Solex Energy Ltd Q4 FY2026 Concall Summary

Key Takeaways

• Revenue surged, driven by execution: FY26 revenue grew 144% YoY, with Q4 up 247.6% YoY, reflecting improved execution and demand traction across modules and EPC.
• Profitability expanded alongside scale: PAT surged 132.7% YoY for FY26, with Q4 PAT margin expanding 71 bps to 6.6%; return ratios are strong at 38.4% ROE and 31.7% ROCE.
• A ₹4,000 crore backward integration bet: An MoU with the Gujarat government targets 5 GW of solar cell and 10 GW of BESS manufacturing, marking a transition to an integrated clean energy enterprise.
• Order book provides near-term visibility: A ₹3,400 crore order book and a recent ₹271.6 crore IPP module supply win underpin the ₹2,600 crore FY27 revenue target, which management calls conservative.
• What to watch next quarter: Progress on land acquisition and the NCD/CCD fundraise for the cell facility, both targeted for closure by end-June, and any clarity on ALCM enforcement timelines.

Financial Performance

• Top-line acceleration: FY26 revenue growth of 144% YoY was driven by the ability to scale operations while maintaining quality; Q4 growth of 247.6% YoY reflected improved execution and demand traction.
• Profitability gains: EBITDA grew 134.6% YoY for FY26, with margins at 11.5% for the full year and 11.1% in Q4; PAT margin expanded 71 bps in Q4 to 6.6%.
• Balance sheet strengthened: Net debt-to-equity stood at 0.57:1, with ROE of 38.4% and ROCE of 31.7% as of March 31, 2026, aided by improved asset utilization and profitability.
• Working capital tightened: The working capital cycle improved to approximately 35 days in FY26 from 61 days in FY25, driven by optimization and closer creditor management.
• Seasonality shapes the P&L: Q4 performance was boosted by year-end completion and monsoon patterns; the solar industry typically sees lower Q1/Q2 and higher Q3/Q4, a trend expected to continue.

The Backward Integration Pivot

• MoU with Gujarat government: A ₹4,000 crore commitment covers 5 GW of solar cell manufacturing (TOPCon + IBC) in two phases of 2 GW and 3 GW, plus 10 GW of BESS in two phases of 5 GW each; the company is acquiring freehold land and will apply for subsidies under the electronics policy scheme.
• Cell manufacturing timeline: The first phase of 2.2 GW is targeted to be operational by the last quarter of 2027, though management flagged volatility in technology and equipment availability as risks to that timeline.
• Technology partnership de-risks execution: Solex has tied up with a professional TOPCon cell manufacturer with approximately 100 GW of individual scale; the arrangement is KPI-based, covering manufacturing, process control, wastage minimization and efficiency maximization.
• Cell line economics: Management targets EBITDA of more than 20% for the cell line by FY29, based on reduced cell prices at current rates and current manufacturing cost estimates; FY28 EBITDA is expected to be in line with existing levels as the cell line ramps up without a full year of efficiency.
• BESS subsidiary planned: A separate subsidiary will house the Battery Energy Storage Systems business; India has clear visibility for 50 GW to be completed in the coming 24 months, and BESS will have independent numbers once a final plan is released.
• Land and funding milestones near: Land acquisition is in an advanced stage, awaiting power connectivity approvals, with closure expected before June 30; a term sheet for ₹200 crore NCD and ₹150 crore CCD has been received, with due diligence underway and closure targeted for June 15-30.

Chetan Shah: "This is a very robust arrangement that we are having, it's all KPI-based arrangement that we have. So we have also secured the risk of the complexity of the technology in terms of manufacturing those solar cells."

Order Book & Revenue Visibility

• ₹3,400 crore order book: New orders continue to flow in while existing ones are executed, providing a base for the FY27 revenue target.
• IPP module supply win: A work order from a leading Independent Power Producer covers supply of N-type TOPCon 615Wp to 620Wp glass-to-glass G12R solar PV modules, with a total contract value of ₹271.6 crore and completion expected by end of May 2026.
• EPC contribution modest at holdco: Major EPC business sits in a subsidiary; the holding company recorded only ₹10-15 crore from maintenance business, with total EPC revenue at ₹125 crore and next year's expectation in the ₹125-150 crore range.
• KP Group orders still pending: Management is working closely with KP Group but said it is too early to comment on numbers; announcements will come when closure happens.

Vipul Shah: "This is a very conservative number. It is better to give a conservative estimate and then outperform it."

Module Operations & Utilization

• Utilization split by technology: Mono PERC (700 MW) utilization was 35%, while TOPCon (remaining capacity) averaged 62%; lines 3 and 4 ramped up from 40% to 81% by March.
• Module pricing trending up: INR prices are rising due to a stronger dollar (now 96+) and raw material costs; modules are currently sold at ₹13.50-₹14 per watt peak non-DCR, with potential to reach ₹16.
• Supply chain secured near-term: H1 and Q4 FY26 were secured with inventory; Q1 FY27 is secured, and the company is working to secure Q2, which is the monsoon season, with controlled vendor pricing; H2 visibility is clear barring uncontrollable situations.
• Raw material cost pressures: Inflation is mainly driven by geopolitical conditions affecting logistics and crude-oil-dependent materials like EVA; the company has vendor price-lock arrangements on certain raw materials and dollar-linked orders provide immunity from INR-dollar imbalance.

Chetan Shah: "There are certain orders which are already linked to the dollar, so we have immunity from the dollar-INR imbalance. And there are certain raw materials where we have arrangements with our vendors for a price lock. But the current situation is so uncertain, so we are in constant touch with our clients regarding any uncontrollable price increase."

Policy & Industry Dynamics

• ALCM enforcement preparedness: Solex is ready for both scenarios: ALMM-compliant orders can use imported cells if allowed, and the company has arrangements with existing domestic cell manufacturers for ALCM-compliant modules if enforcement proceeds.
• Industry pushing for extension: A group of module manufacturers has represented to the Government of India through various channels seeking an extension of ALCM imposition; management is hopeful the government will take an appropriate call.
• Silver replacement still unproven: No proven replacement for silver exists currently; the industry is testing copper as a substitute, but it must pass rigorous 30-year product performance warranty tests, and those tests are ongoing.
• Geopolitical caution tempers outlook: Management declined to quantify module price increases, citing extreme uncertainty, and emphasized a cautious stance given volatile geopolitical conditions.

Chetan Shah: "We are prepared for both the situations. Our group of module manufacturers have already represented to the Government of India through the various channels for the extension of imposition of ALCM."

Guidance & Commitments

Key Metrics