Detailed Narrative
FY26 Financial Performance Overview
Solarium Green Energy reported a strong financial performance for FY26, with total income growing 60% year-on-year to ₹368 crores, up from ₹230 crores in FY25. This growth translated into a 3-year revenue CAGR of 55% since FY23. EBITDA for the year increased by approximately 31% to ₹35.3 crores, achieving an EBITDA margin of 9.6%. However, gross margins compressed to 30% in FY26 from 34.5% in FY25, primarily due to a strategic shift towards lower-margin large EPC projects. Despite this, PAT marginally increased to ₹20.5 crores from ₹18.6 crores in FY25, representing a PAT margin of 5.6%.
Commissioning of 1.2 GW Manufacturing Facility
A significant development in FY26 was the commissioning of the company's 1.2 GW fully automated module manufacturing facility in Ahmedabad in mid-March. The facility is designed to produce 4000 panels per day, achieving up to 23.5% cell efficiency and capable of manufacturing G12 panels up to 725 watts peak. Currently, the facility operates at approximately 45% utilization, with a strategic target to utilize 50-60% of its production for captive consumption within the company's own EPC projects and solar kit segment.
Strategic Shift to Large Ground-Mounted EPC Projects
The company consciously added large ground-mounted EPC projects to its portfolio, exemplified by securing a 50 MW AC project in Maharashtra valued at over ₹185 crores. This strategic decision aims to reduce exposure to the extended receivable cycles typically associated with government-distributed programs. Management noted that concentrated large EPC projects are more manageable than numerous smaller, distributed sites, leading to better control over cash conversion and allowing for operations at a larger scale with significantly reduced working capital requirements.
Revamping Residential and Distribution Business
Solarium Green launched solar kits for the residential market, significantly expanding its distribution network. The Sarathi partner network now spans over 450 partners across more than 25 cities, positioning the company as the second largest among 20,000+ vendors under the PM Surya Ghar Scheme. This initiative leverages the company's own branded modules and components, creating a low-operating-cost model that simplifies procurement and customization for local EPC players, with plans to launch kits in multiple states soon.
Impact of ALMM-2 and Regulatory Environment
The regulatory environment, particularly the progression of ALMM-2 requirements, introduced near-term considerations, causing a temporary reduction in manufacturing utilization in the last 10 days of the reporting period. However, management expressed confidence that their manufacturing scale positions them well for the industry's transition towards greater domestic content, with an estimated 30 GW of overall cell manufacturing capacity in India expected to ensure sufficient supply within 6-8 months.
Increased Finance Costs and Working Capital Management
Finance costs increased to ₹10.5 crores in FY26 from ₹3.5 crores in FY25, primarily due to borrowings for the ~₹90 crores CAPEX for the new manufacturing facility and ~₹100 crores for working capital. Management expects these finance costs to stabilize and progressively reduce as a proportion of revenue as manufacturing operations ramp up. The company's total assets expanded to ₹459 crores from ₹234 crores in FY25, with healthy cash and bank balances of ₹90.4 crores providing sufficient liquidity for ongoing operations.