Solarium Green — Q2 FY26 earnings call

Call held 17 Nov 2025

Management summary

Solarium Green Energy reported strong H1 FY26 results with significant revenue and margin growth, driven by robust demand and strategic expansion. The company commissioned a new structure manufacturing facility and is progressing on a module manufacturing plant. However, elevated finance costs and stretched working capital due to delayed government receivables posed challenges, which management expects to resolve by year-end.

Highlights

  • Revenue increased by 43% YoY in H1 FY26, with gross margins rising by 65% and EBITDA improving by 36%, leading to a 22% expansion in PAT.

  • Commissioned a 1200 MTPA structure manufacturing facility in July 2025, expected to generate a 5% cost advantage.

  • Expanded residential footprint to 25 additional cities and onboarded 450 new channel partners through the Solarium Saarthi Initiative.

  • Maintained a robust unexecuted order book of INR 229 crores and a bidding pipeline exceeding INR 900 crores, providing clear growth visibility.

  • Anticipate accelerated solar adoption and enhanced market adaptability due to a reduction in GST rates on modules and inverters from 12.5% to 5%.

Concerns

  • Finance costs remained elevated due to increased working capital requirements, primarily driven by delayed government receivables from defense-linked projects (BSF and MES) amounting to INR 20-25 crores.

  • H1 FY26 revenue growth was moderated by prolonged monsoon conditions and demand/supply postponement caused by the rollout of GST 2.0 in September 2025.

  • Working capital appeared stretched due to the aforementioned delayed government receivables, though management expects to clear these by December 2025.

Key financials

  1. Revenue Growth 43%
  2. Gross Margins Growth 65%
  3. EBITDA Growth 36%
  4. PAT Growth 22%

What they filed

₹ Cr · quarterly
Line itemQ2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue82 148 117 251
EBITDA12 14 13 17
Net profit8 11 9 11
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Residential Projects
    32% Revenue Contribution
  • Government Projects
    36% Revenue Contribution
  • Distribution Sales
    70% Revenue Contribution

Order book

high confidence

Total value

₹229 Cr

as of 2025-09-30 quantified

Execution

Most of the unexecuted order book will be executed within this year (FY26), with the remainder by Q1 next year. L1 orders are expected to be executed within 9 to 12 months from the receipt of LOAs.

Pipeline

qualified rfp

Bidding pipeline

The company has a robust order book and pipeline, providing clear visibility for growth over the next several quarters, with no challenges foreseen in achieving growth targets.

Source: Prepared remarks

Capital allocation

medium confidence
  • Debt Debt disclosed
    Finance cost remains elevated due to increased working capital requirements, primarily driven by delayed government receivables, particularly in defense link projects. This has impacted short-term liquidity and contributed to higher interest expenses.
  • Liquidity Liquidity disclosed Working capital was stretched due to delayed government receivables, particularly from defense-linked projects (BSF and MES). The company received INR 20-25 crores between October and November and expects to clear the remaining by December. IPO proceeds are being used to create a credit history and buffer for future working capital needs, with INR 60-70 crores expected to be deployed in Q4 FY26 for the manufacturing plant.
    So almost like four months or five months, there was no one. And we now started receiving those money back from between August and September itself. We have received almost about INR20 crores -INR25 crores between October. And so, we expect to clear that off by December itself.

Guidance & targets

Capacity

  • Module Manufacturing Plant Commissioning Capacity · FY26 · High confidence mid-January
    Yes. So we are expecting to get it commissioned by mid-January

    — Ankit Garg

Profitability

  • Structure Manufacturing Cost Advantage Profitability · Ongoing · High confidence 5%
    So, with structure manufacturing, we are estimating a cost advantage of around 5%.

    — Ankit Garg

  • Structure Manufacturing EPC Margin Impact Profitability · Ongoing · High confidence 0.3%-0.5%
    We are seeing a cost benefit of about 4% to 5%, which actually entails margin benefit at an overall, only on the EPC segment part, to about 0.3% to 0.5%, effectively.

    — Himanshu Garg

  • Module Manufacturing Standalone EBITDA Margin Profitability · Ongoing · High confidence 12%-13%
    On the EBITDA level, if we see that plant standalone, that should be able to operate at 12% to 13% margin.

    — Himanshu Garg

  • Module Manufacturing Gross Margin Improvement (In-house Consumption) Profitability · Ongoing · High confidence 5%-7%
    So, we foresee 5%-7% of the improvement in the gross margins from the module manufacturing if anything gets consumed in-house.

    — Himanshu Garg

Revenue

  • Module Manufacturing Standalone Revenue (at 85% utilization) Revenue · Ongoing · High confidence INR 1,000 crores+
    So, as a standalone unit, plant will be able to generate anywhere about INR1,000 crores plus revenue, if we'll be able to operate it at 85%.

    — Himanshu Garg

  • Module Manufacturing Revenue Flow Revenue · Q4 FY26 · High confidence Start flowing in
    And to answer your specific question, we expect revenue to start flowing in from Q4.

    — Himanshu Garg

Capacity Utilization

  • Module Manufacturing Plant Utilization (Initial) Capacity Utilization · First couple of months · High confidence 40%-50%
    I think in the initial period, for about first couple of months, we expect the utilization should be anywhere about 40% to 50%

    — Himanshu Garg

  • Module Manufacturing Plant Utilization (Target) Capacity Utilization · By Q2 FY27 end · High confidence 75%-80%
    and slowly, gradually, over the next couple of quarters, it should reach anywhere between 75% to 80%. And the target for that is before Q2 end.

    — Himanshu Garg

Working Capital

  • Government Receivables Clearance Working Capital · By December 2025 · High confidence Cleared off
    And so, we expect to clear that off by December itself.

    — Himanshu Garg

  • Working Capital for Manufacturing Plant Working Capital · Q4 FY26 · High confidence INR 60-70 crores
    in Q4, we expect anywhere between INR60 crores to INR70 odd crores worth of working capital required for the operations, wherein we expect to use this.

    — Himanshu Garg

Employee Costs

  • Employee Cost Growth Employee Costs · H2 FY26 and FY27 · Medium confidence Stabilize/Efficiency
    we do not foresee any sort of increments, rather some sort of efficiency will start coming in into the employee cost.

    — Himanshu Garg

Finance Costs

  • Finance Cost Normalization Finance Costs · Q4 FY26 onwards · High confidence Normalized
    Q4 onwards, this will get normalized.

    — Himanshu Garg

Revenue Contribution

  • Government Revenue Contribution Revenue Contribution · Ongoing · Medium confidence Remain or increase
    So, we don't expect the contribution to go down. Either it will remain there or increase.

    — Himanshu Garg

Supplier Agreements

  • Long-term Agreements with Suppliers Supplier Agreements · By end of Q4 FY26 · High confidence Achieved
    what we foresee is by the end of Q4, we'll have long-term agreements with most of our suppliers with the cost being left, again, because of the volatility we have experienced.

    — Himanshu Garg

What to watch in Q3 FY26

Module Manufacturing Plant Commissioning

next quarter
Current Expected by mid-January 2026
Target Commercial operations commenced

Why it matters

Crucial for backward integration, cost advantages, and new revenue streams.

Yes. So we are expecting to get it commissioned by mid-January

Risks & concerns

  • Delayed government receivables from defense projects

    medium

    Delayed receivables from BSF and MES due to Operation Sindoor (India-Pakistan war) impacted working capital and elevated finance costs in H1 FY26, though INR 20-25 crores have been received and the rest expected by December.

    Management acknowledged

  • Volatility in module pricing and raw material costs

    medium

    The solar industry has historically experienced volatility in module pricing and raw material costs, which could impact margins, though management notes demand remains strong and raw material prices are currently trending down.

    Management acknowledged

  • Revenue growth moderation due to monsoon and GST 2.0 rollout

    low

    Prolonged monsoon conditions and demand/supply postponement due to GST 2.0 implementation in September 2025 temporarily moderated H1 FY26 revenue growth.

    Management acknowledged

Q&A highlights

8 direct
Module manufacturing plant commissioning and future plans for cell manufacturing Direct
Yes. So we are expecting to get it commissioned by mid-January... on a short-term basis, we are planning to first get our plant commissioned by January and then we will update on the cell manufacturing part.

Clarifies the timeline for the new module manufacturing plant and the company's phased approach to backward integration, which is a key strategic move.

Asked by Maitri Shah

Working capital stretch and delayed government receivables Direct
delays more specifically in the trade receivables from the government-linked projects. And within the government-linked projects also it was a delay from a defense-linked project specifically... BSF and MES... stuck from somewhere about May to almost like August because of Operation Sindoor.

Identifies the specific cause of working capital issues (defense projects affected by geopolitical events) and provides a timeline for resolution, impacting liquidity and finance costs.

Asked by Ansh Singh

Impact of new manufacturing facilities on margins Direct
with structure manufacturing, we are estimating a cost advantage of around 5%... module constitute almost like 50% of the overall Solar plant and will be able to add anywhere between 10%-12% of the margins at a EBITDA level right. So, we foresee 5%-7% of the improvement in the gross margins from the module manufacturing if anything gets consumed in-house.

Quantifies the expected margin benefits from both structure and module manufacturing, providing insight into future profitability drivers.

Asked by Maitri Shah

Competitive intensity and strategy in the rooftop solar market Direct
most of the bigger players don't want to get into this very, very execution-heavy business... nobody is doing the rooftop, including Tata. So, they are only supplying the products. Nobody is there in terms of executing. ...for us, the main part of the business is to execute.

Highlights Solarium's differentiated strategy in the highly unorganized rooftop solar market, focusing on end-to-end execution rather than just product supply, which is a key competitive advantage.

Asked by Vinay Lakhera

Utilization of IPO proceeds for working capital Direct
more to create a credit history. We have been able to secure a decent level of credit lines from our lenders. So that is the major reason we have not used, honestly. And plus there is no additional cost on the company for using those additional credit lines.

Explains the strategic use of IPO proceeds to build credit history and maintain financial flexibility, rather than immediate deployment for working capital, which impacts the balance sheet.

Asked by Shruti Malpani

Normalization of finance costs Direct
Q4 onwards, this will get normalized. But we also are going to experience a significant growth Q4 onwards. So, at an overall level, maybe in absolute terms, it will remain at the similar level, but with quite a higher portion of the business coming in.

Provides a clear timeline for the expected normalization of finance costs, which has been a concern due to working capital issues.

Asked by Maitri Shah

Company's strategy regarding BESS (Battery Energy Storage Systems) Direct
already done energy storage contracts and quite difficult ones... continue to bid for those projects... manufacturing side of BESS, the answer is no at this point in time because our focus is to get vertically integrated in the direction we are moving at this point in time.

Clarifies the company's approach to BESS, indicating a focus on EPC projects rather than manufacturing, aligning with its core vertical integration strategy in solar.

Asked by Maitri Shah

Agreements with Chinese suppliers for cells for module manufacturing Direct
once our factory goes live, those relationships will automatically get into the long-term agreements. At this point in time when we are talking, obviously, because we do not want to kind of bind ourselves and there are multiple manufacturers supplying those cells. ...by the end of Q4, we'll have long-term agreements with most of our suppliers.

Details the company's strategy for securing raw materials for its new module manufacturing plant, indicating a shift to long-term agreements by Q4 FY26 to manage supply and cost volatility.

Asked by Shruti Malpani

2 min read 5 chapters

Detailed narrative

H1 FY26 Financial Performance and Market Conditions

Solarium Green Energy Limited reported robust H1 FY26 results, with revenue increasing by 43% year-on-year, gross margins rising by 65%, EBITDA improving by 36%, and Profit After Tax expanding by 22%. This growth was achieved despite moderation caused by prolonged monsoon conditions and demand/supply postponement due to the GST 2.0 rollout in September 2025. The company noted healthy demand and increased traction for solar installations, anticipating further acceleration from the reduction in GST rates on modules and inverters from 12.5% to 5%.

Operational Milestones: Manufacturing and Digital Initiatives

The company achieved a significant operational milestone by commissioning its 1200 MTPA structure manufacturing facility in July 2025, which is expected to generate an estimated 5% cost advantage. The next major milestone is the commissioning of a 1000 MW automated solar module manufacturing plant in Ahmedabad, anticipated by mid-January 2026. Solarium is also investing in digital initiatives, including a B2C application designed to enhance user experience and streamline order tracking and payment functionalities for residential segments.

Order Book and Future Visibility

Solarium maintains a strong order book with INR 229 crores in unexecuted orders and INR 209 crores in L1 orders. The bidding pipeline stands at over INR 900 crores, providing clear growth visibility for the coming quarters. Management expects most of the unexecuted order book to be completed by Q1 FY27, with L1 orders typically executed within 9 to 12 months post Letter of Award (LOA). The company's win ratio for orders up to INR 100 crores is approximately 25-30%.

Working Capital and Finance Cost Challenges

Finance costs remained elevated in H1 FY26 due to increased working capital requirements, primarily stemming from delayed government receivables. Specifically, INR 20-25 crores from defense-linked projects (BSF and MES) were stuck between May and August due to 'Operation Sindoor' related to the India-Pakistan war. Management expects to clear these outstanding receivables by December 2025, leading to a normalization of finance costs from Q4 FY26 onwards. IPO proceeds are being strategically used to build credit history and create a buffer for future working capital needs, with INR 60-70 crores earmarked for the manufacturing plant in Q4 FY26.

Strategic Approach to Competitive Landscape

In the highly unorganized rooftop solar market, where 96-97% of the business is unorganized, Solarium differentiates itself by offering an end-to-end solution and focusing on execution, unlike larger players (e.g., Tata, Adani, Waaree) who primarily supply products. The company's new module manufacturing plant will utilize TOPCon technology, capable of handling both DCR and non-DCR cells, ensuring future readiness. While module pricing volatility is acknowledged, strong demand and raw material price trends are expected to support margins.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Construction earnings calls