Q1 2027 Solex Energy Ltd Earnings Call
Speaker #1: Ladies and gentlemen, good day. And welcome to Solex Energy Limited, Q1 FY27 post-results earnings conference call hosted by Actfactors PR. As a reminder: all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Speaker #1: Scheduling assistance during this conference call: you may signal the operator by pressing star then 0 on your touchdown phone. Please note that this conference is being recorded.
Speaker #1: And now, in the conference, order Mr. Rishabh Shah from Actfactors PR, thank you, and over to you, Mr. Shah.
Speaker #2: Thank you. A very good morning to everyone, and warm welcome to Q1 FY27 earnings call of Solex Energy Limited. From the senior management, we have with us Dr. Chetan Shah, Chairman and Managing Director, Mr. Vipul Shah, non-executive director, and Mr. Hemal Kachivala, Chief Financial Officer.
Speaker #2: Before we begin the earnings call, I would like to mention that some of the statements made during the call may be forward-looking in nature and hence it may involve risks and uncertainties.
Speaker #2: Including those, related to future financials and operating performance of the company. Please bear with us if there is any call drop during the course of the conference call.
Speaker #2: We would ensure that it is reconnected at the earliest. I now hand over the call to Mr. to Dr. Chetan Shah, Chairman and Managing Director, for his opening remarks.
Speaker #2: Thank you, and over to you, sir.
Speaker #3: thank you very much, and hello to everyone. A very good day to all of you. On behalf of Solex Energy Limited, I welcome all our investors and our leads and stakeholders on this call to discuss our Q1 FY27 results.
Speaker #3: Let me begin with two developments that I am happy to share with you. First, we have completed our listing on BSE Limited, Solex Energy is now listed on both the NSE and the BSE, tiny note, this was a listing of existing shares on the BSE main board, no fresh capital was raised.
Speaker #3: This is a milestone we are proud of. It reflects the confidence that investors and stakeholders have placed in our vision our governance and our long-term growth strategy.
Speaker #3: As of today, Solex Energy is supported by a growing community of over 11,000 shareholders. And with our presence on both exchanges, we look forward to further broadening our investor base improving liquidity and strengthening our shareholder profile.
Speaker #3: Second, the company continues to strengthen its order inflow following a 628 plus crore order received in July 26, in August 26 secured 42.47 crore, new work order from a domestic private limited company in the power sector for the supply of N-type TOPCon 620 watt pig last to class solar PV modules.
Speaker #3: With execution scheduled to commence in October 2026. In addition, the company has received LOI for further 175 crore order with MSA currently at the signing stage.
Speaker #3: Together, these orders represent an executable order pipeline of 845.84 crore targeted for the execution by the December 31, 2026. Before I take you through the quarterly performance, let me place Q1 in the right context because I believe context I believe context is important for how one reads these numbers.
Speaker #3: As we consistently said in our previous interaction, our business is closely linked to utility scale solar project execution in India. And it is inherently edge-to-weighted.
Speaker #3: The first half of the fiscal year is seasonally softer, and the second half is when the bulk of module dispatches EPC completion and the revenue conversion happens due to FY27 has unfolded along that same seasonal shape.
Speaker #3: There are four factors worth highlighting. First, ASTM, which is known as ALLM2, production flow, higher operating expenses, shifting of delivery schedules, consequently customer optic of module slows down in Q1 and Q2.
Speaker #3: And the pipeline flows into H2. This is a structural feature of our industry. Not a one-off. If you look at Solex's own trajectory over the last several years, the pattern of the software H1 and much stronger H2 has been consistent.
Speaker #3: Second, ALLM. As you are aware, up to the middle of May, there was a broad expectation across the industry that the ALLM leads to, that is ALTM, timeline on sales would be extended.
Speaker #3: On 25 May, it was clarified that there would be no extension. In the weeks that followed, a number of upcoming projects were placed on hold, and the market, as a whole, moved into a wait-and-watch mode while developers assessed the implication of their project timelines and their financing.
Speaker #3: This slowed down the press decision-making and led to some customer-driven rescheduling of module deliveries during the quarter. I want to be very clear on two points here: these are the timing tips, and not cancellations.
Speaker #3: And we do not currently see any orders as risk. And whether ALLM is extended at any stage or not, there is no impact on our order book.
Speaker #3: Because we are prepared for both scenarios, for ALTM compliant order we have supply arrangement in place, with domestic cell manufacturers, and for our other orders we are fully secured on the imported cell supply chain.
Speaker #3: Third, the cost base, with softer volume in seasonally weak quarter, our fixed cost and the full quarter impact of depreciation and interest on our 4 gigawatt capacity are absorbed or us smaller revenue base.
Speaker #3: Let me note let me now turn to operations and order visibility. Where I would like to focus most of your attention. Our 4 gigawatt module manufacturing capacity at Sarkeswar, Gujarat, continues to operate as planned.
Speaker #3: The ramp-up of line 3 and line 4, which were commissioned in November 25, and reached full utilization by March 26, is now well behind us.
Speaker #3: For financial year 27, we are working with an average utilization assumption of around 55% across the year. On order book visibility, currently stands at approximately 3,400 crore.
Speaker #3: This is this is spread across the three stages confirmed purchase orders, where deliveries are underway, signed MSAs where formal POs are awaited, and MSAs at the advanced stage of discussion.
Speaker #3: As I mentioned earlier, this visibility is not contingent on an ALLM outcome or that is ALLM2 outcome. Alongside this, we continue to see healthy inquiry pipeline from both existing IPP relationship and a new customer.
Speaker #3: And we keep adding new orders even as we execute the existing work. Our customer profile, which includes several of the largest IPPs in the country, is a source of strength and not a not a concentration risk.
Speaker #3: These are the most quality-conscious buyers in the industry. They conduct their own pre-dispatch inspection and repeat business from their cohort has been the foundation of the Solex order book.
Speaker #3: We remain aligned with the FY27 revenue guidance and packed margin in the range of 5 to 6%. Let me now touch on the strategic priorities that we are executing in parallel with new term delivery.
Speaker #3: Technology and manufacturing differentiation remain at the core of what Solex stands for. And we were the first Indian manufacturer to launch G12 at open module or facilities fully automated and MES driven with complete unit level traceability and our in-house testing laboratory allows us to certify product against the most rigorous international climate conditions.
Speaker #3: Our R&D partnership with the ISC Constan Germany continues to progress on the next generation back contact and TOPCon plus cell roadmap. And our engineering collaboration with the TTVision Malaysia is helping us on automation and process optimization.
Speaker #3: These are what allows us to serve the IPP and CNI segment, and they are the reason our customers come back to us. On cell manufacturing, our roadmap is intact.
Speaker #3: The 2.2 gigawatt N-type TOPCon plus cell line, which is the first phase of our planned 5 gigawatt cell capacity, is on track for commissioning by end of calendar year 2027.
Speaker #3: On land, we are in closing stage of the identified parcel with connectivity approvals expected shortly, on funding the debt component of the approximately 700 crore is at an advanced stage of discussion, with our lender and the equity component of 350 crore structured as a combination of NCDs and CCDs.
Speaker #3: This progressing through the due diligence speech. We are also onboarding an experienced TOPCon cell manufacturer on a KPI link basis, for line design, commissioning, operations, which significantly reduce the ramp-up.
Speaker #3: Phase. I want to be clear on one thing. Cell manufacturing is not an incremental for Solex. It is the platform on which the next phase of our margin trajectory is being built.
Speaker #3: Once operational and stabilized operational and stabilized backward integration into a cell is respected, to support a meaningful uplift in profitability over the current range, investors should see Q1 as the near-term operating cycle and cell manufacturing as the medium-term earning inflection.
Speaker #3: On BESS, that is battery energy storage system, we continue to progress on our evaluation with a technology partners identified for the containerized BESS manufacturing setup.
Speaker #3: As shared previously, BESS will be housed in a separate subsidiary we will come back with more specific specifics as the planned pumps up over the coming quarters.
Speaker #3: All of these things within our long-term visibility vision 2023, under which we entered, we intend to build 10 gigawatt of module capacity 10 gigawatt of solar cell capacity 10 gigawatt of BESS infrastructure and 2 gigawatt of reefer and input capacity.
Speaker #3: While exploring further integration across the solar value chain, this is closely aligned with the government of India's Atmanev Bharat and Dixit Bharat initiative. And the rupees 4,000 crore MOU we have signed with the government of Gujarat is the first concrete step in that direction.
Speaker #3: To close our operating priorities for the reminders remainder of FY27 are straightforward ramping ramping utilization across all four module lines converting the advanced stage order book into the confirmed POs closing out land funding and technology approvals on the cell project.
Speaker #3: Building the export footprint and the preparing the balance sheet for the next CAPEX cycle. Solex has always taken a calibrated approach to growth. We announced capacity when technology customers relationship and funding are in place and we deliver on what we announced Q1 FY27 6 at the start of the H1 H2 cow we have consistently spoken about.
Speaker #3: And we remain confident in the shape of FY27 and and in the medium-term opportunity in front of us. With that, I now hand over the to our CFO, Mr. Hamel Kachivala, to take you through the financial performance in detail.
Speaker #3: Thank you.
Speaker #2: Thank you, Chairman. Good day to all. Let me briefly walk you through the financial performance for Q1 FY27. For Q1 FY27, total revenue stood at 265.6 crore as compared to 261 crore in Q1 FY26.
Speaker #2: A growth of 1.8% year on year. EBITDA for the quarter stood at 33.8 crore as against the 42.7 crore in Q1 FY26, translating into an EBITDA margin of 12.7% for the quarter as compared to 16.4% in Q1 FY26.
Speaker #2: Below the EBITDA line, there are two further items to note. Depreciation and amortization for the quarter was 10.2 crore as against 4.3 crore in Q1 FY26.
Speaker #2: Reflecting the full quarter impact of line 3 and line 4. Which were commissioned only in November 25. Finance cost for the quarter was 12.5 crore as against rupees 5.4 crore in quarter 25-26.
Speaker #2: Reflecting the higher working capital deployment during the quarter. And the fact that a larger share of our working capital requirement was met through one base limit rather than non-fund-based facility.
Speaker #2: Together these two item account for significant part of year-on-year movement at a profitability level. Profit before tax for the quarter stood at 11.1 crore and PAT stood at 8.3 crore in Q1 FY27 with a PAT of PAT margin of 3.1%.
Speaker #2: Earning per share for the quarter was rupees 7.39. To summarize, the year-on-year movement at the profit level reflects seasonally softer volumes and the full quarter impact of depreciation and interest on our expanded capacity.
Speaker #2: And not any change in the underlying business. Our order book, our customer relationship, and the balance sheet position remain intact. With an H2 weighted execution calendar ahead, we remain confident of delivering on our revenue FY27 guidance with that we now open the floor for the questions.
Speaker #2: Thank you.
Speaker #1: Thank you very much. We will now begin the question and answer session. Parsible is connected on Zoom app. May click on the raiser icon to ask your question.
Speaker #1: Tiny turn on your audio. Announce your company name and proceed with your question. Anyone connected on the audio bridge? May press star and one to answer question.
Speaker #1: And you may press star and two to remove yourself from the question queue. Ladies and gentlemen, we will wait a moment while the question queue assembles.
Speaker #1: First question is from Rishi. Kindly announce your name, your company name, and proceed with your question.
Speaker #3: Hello.
Speaker #1: Yes, Rishi, go ahead.
Speaker #3: Yeah, hope I'm loud and clear.
Speaker #2: Yes.
Speaker #3: first of all, thank you for the opportunity, sir. my first question is, in November, you referred a total CAPEX plan of 1,500 crores, if I'm not wrong, of 1,100 crores in cell line, 2,200 crores from in module, and.
Speaker #3: Crores in working capital. and, this was funded by 1,000 crores in debt and 500 crores in QIP. but in May, the rest the reference has changed from, 1,500 crores to, 2,10,50 crores.
Speaker #3: from 700 crores via debt and 355 from equity. sir, just want to know, what made this change and, which figure should, investor community use for their reference in FY27 modeling?
Speaker #2: So, Rishi, this, you know, this vision was there when we were planning for adding an additional 2.5 gigawatt of module line. So, looking to the current market, dynamics, we have planned to, not to go with the, additional module capacity because we foresee that a lot of module capacity will be available in the market as and when, Solex required.
Speaker #2: So that's almost 200 and odd crores, has been reduced because of, no altered CAPEX plan for the module line. Plus, while working with our, vendors and our team, the project cost is around 1,050 crores.
Speaker #2: So at present, 1,050 crores out of which 700 crores from the principal lenders and 350 crores will be our margin. So at present, you can consider 1,050 crores for the 2.2 gigawatt of cell line.
Speaker #2: That is the, immediate expansion plan as well.
Speaker #3: Understood, sir. Understood. And, seven last question that inventory grew significantly in FY26. So, from seven 1,795 millions to 2,905 millions, approx. So alongside the finished goods pileup, you have discussed, in there, any risk of inventory obsolescence or return, write down given by the pace of module technology change?
Speaker #2: Excuse me, let me get into the seasonal impact, but the technological change is not an impact because we have the latest generation of modules, manufactured by us.
Speaker #2: The mainly the G12R. So this is a, you know, the seasonal impact and all the inventory. So last year also, if you say, see, the same pattern was continued.
Speaker #2: And similarly, in the current quarter, the current after the same thing is going on. So maybe with the, you know, once the monsoons are over and the fees are ready for installation and everything, this all inventory pileup and everything will go.
Speaker #2: And again, that's the reason you see the first half and the second half, you know, the huge difference. So almost you see the Solex, predictory difference is one is to three, you know, that is the huge gap and the way Solex is being performed.
Speaker #3: Understood, sir. Understood. Thank you. That's all from my side.
Speaker #2: Thank you.
Speaker #1: Thank you. Next question is from the line of Mandira. Kindly announce your company name and proceed with your question.
Speaker #4: Thank you for the opportunity, sir. This is Mandira from Investo. Couple of questions from my side. So, with India's BS order pipeline, at around 50 GW is expected to award over next 24 months, so which is likely to double the addressable solar market size.
Speaker #4: So what gave Solex the credible right to win despite having no manufacturing track record?
Speaker #2: Yes. Yeah. So I think, BES is something which is quite exciting journey, in India. And, basically, you know, currently, there is, dependency on import of, technology.
Speaker #2: In BES, in India, also those who are setting up the BES manufacturing currently, they are, much more dependent on, the import of the whole technology.
Speaker #2: And so basically, Solex has already announced the BES, expansion, manufacturing expansion in fact, you know. So, its total 10 gigawatts, which we'll do in two phases.
Speaker #2: Five plus five. So we have already started evaluating technology and then, you know, on a multi-front, for BES. And, we would like to catch up, this, BES journey also, Indian BES journey.
Speaker #2: And not only Indian, but overseas BES journey also. in a days to come. So, at present, there are very few manufacturing setup, for the BES in India.
Speaker #2: And which are just on a trial basis. those projects, which are already awarded, in fact, you know, they have their own timeline to, finish their, and commission their projects.
Speaker #2: So, we'll be able to catch up, this journey, you know, once, we reach to that stage of, going for the, I mean, adding the best, to the existing plant or the new plant upcoming plant.
Speaker #2: So, Mandira, to add on what Chetanbhai mentioned, like if you have seen the Solex journey, you know, we closely work with top-notch, tier one manufacturers, solar manufacturers in China.
Speaker #2: So same approach was there in the module line. as Chetanbhai mentioned, we are we are technologically tired of being one of the most reputed, cell manufacturers in China.
Speaker #2: So same, thing we'll follow for BESs also. So we are in the advanced state of discussions with our. So what technological partner we have to onboard and how the entire setup is to that.
Speaker #2: So as and when things are there, so we are we're not doing we are not going to just jump in the BESs being the, you know, the opportunity and everything.
Speaker #2: But whenever we do, it will be very deliberated, man. Yeah.
Speaker #4: got it, sir. That's great. So secondly, how does your cost structure and the product quality when it is compared with the Chinese competitor in the targeted export market?
Speaker #4: And particularly given that India's higher revenue model, module is there, in ASPs?
Speaker #2: Are you referring to solar module or you are referring to BESs? Solar module.
Speaker #4: solar modules.
Speaker #2: Okay. So basically, you know, Chinese are otherwise they are they have their own business strategy and they are very aggressive in the, overseas market.
Speaker #2: And, so basically Solex is finding place, where there is, some preference for the Indian model manufacturer. So we go very strategically in, marketplace where there is a preference for Indian module.
Speaker #2: Indian modules are not that bad in terms of pricing. We are competitive but yes, Chinese strategically they place prices in such market where it is very difficult to compete with them.
Speaker #2: but yeah, I mean, you know, as I say, we focus on a market where there is a preference for Indian modules. Otherwise, you know, in terms of, scale of economy in India and overseas in terms of quality, I think, the Indian modules are at par with Chinese and sometimes they are the Indian modules are better in terms of quality and reliability.
Speaker #2: It is just a strategic placement of pricing and the, the I mean, the grants which are available for the overseas market for the Chinese manufacturers, which is now, you know, the Chinese government is removing.
Speaker #2: So the real competition will and the real situation from the Chinese price will, come in front, in, few quarters now. And, so our focus is majorly as far as overseas market is concerned, it's a Middle East, Africa, Europe, and we are trying to establish, on US market as well.
Speaker #2: But currently we have majorly focus on Europe, Middle East, and Africa. Other than India.
Speaker #3: Mandira, but in our projections, the export revenue is on a very lower side for the FY27. So we, you know, we are making our president felt and we are, we have identified a full-fledged, team to represent Solex in the European market.
Speaker #3: So as and when the right opportunity is there, Solex will be ready to, to have that opportunity.
Speaker #4: got it, sir. all the best for the coming quarter. This answers my question. Thank you so much.
Speaker #2: Thank you, Mandira.
Speaker #1: Thank you. Next question is from the line of Manansha. Kindly announce your company name and proceed with your question.
Speaker #5: Yeah, hi. Manan here from MoneyBee. Thank you for the opportunity. Sir, historically, we've seen that Q1 is not as weak as we have performed this, quarter.
Speaker #5: So what resulted in such a weak performance in Q1 despite, you know, having so much capacity available?
Speaker #2: So as you mentioned, like, you know, Q1, the entire line three and four was operating. So all the interest depreciation and, these expenses were there.
Speaker #2: Comparatively, revenue was not to that side. Secondly, there were some EPC government revenue, which was booked in the, FY, you know, first quarter of, '26, which are not here because, we have Solex has stopped doing the we are taking very government projects very, you know, on niche basis or very selectively.
Speaker #2: So these.
Speaker #5: No, I went on the module side. generally, April, May, and June, this time monsoon was also delayed. So I would have assumed that execution would have been stronger.
Speaker #5: Versus what we've reported in general. So.
Speaker #2: Because of real announcement of ALM2. You know.
Speaker #5: But our orders were mostly not were outside of ALMM, right?
Speaker #2: No, no. So there was a mix of ALM and so people slowed down. You know, Manan, so what people have done, they've ve seen the first June, was a very tight schedule for people to implement.
Speaker #2: Suppose if my, solar farm is ready and I don't get connectivity from the grid because of any reasons on the part of grid, then the whole project will be in problem.
Speaker #2: In fact, if you see when the government announced and then they have given a limited window for people those who have stuck. So I think so some 4,000, 5,000 applications were received whereby the project was stuck because of 9,500 applications were received where the projects were almost all almost on the ready stage or the modules majority of modules and everything were delivered.
Speaker #2: So this was, you know, the industry did not have clarity. Secondly, people were not clear whether they have to buy the ALM compliant modules or the non-compliant.
Speaker #2: So what people thought is better to wait and watch. Now, with the clarity that government has given selective extension, people have got clarity and the orders are, getting converted and in fact, so a lot of orders, you know, they'll hold the delivery but chicken by mention.
Speaker #2: That deliveries were hold or so their orders are not canceled but they are extended. So I think so, you will see in the, second half, we'll be able to cover this number.
Speaker #2: So we will.
Speaker #3: I'll, I'll add to, you know, I'll explain the situation. Like the order situation. there are orders which are already grandfathered projects. Like so the ALCM impact, I mean, the ALCM mandate doesn't impact on those orders.
Speaker #3: What, you're writing. Those orders are the H2 orders or delivery and, and the, I mean, to be converted in revenue. You know, because the, post monsoon only they execute the project.
Speaker #3: These are the utility scale projects. Another set of orders are the captive projects where there was a lot of confusion because of the ALCM.
Speaker #3: And then, due to that, there was a deferment of a delivery schedule and timing and everything. because the mandate came with the immediate effect without having any timeline and then the government landed up to into the 9,500 applications.
Speaker #3: for the commissioning and the, granting them extension. So with that background, government, you know, in fact, they have extended this till, till the month of, December, for the commissioning.
Speaker #3: So, meanwhile, the announcement came in, you know, mid of, July. So that was a, full-fledged monsoon season everywhere. So, you know, those who, are granted extension, they are now waiting for the monsoon to get over and execute their projects.
Speaker #3: So basically, this situation is with everyone. So you know, I mean, the situation will be improved once the monsoon gets over and then there will be a lot of pressure in, you know, execution of projects and delivery of a module for both the segments.
Speaker #3: the grandfathered projects and the captive and, those who are advantage extension for time. Such a time.
Speaker #5: Okay. Okay. And out of your order book or pipeline that you say of three three and a half thousand, how much of this, can get impacted by, this ALMM2?
Speaker #3: majority of our the grandfathered projects and, almost about you can say 20% of orders, will be, which are having the vulnerability from, this segment.
Speaker #3: But now because of the extension, that problem is also solved.
Speaker #5: Okay. And you also mentioned in your commentary that you have tied up with some cell manufacturer, if at all, this, ALMM gets implemented. So can you, highlight with whom have you, tied up and what sort of, arrangement it is that ensures guarantee of cell availability to you?
Speaker #3: Yeah. So we are, already working with, three cell manufacturers in India. And, you know, we are buying, domestic, early manufactured cells from them for the DCR, supply.
Speaker #3: Which is at the, at very smaller, volume right now. And, we have, signed MOU with, a couple of upcoming cell lines. They are likely, I mean, one of them they have because I'm unable to announce the names because of the NDA which I signed with them.
Speaker #3: And, you know. So we have to work with the multiple cell manufacturers. One of them they have already started partially they are operational and they are on a ramp-up phase.
Speaker #3: Once they complete the ramp-up phase, they will they've already committed, one gigawatt of cell supply per annum, to us. And there are two other manufacturers they are already on the verge of starting their production line.
Speaker #3: So I think once we are done with, we will, whatever I'm trying to say is that, quarter four, last quarter of this financial year, we'll have a clear visibility for the domestically available cells because right now we are totally tied up with the, grandfathered projects.
Speaker #3: And, so, we have a limited space available for, the to take, take on the DCR mandated, projects right now. So next, we will have a subvention supply where there will be.
Speaker #3: A majority of these projects will have a DCR mandate and we will have a subvention supply. from those who we, with whom we have signed the, and I mean, the MOUs, and with the quantity of almost about two and a half gigawatt of cells.
Speaker #3: All right. And these are all like, you know, the G. Large cells. Currently, G12R cells are not available. And those who, with whom we signed contract, they are producing only G12 cells.
Speaker #3: They are converting their production line to G12R. Once the conversion happens, then, you know, we'll have a supply.
Speaker #5: Wonder and also the, FY27, majority of revenue is coming from the non-DCR. So non. ALMM listed.
Speaker #3: So you know, at so let's we'll require mainly DC DCR cells from April onwards. So April 27, April 27 and we believe at the time our requirement will be there.
Speaker #3: There'll be a lot of capacity available in the, market because a lot of lines are the installation phase and on the ramp-up phase. So till the time requires DCR module, a lot of, cell availability will be there in the market.
Speaker #5: Okay. And also in your commentary, you've mentioned that you have confirmed POs of around eight to nine hundred odd crores. so is, is this the execution that can be expected till December?
Speaker #5: And, how do you see the balance order book being divided into PO?
Speaker #3: These are to be executed by the December, this year.
Speaker #5: Right. But from, from your, inquiry pipeline, is there a possibility of further orders getting converted into PO till December or this is the execution that you're expecting will happen?
Speaker #3: These are the orders we have already closed it at that reason we have mentioned here. There are many orders in the, the second. You know, I write I mean, if you remember, I mentioned the different.
Speaker #3: so there are MSA already signed and then we are waiting for the time, waiting for the timeline and, back by the from PO. So these are the orders which we'll announce once we keep closing one by one.
Speaker #5: Okay. And any update on our cell line project because we have been talking about doing closing the land deal for the past many quarters and also the funding arrangement.
Speaker #5: and, you know, still there is no, any conclusion on either of them.
Speaker #3: So there are two answers. One is that land we have already procured and, we applied for the electricity connection in Gujarat, you know, it is it has its own time because of the availability of there is a huge requirement for the electricity.
Speaker #3: we applied for 30 megawatts of connection and then, you know, we are waiting for the government to, give us in writing in principle approval is already verbal approval is already done.
Speaker #3: We are writing, waiting for the written approval. Once we have a written approval, then we will have all like other documentation in process. And, so that is one part.
Speaker #3: Second part is the changing in strategy because, you know, first of I mean, initially we were of, we were our planning was to raise, the equity through the QIP and, Pref round.
Speaker #3: But then the market situation is not something which is, favorable for. Round and we have changed to the structured date. And, so for to raising this, through this route, the deal due diligence and everything is, completed and, the matter is at the final stage of, you know, evaluation, with the, investors.
Speaker #3: And the funding agency. So these are the two major factors where, like, you know, we have little we are taking a little bit more time than what it was, expected.
Speaker #3: But I think we are on track. And our preparation and homework is such that, we will, ensure that whatever that time we have, consumed on, the fa this phase, we will overcome in terms of, for the execution.
Speaker #3: Because almost everything is designed, the agencies, everything is, aligned. we will announce everything once the, finance closer is done and then, you know, we get a confirmation from the electricity connection.
Speaker #3: These are the two, major points that we want to, close. Before we openly, come, come in the market and end with our announcements and the time schedule and then to whom we are working and everything.
Speaker #3: Thank you, Manav.
Speaker #5: Okay. I just have one last question if you may permit.
Speaker #2: Good.
Speaker #3: Hi. Yes.
Speaker #5: Yeah. so, you know, initially we used to talk that, we, we would, we would be manufacturing for the world and not only for the Solex brand.
Speaker #5: So are there such opportunities still available in the market or those opportunities have dried up because, you know, are utilizations are fairly low and, or is there a shift in strategy now that now we will only manufacture a Solex brand or?
Speaker #3: Yeah. So it's a good question. In fact, you know, the facility which we have designed and then, you know, we are operating which is as for the global standard and in previous year we have already manufactured for the, world leading I mean, the world number one rack.
Speaker #3: So we are already in a discuss and, and, on a agreement stage with the other brands also. And, you know, we'll manufacture for them.
Speaker #3: this is these are all will be the Solex branded modules. you know, for their clients. So basically, you know, in India, you know, those foreign foreign brands, they cannot sell in India because they don't have any manufacturing.
Speaker #3: facility of their own. And so they cannot sell with their own brand. So they have adopted Solex brand and likewise other companies are also, in discussion.
Speaker #3: And they are, like, waiting for the, confirmation and, on the timelines and everything from their client and from our side as well. So this journey is on.
Speaker #3: And, it's a very, you know, because we have already done for two companies which are globally top five, companies and then, this past track record the other companies are also quite, open for us.
Speaker #3: As far as the OEM contract manufacturing, is concerned about the global brands, we, now basically, you know, we are focusing on that segment as well.
Speaker #3: Up till now, because our capacity previous years, our capacity was limited, the capacity got expanded in, December. And then it was backed by the orders.
Speaker #3: Now, We do have some visibility for, taking the contract manufacturing orders also from the global brands. So we will look into those segment also because currently up till December, we don't have any visibility to take, such task.
Speaker #3: because we are it's all backed by the, the existing orders. And, quarter four, we will evaluate whether if we are able to close, complete capacity, you know, available capacity with the domestic orders and we'll focus, on the contract manufacturing in the next financial year.
Speaker #3: But yes, for the Indian projects from the global, global brands, we are already in discuss and we are likely to, close something, you know, for the Q4 for the Indian projects.
Speaker #3: From them.
Speaker #5: Okay. Sure. Thanks. I'll get back in the queue.
Speaker #2: Thank you very much. Next question is from line of Bhavya Agarwal from Share India Securities. Please go ahead.
Speaker #3: Hi, sir. Good morning. Am I audible?
Speaker #2: Yes. Go ahead.
Speaker #3: Yeah. Hi. So, sir, how much of the current order book is with the top three customers and, what is your single largest customer concentration?
Speaker #4: sorry, can you just repeat your question? There was some voice right now.
Speaker #3: Yeah. Yeah. Sorry. So how much of your current order book is with the top three customers and, what is your single largest customer concentration?
Speaker #4: Okay. So as of now, you know, for the close orders, the single largest orders order is of, 600 plus, crore. That is a single largest order that we have closed.
Speaker #4: And, the second highest is 175 crore, which we are now, you know, we have already prepared document and agreed on the just assigning, is pending, which is backed by the LOI also from LOI.
Speaker #4: And, the third order which I have mentioned is a 42 crore, for the modules from the, domestic, captive projects. So these are the three orders which I have already mentioned in my, commentary.
Speaker #4: And apart from that, we have, one inquiry for, almost about, 2 gigawatts, but then we are, you know, committing them almost about 4 gig 400 megawatt in this financial year and then raised in the next financial year.
Speaker #4: And so these are the order size that we are working. Besides the, like, you know, any something in range of 5 megawatt to 50 megawatt, domestic orders which are the captive orders.
Speaker #3: So, you know, Chetanbhai thought on light on the orders we are completing till December, but if you see our order book like the order book what we are mentioning is of mix of clients.
Speaker #3: Secondly, you know, at Solex, we have a lot of repetitive orders, but last year, last year also ongoing basis, we had an inquiry of almost 4,000 crores with us.
Speaker #3: And these were not just rowing inquiries, but these inquiries were backed by their, audits or their facilities our facilities already audited, but the delivery scheduled and price mechanism was under discussion.
Speaker #3: So there is a complete flow of new orders. And but since the we have comfort with our existing customers, so it's a vice versa.
Speaker #3: So we see repet repetitive orders. Okay, sir. Understood. Understood. And, how is the, EPC order book trending separately from the module order book and what, margin differential exists between the two?
Speaker #4: EPC, you know, as you have mentioned previously, EPC is not a ma major focus. So, around around, you know, 100 and 150 crores of business, what is what we target from the EPC business.
Speaker #4: And these are, generally the from the CNI segments. You know, generally arranging between 1 megawatt to 5 megawatt of orders and some rooftop of orders.
Speaker #4: You know, at Solex, our major business comes from IPC. So we don't want to look like a competitors for our customers. So at Solex, we have, approach.
Speaker #4: We have to go very minimal. So, like, we have a target of almost around 100 and 150 crores coming from the EPC business. And margin, I think so it's it's around, 10 to 12%.
Speaker #3: Okay. Okay, sir. Got it. one, last question from my side. So, sir, the module capacity utilization for FI26 averaged around 70%, but your FI27 guidance is built on more conservative 55% utilization.
Speaker #3: Assume assumption despite the incremental 2.5 gigawatts coming online. Why the more conservative assumption for the bigger basis?
Speaker #4: So as the capacity is increased previously, we are operating with 1.5 gigawatts. And now we are at 4 gigawatts. So looking to the scale and everything, and, if you see the average industry utilization, it is, 50%.
Speaker #4: So plus due to the disruption what has caused because of ALS and everything, sir, this year you can say it was a turbulent year, for the industry.
Speaker #4: Because of the, whether the ALM will be introduced, it will not be produced. So a lot of people were wait and watch approach was there.
Speaker #4: And this is the reason, we have been a little bit, you know, conservative and this is the, what we have target for the current year.
Speaker #3: there was a lot of focus on, the domestically as domestic cell manufactured, projects. So, we all of us
Speaker #1: Note that there is a delay in , you know , capacity building for the cell . So basically , you know , the whole model manufacturing segment is dependent on , you know , they were dependent on domestic sales , but which are not sufficiently available at this moment and which are likely to be available by within a year time .
Speaker #1: So there is a huge dependency on a project which are grandfather projects and which has created a lot of confusion . You have seen like , you know , from May , June and July , there was a lot of confusion .
Speaker #1: And now there is some clarity from the office . And then post-monsoon , it will cover up So the capacity utilisation , we are being very conservative .
Speaker #1: You know , considering all these factors . And , you know , loss of production , which we had slowed down in the production , which we had in those two months .
Speaker #1: Yeah So that's .
Speaker #2: It from my side . Thank you for the opportunity
Speaker #3: Thank you very much Next question is from the line of Ashish Kolekar Kindly announce your company name and proceed with your question
Speaker #4: Hi , sir . Hello , sir . Ashish from LLP . AM I audible
Speaker #1: Yes , yes
Speaker #4: I wanted to understand , like many of your peers , if you see those who are coming into cell , be it . Jupiter , be it vari or many others , you understand that with respect to cell manufacturing , everyone has .
Speaker #4: I'm not pointing out to any particular player , but whatever . 8 to 10 names are there in India , you would be knowing that they are facing decent problems with respect to execution issues .
Speaker #4: Availability issues . And you also understand that it's not so easy . Compared to other teams . And the value chain when it comes to cell manufacturing .
Speaker #4: So wanted to understand that How are you going about this execution with respect to the availability factors and the flat power and water , and also wanted to understand whether you scope is for 5 or 2 gigawatt .
Speaker #4: If you know , some light on your plans with respect to sell manufacturing units . Thank you
Speaker #1: Good question . In fact , you know , I'll just answer this , you know , in part The first thing is that the second question we ask is a 2.2GW gigawatt hour project is five gigawatt , which we are executing in two phases .
Speaker #1: That is 2.2 and three . So we will have a single site having five gigawatt of cell manufacturing . So you know that is the answer to your second question .
Speaker #1: The first question , which is operational challenges , which you mentioned , we mentioned correctly that India has a lot of challenges in terms of operations .
Speaker #1: There are like , you know , I'll just take a little deep dive on this question because , you know , whatever that capacity currently available in India for as far as the cell manufacturing concern , most of those capacities are the only technology , which is a monopoly .
Speaker #1: So and there are very few players operating with the topcon lines . There is a sizable capacity almost to the tune of five gigawatt , which is the proprietary technology .
Speaker #1: We can say it is GT and so if you don't consider those proprietary technologies and you know , we have only the monopoly and the top available in Topcon , also , the most of the capacities are like 80% of the capacity are manufacturing and ten are cells .
Speaker #1: And no , there are a couple of players only manufacturing heat well or GTL assets . So these are the makeup of the cell capacity is available as far as the technical challenges are concerned .
Speaker #1: See there are two parts . One is the infrastructure availability of infrastructure , which is water and connection , which is fine . Like , you know , it takes its own time .
Speaker #1: It depends upon in which pocket you are putting up your plant . Gujarat being very highly industrialized place , you know , it has a bit more challenge in time .
Speaker #1: But then when it comes to the operational part of it , I mean , the availability of this infrastructure , consistency of this infrastructure is something which has , you know , very good track record .
Speaker #1: And as far as operating cell line is concerned . So once you have infrastructure available , then the challenge is operating cell line because it is a quietly given and you know , are chemically driven .
Speaker #1: The manufacturing . So it requires a lot of particularly top one is more challenging than monopoly . So understanding these challenges , because the the other companies , those who are already have already installed and they are facing the ramp up challenges , they are trying buy everything by their own or having a consultant on board voted with them .
Speaker #1: And so they are the first mover . So what we are doing is , you know , understanding the challenges are the constants is there , which we have collaborated .
Speaker #1: I mean , are we have , I mean , brought them on the board . And as you heard in my commentary that we have a very professional cell manufacturing manufacturer coming , you know , to operate these lines .
Speaker #1: And it's not only operate the line , the designing , they are involved into the right from the phase of designing the construction and the operational part .
Speaker #1: So basically , you know , these challenges are only the India currently the Chinese manufacturers are not facing these challenges , operational challenges , because , you know , they already have the experience deep experience and they are producing very high efficiency cells .
Speaker #1: So we are bringing them on board to deliver the similar output with our cell line . So , you know , just to overcome the liberty limitation of manpower , knowing , you know , problem cell , you know , we are bringing the experts here .
Speaker #1: So this is the different strategy that we are working with ahead . Thank you .
Speaker #4: So thank .
Speaker #1: You , sir . You have rightly observed the main core issues of the cell manufacturing and solar . I mentioned that , we are slow and what we have targeted .
Speaker #1: We don't want to lose on these two fronts . So we have seen people struggling with water like almost one , 50 , 200 container tankers being delivered daily for our people have to upgrade in a lot of problems .
Speaker #1: They face . So an entire infrastructure in Gujarat takes time . But what we are ensuring that these orders don't we don't face this hurdles and same thing we have solved with the technological partner on .
Speaker #1: Thank you . Thank you
Speaker #3: Do you have any follow up question
Speaker #4: No , sir . Thank you . Thank you so much
Speaker #3: Thank you very much Next question is from the line of Colonel individual investor . Please go ahead
Speaker #2: Hello , sir . Good morning Sir .
Speaker #1: Good morning .
Speaker #2: Good morning sir . Some independent power producers are for discoms approvals before grid stability is not ready . Sir , is this real scenario
Speaker #1: In Gujarat ? Yes . There is a situation majorly because a lot of generation which is happening in Gujarat and you know it is to be consumed in Gujarat .
Speaker #1: And that's the reason there is some load curtailment issue is going on . And then there are connectivity challenges are also going in some part of the country , not everywhere .
Speaker #1: So and this is a temporary these are the challenges . And once this national grid from the . And other other grid lines are operational , which are on a very fast track , you know , these challenges also , we will get resolved .
Speaker #1: And the way the BS is coming up . So again , that will be one of our major you know , move to solve it .
Speaker #1: Grid stability issue . So I think it's just a temporary in few months it will get resolved
Speaker #2: Okay , sir . Sir . End of FY 27 . Sir
Speaker #1: Additionally , share that . Why we why we ended up into this situation in FY 25 in India . Did 25 gigawatt of solar installation .
Speaker #1: And then in FY 26 , we ended up with almost about 50 lot of . So the sudden surge in solar generation and particularly in a very concentrated pocket of Western India , you know , that has brought put everybody into the situation .
Speaker #1: But now the other states are also very aggressively coming up with their own projects so that , you know , and Gujarat , the western part of this country , is aggressively working on the grid , additional grid availability .
Speaker #1: National grid availability . And so this will both this You know , move will change the situation
Speaker #2: Okay . Okay , sir . Okay , sir . Till end of FY 27 . India's top one cell capacity will be more than 70 to 80 gigawatt because all underlying cell capacity will be executed .
Speaker #2: But sir , will be equivalent to imported Chinese cells for existing module manufacturer .
Speaker #1: I know it will be higher . And those tenders which are already made with the domestic cells , are built with the higher price .
Speaker #1: Considering the high cost of cells . So the Indian cell cost will be higher , you know , compared to the imported right now .
Speaker #1: But till that time nobody will be allowed to import . So the price the cell available will be of the same price in the entire market .
Speaker #1: So as such it will not impact any module manufacturer because all the price will be same for all
Speaker #2: So existing only existing only module manufacturers can be survived in this market because the module . Module for module manufacturers cell price will be higher .
Speaker #2: As you say
Speaker #1: Yeah . So I don't see any very big challenge in terms of survival for the on the , you standalone module manufacturer , because the market , the way the market is growing and then the , the retail , I mean , the market is also growing so fast .
Speaker #1: The small rooftops and the industrial and commercial . And residential rooftops , these are the segments where like , you know , the standalone module manufacturer will be able to , you know , grab business , business , but yes , there will be some consolidation , which might happen in days to come and which is for good .
Speaker #1: Basically because in any small and with a limited capacity will always be a challenge . So both things will happen . One is that there won't be any major challenge for the survival , existing existence of standalone .
Speaker #1: And number two , because there will be a lot of capacity , will be available . And it's not that those who are having cell having only business , there are people like , you know , having their own connects in the market and they are able to grab the business and then they will procure cell from the existing cell manufacturer .
Speaker #1: Number two , the area is also very sensitive about this , about the availability of the merchant cell . You know , in a market .
Speaker #1: So they are also continuously in discussion with those cell manufacturers to make the cell available for the general module manufacturers . And the post that , you know , there will be some consolidation .
Speaker #1: Those who are not fit , you know , those who are unable to execute and they will have they will get , you know , some other existing players .
Speaker #1: So this market shift will definitely will happen . But if you see there are certain units which are only cell manufacturing , they don't have a module manufacturing capacity .
Speaker #1: So lot of capacities are coming whereby they are not into module manufacturing and are directly starting selling . So I think so they will also bridge this gap
Speaker #2: Okay . So this will be happen because direct some module manufacture is not adding there to solar module manufacturing line . But they also adding more cell manufacturing line .
Speaker #2: Even a new players will do the same . So sir . This for independent power producers they are waiting for approvals as we discussed that a great step in stability will be solved in upcoming months or years .
Speaker #2: But in this upcoming excessive daytime solar power will be converted into the green ammonia because these lines are not currently fully operationalised , because there are projects are cost is comparatively higher because this is added by .
Speaker #2: So is this ammonia market is . In future for this solar power due to instability of grid and over project price of this project
Speaker #1: So the ammonia . The hydrogen , everything is basically , you know , it's catching up . It will because you know , these are like , you know , a little bit complex in terms of manufacturing .
Speaker #1: You know , it will take its own time . Then commercial viability is also like , you know , that India considers the most .
Speaker #1: So these are the things which are in pipeline will take its own time . I think the base will come so fast because it is established technology and commercially also it is viable So I think India will go very fast in terms of base .
Speaker #1: And then followed by the other source of renewable energy . But yes , I all the source of renewable energy , apart from the base and ammonia and hydrogen solar will be the the main source of energy for them to produce whatever that they are meant for .
Speaker #1: So the solar has a very bright future , and it has a very long term also . Apart from that , there will be a lot of technology shift , which has already happened .
Speaker #1: So will be there are projects which will go for the repowering and they will replace their old outdated modules from their projects with the new one , which are the top one technology .
Speaker #1: So there will be constant some movement for the module in India . And , and overseas market will continue
Speaker #3: Thank you Request to come back for a follow up question
Speaker #2: Okay sir , this is my question sir .
Speaker #3: Thank you very much Next question is from the line of Jitendra Rathor . Finally , announce your company name and proceed with your question Can you hear us ?
Speaker #3: Yeah . Go ahead
Speaker #4: My question .
Speaker #1: The question was regarding the distribution strength that currently you have . I would like to know more about that Sorry . Can you please repeat the question that you have currently and what .
Speaker #3: Sorry to interrupt you . Can you please speak closer to the phone .
Speaker #1: Sir , my question is regarding the distribution strength that you have right now to know about that . Okay . So you are regarding you are referring to our sales distribution channel , right ?
Speaker #1: Yeah . What is the go to market strategy ? Okay , okay . Okay . So right . Basically , you know , we are majorly focused on the IP business .
Speaker #1: So our customers are most of the customers are the large scale IP power producers . So basically where we interact with them directly without having any channel in between .
Speaker #1: And so that is the majority of business . The second largest business is coming from the CNI segment . Which is again , you know , captive more like a utility scale or large scale rooftop where our sales team .
Speaker #1: We interact directly to the client . So we as such , we have not developed any distribution because since we don't focus on retail segment majorly on a residential rooftop and those where it actually it is .
Speaker #1: There is a requirement for the distribution channel . Our focus area is different . So we have not concentrated more on developing the distribution channel and go to market kind of strategy .
Speaker #1: We are already present market for So as I said , like in our major focus will remain on IP and utility scale . So at immediately in near future we don't have any aggressive plan to come into the distribution Since we are not focusing on that segment .
Speaker #1: Once we have our cell line up and running and then , you know , based on that , maybe post 2028 , we will give it a thought on this Thank you .
Speaker #1: Thank you
Speaker #3: Thank you very much As there are no further questions , I now hand the conference over to Doctor Chetan Shah for closing comments
Speaker #1: So thank you for your patience and understanding about the industry and about the solar . I just want to mention that renewable energy , particularly solar , is not quarter to quarter business .
Speaker #1: And you know , so this is what we have seen for more than two decades that H2 is , you know , there is a very huge movement in terms of revenue , in terms of delivery , shipment and and the also like , you know , whatever that balance or that you see , which we focus mainly on H2 because H1 , irrespective of any efforts , you know , you have a lot of challenges that we have seen majorly this climatic challenges .
Speaker #1: And this time this year , we had some policy , you know , movement , which happened . And because of that , also , there was some disruption .
Speaker #1: Industry is growing very fast . So the challenges are also like , you know , because this is one of the fastest growing industry .
Speaker #1: So have patients keep faith in the company , which you have already kept in . Now we are available on NSC and PSC , both .
Speaker #1: So , you know , we see we foresee a lot of visibility and flexibility . You know , with that as well . And whatever that expansion plan that we have it , it is like , you know , time driven .
Speaker #1: So once we announce something , we will have a more clear . You know , idea about whatever . And like , we have been very conservative in publishing and giving guidance in terms of numbers .
Speaker #1: Last year , performance also that you see that , you know , H1 and H2 difference . And these are also we are likely to do that .
Speaker #1: So thank you , Matt . Thank you very much . And I think anything in future that comes up , we are always available to answer .
Speaker #1: Thank you . Thank you
Speaker #3: Thank you very much . On behalf of Solar Energy Limited , that concludes this conference . Thank you for joining us . And you may now disconnect your lines .
