Solex Energy Q1 FY27 earnings call

Where management's figures differ from the filing

• EBITDA: said ₹33.8 cr (margin 12.7%); filed ₹28.98 cr excl. other income (margin 11.1%). Stated EBITDA is ~₹4.8 cr higher than filed EBITDA, matching other income of ₹4.81 cr; management's stated figure appears to include other income without flagging the definitional difference.

What moved the numbers, as management explained it

• Seasonally soft Q1 (H1) with module dispatches and EPC completion largely H2-weighted; Q1 revenue base smaller for absorbing fixed costs.
• Full-quarter depreciation ₹10.2 cr (vs ₹4.3 cr Q1 FY26) reflecting Line 3 and Line 4 commissioned only in November '25.
• Finance cost ₹12.5 cr (vs ₹5.4 cr Q1 FY26) on larger working capital deployment via fund-based limits vs non-fund-based facilities.
• ALMM/ALCM clarification on 25 May 2026 led to wait-and-watch and customer-driven rescheduling of module deliveries (timing shift, not cancellation).
• ALCM mandate for captive projects caused deferment of deliveries into H2 post-monsoon; some government EPC revenue from Q1 FY26 also absent.

The numbers management led with

• New order pipeline (executable by Dec 31, 2026): INR845.84 crore (INR628+ cr July order + INR42.47 cr August order + INR175 cr LOI/MSA)
• Total order book visibility: Approximately INR3,400 crore
• Capex plan for cell project: INR1,050 crore (revised down from INR1,500 cr; INR700 cr debt + INR350 cr NCDs/CCDs equity)
• Gujarat MoU under Vision 2030: INR4,000 crore MoU with Government of Gujarat

Guidance on this call

What changed since the Mon 18 May 2026 call

By business

Balance sheet, capex and funding

• Inventory grew to ~₹2,905 million in FY26 from ₹1,795 million; seasonal pile-up expected to clear post-monsoon.
• Capex plan ₹1,050 cr for 2.2 GW cell line: ₹700 cr debt + ₹350 cr equity (NCD+CCD); QIP route dropped in favour of structured debt.
• Depreciation Q1 FY27 ₹10.2 cr; finance cost Q1 FY27 ₹12.5 cr; both elevated vs Q1 FY26 on expanded 4 GW module capacity.
• Debt component ₹700 cr at advanced stage with principal lender; equity ₹350 cr at final evaluation with investors and funding agency.
• Land parcel for cell plant: procurement done; applied for 30 MW electricity connection, awaiting written approval.

The industry, as management sees it

Management sees continued strong industry growth but acknowledges concentrated grid stress in Western India (especially Gujarat) from the FY26 doubling of installations to ~50 GW; expects National Green Grid and BESS deployment to ease the issue in coming quarters. Views domestic cell pricing as structurally higher than imports and believes standalone module manufacturers will survive via captive/rooftop segments while some consolidation occurs. Long-term view is bullish on solar including repowering of legacy Mono PERC projects with TOPCon.

Risks management named

• ALMM-2/ALCM mandate created wait-and-watch among developers, shifting delivery schedules
• Higher finance costs as working capital is increasingly funded via fund-based limits
• Full-quarter depreciation/interest impact from Lines 3 and 4 compressing near-term margins
• Cell manufacturing execution complexity - water, power connectivity and recipe-driven ramp-up
• Grid stability and DISCOM connectivity delays for utility-scale IPP projects in Gujarat

Not answered directly

• Cell-project finance closure timeline
• Cell-project land electricity approval written confirmation
• OEM contract manufacturing order closure timing

Asked for a number, answered without one

• Top-three customer concentration as % of order book: Management named individual order sizes (₹600+ cr, ₹175 cr, ₹42 cr) and a 2 GW inquiry/400 MW commitment but did not give a top-three concentration percentage.
• Phase 2 (3 GW) cell line capex split and timeline: Confirmed 5 GW total in two phases (2.2 + 3 GW) at single site, but no date or capex split for the 3 GW phase given.
• Module margin separate from EPC: EPC margin given as 10-12%; module margin not separately quantified.

Every question, with its answer

1. 1. Capex revision - INR1,500 cr to INR1,050 cr

   Rishi, Unknown

   Question. In November you referenced a INR1,500 cr capex plan (INR1,100 cr cell + INR200 cr module + INR100 cr WC), funded by INR1,000 cr debt and INR500 cr QIP. But in May the reference has changed to INR1,050 cr (INR700 cr debt + INR350 cr equity). What drove the change and which figure should investors use for FY27 modeling?

   Answer, Mr. Vipul Shah, Non-Executive Director. The original INR1,500 cr vision included an additional 2.5 GW of module line. Given current market dynamics where plenty of module capacity will be available when Solex needs it, management has decided not to go with the additional module capex. Almost INR200 cr is reduced on that count. While working with vendors and internal team, the project cost has firmed up at INR1,050 cr: INR700 cr from principal lenders and INR350 cr from the company (margin). Investors should use INR1,050 cr for the 2.2 GW cell line - the immediate expansion plan.

   Follow-up. Inventory grew from INR1,795 mn to INR2,905 mn in FY26. With the finished goods pile-up you discussed, is there any risk of inventory obsolescence or write-down given the pace of module technology change?

   Answer. No technology obsolescence risk - Solex manufactures the latest generation G12R modules. Last year the same H1 inventory pile-up pattern was visible and unwound in H2 once monsoons ended and fields became ready for installation. Solex's H1:H2 revenue gap is historically about 1:3 and the same dynamic is expected this year.

2. 2. BESS opportunity and competitive positioning

   Mandira, Investo

   Question. With India's BESS order pipeline at ~50 GW expected to be awarded over 24 months, effectively doubling the addressable solar market size, what gives Solex the credible right to win despite having no manufacturing track record in BESS?

   Answer, Dr. Chetan Shah, Chairman and Managing Director. Acknowledged BESS as exciting and noted that India is currently import-dependent on BESS technology. Solex has already announced 10 GW of BESS manufacturing (5+5 phases) and is evaluating technology on a multi-front basis - targeting both Indian and overseas BESS journeys. There are very few BESS manufacturing setups in India and existing awarded projects have their own timelines. Management will catch up the BESS journey when adding to existing or upcoming plants.

   Follow-up. How does Solex's cost structure and product quality compare with Chinese competitors in targeted export markets, particularly given the higher module ASPs in India?

   Answer. Chinese players are very aggressive in overseas markets and strategically place prices; Solex focuses on markets where there is a preference for Indian modules - Middle East, Africa, Europe and working on US. Indian modules are competitive on pricing and at par or better on quality/reliability vs Chinese. As Chinese government removes export grants, real competition will surface in coming quarters. Export revenue is on a lower side for FY27; Solex has identified a full-fledged team to represent it in Europe.

   Partly answered.

3. 3. Q1 FY27 weakness - ALMM-2 and seasonality

   Manan Shah, Moneybee

   Question. Historically Q1 has not been as weak as this quarter's performance. What resulted in such a weak Q1 despite capacity being available? And on the module side, April-May-June with delayed monsoon should have supported stronger execution.

   Answer, Mr. Vipul Shah, Non-Executive Director. Q1 had the full quarter impact of Lines 3 and 4 interest and depreciation with revenue not matching. Also FY26 Q1 had some EPC government revenue that is not present in FY27 since Solex has stopped taking government projects selectively. Module-side: 1st June was a tight deadline for implementation and connectivity-related grid issues forced projects to wait; industry received 4,000-5,000 stuck project applications plus 9,500 nearly-ready applications. With ALMM clarity post-July, orders are now getting converted - orders are not cancelled, deliveries are extended.

   Follow-up. Out of your INR3,400 cr order book/pipeline, how much can get impacted by ALMM-2? And on cell manufacturer tie-up, can you highlight the partner and arrangement that guarantees cell availability?

   Answer. Majority of orders are grandfathered projects; only ~20% carry vulnerability from ALMM-2 segment, and with the December commissioning extension that problem is now solved. On cells, Solex works with three domestic cell manufacturers today for smaller DCR volumes and has signed MOUs with a couple more. Names cannot be disclosed under NDA. One partner is partially operational and ramping up - they have committed 1 GW/year cell supply. Two others are on the verge of starting production. By next year Solex expects ~2.5 GW/year G12R cell supply from these arrangements.

4. 4. Cell project closure and OEM strategy

   Manan Shah, Moneybee

   Question. Any update on cell line project - land and funding have been talked about for many quarters with no conclusion? And the earlier strategy of contract manufacturing for global brands - is that opportunity still live given low utilization?

   Answer, Dr. Chetan Shah, Chairman and Managing Director. Land is procured and 30 MW electricity connection has been applied for in Gujarat with verbal approval - waiting for written approval from government. On funding, strategy changed from QIP/PREF to structured debt (NCDs/CCDs) since market conditions were unfavorable for QIP; due diligence completed and matter is at final evaluation stage with investors and funding agency. The time consumed will be offset during execution since design, agencies and alignment are all in place. On contract manufacturing - facility already manufactured for a world-leading brand last year and is now in agreement stage with other brands. Until December capacity is fully booked by existing orders; Q4 will evaluate if any surplus capacity is available for global brand contract manufacturing in the next financial year.

   Partly answered.

5. 5. Customer concentration and order book mix

   Bhavya Aggarwal, Share India Securities

   Question. How much of the current order book is with top three customers and what is single largest customer concentration?

   Answer, Dr. Chetan Shah, Chairman and Managing Director. Single largest order is INR600+ cr; second is INR175 cr (LOI backed, signing pending); third is INR42 cr (domestic captive modules). Apart from these, there is an inquiry for ~2 GW with commitment of ~400 MW this financial year and balance next year, plus many 5-50 MW domestic captive orders. Order book is a mixed client base with significant repeat business; FY26 had INR4,000 cr of audited inquiries at various stages.

   Follow-up. How is the EPC order book trending separately from module order book and what margin differential exists between the two? Also, why is FY27 utilization guidance more conservative at 55% on a larger 4 GW base vs ~70% in FY26 on 1.5 GW?

   Answer. EPC is not a major focus - targeted at INR100-150 cr primarily from C&I segment (1-5 MW and rooftop orders); EPC margin is ~10-12%. Solex does not want to be seen as competitor to its own customers. On utilization, FY27 base is 4 GW vs FY26's 1.5 GW; industry average utilization is ~50%; ALMM disruption made it a turbulent year; conservative assumption accounts for cell-supply dependency delays and grandfathered project confusion in May-July.

6. 6. Cell manufacturing execution risk

   Ashish Golechha, Bee Ventures LLP

   Question. Peers like Jupiter and Waaree are facing execution, availability and infrastructure issues with cell manufacturing. How is Solex approaching execution risk - water, power, manpower - and is the scope 2 GW or 5 GW?

   Answer, Dr. Chetan Shah, Chairman and Managing Director. Cell project is 5 GW executed in two phases (2.2 GW + 3 GW) at a single site. India's operational challenges are real - existing capacities are mostly Mono PERC with limited TOPCon lines; ~5 GW is proprietary HJT/Thin-Film. Infrastructure (water, power) takes time in Gujarat but consistency is strong once available. The bigger challenge is recipe-driven TOPCon cell operations. Solex is bringing an experienced TOPCon cell manufacturer on board for design, construction and operations (not just consultancy) to overcome the limitations observed in first-mover Indian players and replicate Chinese-level efficiency output.

7. 7. Grid stability and cell pricing dynamics

   Krunal Patel, Individual Investor

   Question. Some IPPs are waiting for DISCOM approvals because grid stability isn't ready - is this real? And by end of FY27 India's TOPCon cell capacity will be 70-80 GW; will the price be equivalent to imported Chinese cells for existing module manufacturers?

   Answer, Dr. Chetan Shah, Chairman and Managing Director. In Gujarat yes - generation is concentrated, load curtailment and connectivity challenges are real but temporary; National Green Grid (Khavda and others) plus BESS roll-out will change the situation. India went from 25 GW solar in FY25 to ~50 GW in FY26, creating concentrated western India stress that other states and grids are now addressing. On cell pricing, domestic cells will be priced higher than imports today; tenders already bid with domestic cells carry higher prices. Once ALMM-style restrictions prevent imports, cell pricing will be uniform across the market, not impacting any single module manufacturer differentially.

   Follow-up. With BESS project cost being higher, will green ammonia become an option in near future for excess daytime solar power?

   Answer. Ammonia and hydrogen are catching up but complex to manufacture - commercial viability matters in India. BESS is established and commercially viable so India will move fast on BESS first, followed by other renewables. Solar has a very bright long-term future. There will be a constant repowering opportunity as old Mono PERC modules are replaced with new TOPCon in both India and overseas.

8. 8. Distribution and go-to-market strategy

   Jitendra Rathod, Unknown

   Question. What is the distribution strength and go-to-market strategy - any plans to build it?

   Answer, Dr. Chetan Shah, Chairman and Managing Director. Solex focuses on IPP business - large-scale power producers where sales team interacts directly without channel intermediaries. Second largest is C&I segment (captive utility-scale and large rooftop) also direct sales. Distribution channel is not developed because retail residential rooftop is not a focus area. No aggressive plan to build distribution in the near future since focus is IPP and utility-scale; once cell line is operational and based on that, post-2028 management will reconsider distribution strategy.

Topic by topic, in the order it was spoken

In their words