Solex Energy Ltd Q3 FY26 Earnings Analysis

- Solex is on track to achieve around Rs. 2,000 - 2,200 crore revenue for FY26, primarily from the ramp-up of Line-3 and Line-4 (4 GW capacity) operational from October end. - H2 FY26 is expected to see higher capacity utilization and stronger sales, recovering from delayed deliveries due to an extended monsoon. - The company anticipates surpassing past turnover levels with increased scale of operations and expects EBITDA margins of 16-18% in H2 FY26. - New cell line production (2.2 GW N-Type TOPCon Plus) is targeted for commissioning by March 2027, which will further drive growth. - An incremental 2.5 GW module capacity is planned, with options being explored for location, expected online by end of H1 FY27. - The order book stands strong at Rs. 4,000+ crore, including pending POs and Master Sales Agreements, to be executed during FY26 and FY27. - Export opportunities, especially to the US and Europe, are expected to increase, contributing to future volume and revenue growth.

- **Revenue Growth:** Expectation to achieve Rs. 2,000-2,200 crore revenue in FY26, with strong order book of Rs. 4,000+ crore for FY26-FY27. H2 FY26 is expected to see higher capacity utilization and revenue conversion from inventory pile-up in H1 due to extended monsoon delays. - **EBITDA Margins:** Anticipated improvement to 16%-18% EBITDA margins in H2 FY26 due to better absorption of fixed costs with commission of new lines; current EBITDA margin improved to 14.7% in H1 FY26 from 9.6% in H1 FY25. - **Profit After Tax (PAT):** PAT margin rose to 7.3% in H1 FY26; with scale-up and operational efficiency, PAT expected to surpass prior year levels. - **EPS:** With operating profit growth and capacity ramp-up, EPS improvement is expected alongside revenue and margin growth. - **Long-Term:** Commissioning of advanced 2.2 GW N-Type TOPCon Plus cell line by March 2027 to further drive profitability and technological competitiveness.

- Solex Energy is undertaking a total CapEx of Rs. 1,500 crore: - Rs. 1,100 crore for setting up a 2.2 GW N-Type TOPCon Plus solar cell manufacturing facility targeting commissioning by March 2027. - Rs. 200 crore proposed for additional 2.5 GW module capacity. - Rs. 100 crore for working capital. - Land for the cell manufacturing project has been identified; power and water infrastructure discussions are at advanced stages. - Funding for these investments is in advanced discussions with financial institutions, with expected bank debt of Rs. 1,000 crore and Rs. 500 crore to be raised via equity (QIP). - The company is exploring options for the incremental 2.5 GW module capacity, including acquiring adjoining land, establishing capacity where cell lines are set up, or a new facility in southern India. - Technology collaborations include ISC Konstanz, aiding advanced technology integration and faster execution.

- Solex Energy is planning a total CapEx of Rs. 1,500 crore, including Rs. 1,100 crore for the cell line, Rs. 200 crore for the proposed module, and Rs. 100 crore for working capital. - Funding plan: - Rs. 1,000 crore from bank debt. - Rs. 500 crore through raising equity via a Qualified Institutional Placement (QIP). - Discussions with bankers and financial institutions are ongoing, and engagement is expected to close soon. - The company is progressing on planned funding structures, with discussions at an advanced stage. - Current elevated debt-to-equity ratio is due to project-related drawdowns, expected to improve as operating cash flow strengthens in H2 FY26.

- Current order book stands at over Rs. 4,000 crores, inclusive of Rs. 100 crores from EPC orders (as of September 30, 2025). - Order book execution timeline spans FY ‘26 and FY ‘27, with certain orders to be delivered by March 31, 2026, and others in FY ‘27. - Order book comprises three stages: - Confirmed Purchase Orders (POs) received. - Master Sales Agreements (MSA) signed, awaiting POs. - Finalization of MSAs underway. - Work-in-progress (WIP) orders amount to approximately Rs. 1,300 crores, scheduled for delivery by March 31, 2026. - Including existing inventory of Rs. 153 crores (finished goods ready for dispatch), total deliverables approximate Rs. 1,450 crores for immediate sale. - Dispatches of accumulated inventory are underway, with expectation to clear by early December 2025, aiding revenue recognition in H2 FY ‘26.