Solex Energy Ltd Q1 FY27 Earnings Analysis

- FY27 revenue target: INR 2,600 crores, based on conservative 55% capacity utilization. - Order book visibility: Over INR 3,400 crores in confirmed and advanced stage orders. - Sales volume: FY26 module sales exceeded 1 GW; Q4 FY26 utilization was ~70%. - Expect sustained higher sales in second half of each fiscal year due to seasonality (monsoon impact). - The company aims to cross the conservative revenue target comfortably. - Upcoming backward integration with cell and wafer manufacturing expected to enhance margins and support volume growth by FY29. - Expansion into Battery Energy Storage Systems (BESS) with 10 GW planned capacity, expected to be a significant growth segment independently. - Focus on innovation, digitalization, and global expansion to sustain high growth trajectories and long-term value creation.

- Solex Energy targets a top line of INR 26,000 million (INR 2,600 crores) for FY27, with a PAT margin range of 6% to 8%. - The company is conservative in its revenue guidance due to geopolitical uncertainties but expects to comfortably exceed the INR 2,600 crore revenue estimate. - EBITDA margin for FY26 stood at 11.5%, with expectations of improvement especially from FY29 due to cell line integration. - The new cell manufacturing line is expected to contribute EBITDA above 20% from FY29 onwards. - PAT margin is targeted around 6-8% for FY27 with a PAT margin improvement expected in the medium term. - The company anticipates continuous growth driven by 5 GW solar cell capacity expansion, 10 GW Battery Energy Storage System (BESS) manufacturing, and strong order book visibility exceeding INR 3,400 crores. - Working capital efficiency and disciplined capital allocation underpin sustainable long-term growth and return ratios.

- Solex Energy has planned significant capex for backward integration, including: - 10 GW of solar module manufacturing capacity. - 10 GW of solar cell manufacturing capacity (TOPCon plus IBC cells) in two phases: 2 GW and 3 GW. - 2 GW of wafer and ingot capacity. - 10 GW of Battery Energy Storage Systems (BESS) capacity in two phases of 5 GW each. - The company signed an INR 4,000 crore MoU with the Government of Gujarat for this expansion, focusing on cell manufacturing and BESS. - Cell line commissioning is targeted by end of 2027, with the first 2.2 GW phase operational by Q4 2027. - BESS will be developed as a separate subsidiary with a clear independent business plan. - Land acquisition of 60-70 acres is underway, pending connectivity approvals expected by June 2026. - Planned financing includes INR 350 crores from NCD and CCD, expected to close by June 2026. - Total capex strategy aims to strengthen supply chain control and enhance competitiveness.

- Solex Energy Limited is planning fundraising of around INR 350 crores through Non-Convertible Debentures (NCD) and Compulsorily Convertible Debentures (CCD). - The breakup mentioned is approximately INR 200 crores through NCD and INR 150 crores through CCD. - Legal due diligence for this fundraising is underway, with expected closure between June 15 and June 30, 2026. - The company expects total outside liabilities (including this fundraising) with a Total Outside Liability to Tangible Net Worth (TOL/TNW) ratio below 4, even after the upcoming capex. - The fundraising is aligned with the company’s expansion plans, including backward integration and capacity ramp-up.

- Solex Energy has an order book visibility of approximately INR 3,400 crores as of May 18, 2026. - The order book comprises three parts: confirmed Purchase Orders (POs), signed Master Service Agreements (MSAs), and advanced stage orders. - The company is actively executing these orders while simultaneously bidding for and adding new orders. - Discussions and potential orders from KP Group are ongoing, with some orders executed last year; specifics are yet to be finalized. - The order inflow for FY '27 is expected to continue as new orders are being added on top of the existing INR 3,400 crores order book.