Strategy:** Expanding US footprint to serve local demand and reduce import reliance, with **ALCM now operational** and **export opportunities under evaluation**. * **Multi-Vertical Capex Deployment:** New manufacturing for **BESS, inverters, and transformers** being commissioned progressively each quarter. --- # 4. Product & Segment Performance ## A. Key Figures * **Battery Storage Growth:** Global capacity to grow **5x by 2030** to **>1,800 GWh** * **BESS Target:** **20 GWh** by FY28 * **Retail Sales Contribution:** **>20%** of revenue (not in order book) * **Stake Acquisitions:** **76%** in Racemosa (smart meters), **64%** in Kotsons (transformers) ## B. DCR vs Non-DCR Margins * **DCR Margin Advantage:** DCR and export segments deliver **~300–350 bps higher margins** than standard domestic products, driven by favorable mix and captive cell capacity ramp-up. * **Strategic Mix Target:** Export exposure maintained at **20–25%** to balance risk and profitability, with recent quarters seeing elevated export contribution. * **Margin Outlook:** Despite slight pricing pressure in India, **overall module margins expected to stabilize**, with DCR segment benefiting from vertical integration. * **Cell Integration Impact:** Management expects **300–400 bps margin uplift** from in-house cell production, rejecting higher external estimates; target composite margins up to **25%** post-integration. ## C. US Module Realizations * **Higher US Realizations:** US-made modules achieve significantly higher realizations due to **cost-plus pricing and duty pass-through**, with **no negative margin impact** from tariffs. * **US Capacity Utilization:** US manufacturing facility is **fully booked**, producing locally with no India-sourced modules, supporting sustained high-value output. ## D. New Verticals Progress * **Strategic Diversification:** Expansion into **smart meters, transformers, and BESS** via acquisitions signals shift toward integrated renewable energy solutions and reduced module dependency. * **IPP & Capex Shift:** Move toward **integrated manufacturing + IPP model** confirmed by **413 MW acquisition from Enel** and PPA signings, indicating a more capital-intensive growth trajectory. * **BESS Technology Evolution:** Battery systems advancing rapidly with **3–4 year tech cycles**, focusing on **energy density improvements** and evolving chemistries, aligning with solar innovation pace. --- # 5. Supply Chain & Localization ## A. Key Figures * **PLI Capacity:** **6 GW** awarded · **10 GW** actual capacity (ingots, wafers, cells) * **Training Initiative:** **3,000+ individuals** in deep tech · **8,200+ students** supported * **Bid Value:** **INR 18 million (~1.8 Cr)** for cell inventories (not HJT line) ## B. China-Free Supply Chain * **Compliant U.S. Supply Chain:** Fully aligned with U.S. regulations, including FEOC requirements, ensuring **China-free or compliant shipments** to the U.S. * **Technology & Talent Development:** Strategic partnership with **IIT Bombay** to build future-ready workforce in **perovskite and advanced solar technologies**, reinforcing long-term innovation capacity. * **Adaptable Energy Storage Infrastructure:** Technology platform designed for **lithium-ion and future sodium-ion systems**, enabling flexible BESS configurations. * **Proactive Capex Funding:** Expansion in BESS, inverter, and electrolyser manufacturing secured through **pre-funded capital allocation**, ensuring execution certainty. ## C. US Tariff Compliance * **Tariff-Optimized Cell Sourcing:** Does **not use Indian-made cells** for U.S. modules due to **higher tariff implications**; instead sources globally to minimize duty costs. * **Flexible Tariff Burden Sharing:** Tariff costs are **negotiated case-by-case with customers**, avoiding fixed liability on either party. ## D. Domestic Backward Integration * **Full-Chain Integration Advantage:** Expanding from modules and cells into **ingots and wafers**, positioning for **95–100% capture** of domestic market opportunities under DCR framework. * **PLI Execution on Track:** All PLI projects progressing toward **2027 completion**, with incentives treated as **incremental upside**, not core financial assumptions. --- # 6. Regulatory & Trade Risks ## A. Regulatory Landscape & Policy Tailwinds * **Ongoing AD/CVD Probe:** Anti-dumping and countervailing duty investigation into cell origins is in early stages; company is cooperating fully, with **internal assessments indicating minimal potential liabilities**. * **ALMM Extension Provides Clarity:** Regulatory support for domestic manufacturing reinforced by ALMM extension — **cells until June 2026**, **ingots/wafers until June 2028** — accelerating India’s end-to-end solar value chain development. * **First-Mover Advantage in Cells:** Company’s **4 GW cell capacity** positions it strongly ahead of June 2026 ALMM deadline, creating a **distinct market advantage** for early commercializers. ## B. Strategic Policy Expansion & Cybersecurity * **BESS Policy Expected to Mirror Solar:** Government likely to introduce **PLI schemes, viability gap funding, and trade barriers** for battery energy storage (BESS) to advance **Atmanirbharta (self-reliance)**. * **Inverter Localization Driven by Security:** ALMM for inverters emphasizes **domestic data control and cybersecurity**, underpinning strategic rationale for local manufacturing. * **Cybersecurity Identified as Key Risk:** Inverters’ role in data and grid control makes them vulnerable; company actively monitoring **cybersecurity, ESG, and regulatory shifts** as critical operational risks. --- # 7. Guidance & Outlook ## A. Key Figures * **EBITDA Guidance:** **₹5,500–6,000 Cr** for FY26 * **Capex Approval:** **₹8,175 Cr** additional · **₹25,000+ Cr** total greenfield over 24 months * **Capex Phasing:** **10–15% in FY26** · **~50% in FY27** · **remainder in FY28** * **Payback Period:** **3–5 years** for capex projects ## B. EBITDA Target * **North Star Commitment:** FY26 EBITDA guidance reaffirmed as the central performance anchor, backed by firm customer commitments and on-track project execution. * **45x Benefits Secured:** Expected financial uplift from strategic initiatives is underpinned by binding customer demand, reinforcing visibility into earnings delivery. ## C. Capex Phasing * **Back-End Loaded Expansion:** Major capex outlay deferred to FY27 and FY28, with minimal spend in current fiscal, supporting near-term cash flow stability. * **Acquisitions Accelerate ROI:** Strategic buys (Kotsons, Racemosa, Meyer Burger) offer faster returns than greenfield due to guaranteed internal offtake and immediate synergies. * **Capex Scope Clarified:** ₹25,000+ Cr plan covers greenfield only; acquisition-related investments are incremental and not included. ## D. Margin Improvement Plan * **H2 Margin Catalysts:** Profitability expected to improve in second half of FY26, driven by cell plant ramp-up, retail expansion, and scaling of US operations. * **Long-Term Financial Horizon:** Full EBITDA benefits from current capex to materialize from FY28 onward, though incremental revenues may emerge earlier. * **PLI as Upside Optionality:** Financial planning excludes PLI benefits; any future disbursements represent incremental margin enhancement, not base-case assumptions.