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    Alpex Solar

    ALPEXSOLAR
    Capital Goods·4 Nov 2025
    Management Summary

    Alpex Solar reported strong Q2 and H1 FY26 performance, with significant business volume growth and healthy monthly EBITDA. The company is aggressively expanding its solar cell and module manufacturing capacities, aiming for 2x revenue growth and improved EBITDA margins in FY27. While operating cash flow was negative due to expansion-related working capital, management expressed comfort with liquidity and a robust order book.

    Highlights

    6

    • Company reported 'fantastic numbers' and 'surpassed FY'25 in our first half itself'.

    • Business volume grew significantly by 270-300% in H1 FY26.

    • EBITDA is almost ₹25 crores per month, indicating strong profitability.

    • Current order book of ₹1600-1700 crores provides strong revenue visibility.

    • Aggressive capacity expansion plans for 2.2 GW solar cell line and 3.6 GW module capacity are on track, funded by internal accruals.

    • Strategic move to G12R cells directly, bypassing mono-PERC, expected to yield 2% higher PAT margins and first-mover advantage.

    Concerns

    2

    • Operating cash flow turned negative in H1 FY26 due to higher inventories and receivables, though management states liquidity is comfortable.

    • Analyst noted OPM at 16% compared to peers at 20-30%, though management stated their margins are in line or slightly better than industry average.

    What Changed2

    vs Q3 FY26

    Guidance items11 → 14 (+3)Risks discussed3 → 4 (+1)
    Key financials

    Metrics

    5

    Periods

    2

    Headline

    4
    • Business Volume Growth
      2.7 x
    • EBITDA (monthly)
      ₹25 Cr
    • Module Average Realization
      17.5 approx
    • Current Working Capital Limit
      ₹115 Cr

    H1 FY26

    1
    • EPC Revenue Share
      4%

    Order Book

    medium confidence

    Total Value

    ₹ 1,600 crores

    as of 2025-11-04

    range

    Composition

    DCR cells(product)

    "Order book is strong and expected to strengthen further, with new orders to be announced soon."

    Source:
    Q&A

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    entirely through internal accruals, with potential small loan of Rs. 40-50 crores if needed

    Liquidity

    Liquidity disclosed

    Company is comfortable with liquidity despite negative operating cash flow due to increased working capital borrowing for expansion.

    Guidance & targets

    14
    CategoryTargetPriority
    Revenue
    FY26 Revenue
    Exceed ₹1500 crores
    		High
    Revenue
    FY27 Revenue Growth
    2x
    		High
    Revenue
    EPC Revenue Share
    10-14%
    		High
    Margin
    EBITDA Margin
    29-30%
    		High
    Margin
    PAT Margin (from TOPCon)
    2% more profit
    		High
    Margin
    PAT Margin
    16-17% or higher
    		Medium
    Capacity
    Solar Cell Production Start
    Q1 FY27 (conservative) / End of Feb-March 2026 (actual)
    		High
    Capacity
    1.4 GW Cell Capacity Operational
    10-11 months of revenue in next financial year
    		High
    Capacity
    1.2 GW Module Capacity Operational
    15th to 20th of December
    		High
    Capacity
    Total Module Capacity
    3.6 GW
    		High
    Capacity
    Long-term Module Capacity
    15 GW
    		Medium
    Capacity
    Full 3.6 GW Module Capacity Availability
    Next year, around August
    		High
    Debt
    Peak Debt
    ₹325-340 crores
    		High
    Working Capital
    Working Capital Performance
    ₹300 crores
    		High

    Solar Cell Production Start

    Q1 FY27
    CurrentExpected Q1 FY27 (conservative) / End of Feb-March 2026 (actual)
    TargetCommercial production of first cells

    Why it matters

    Verification of the start of cell manufacturing, a key backward integration step for margin improvement.

    Our first cell would be produced sometime in the month of February end or the beginning of March. But to be on the safer side, we have notified the exchanges that our production will start from the first quarter of next year.

    How to verify

    guidance_and_targets[metric='Solar Cell Production Start']

    Risks & concerns

    4
    RiskSeverity

    Rapid capacity expansion by other players leading to potential margin pressure

    Management believes their knowledge, understanding, and strategic backward integration will insulate them from non-serious players. — Analyst acknowledged

    medium

    Overcapacity in cell and module market by FY28

    Management states vertical integration and ALMM List 2 implementation will protect their position and demand for local cells. — Analyst acknowledged

    medium

    Negative operating cash flow in H1 FY26

    Attributed to increased inventories and receivables due to major expansion; liquidity is comfortable through working capital borrowing. — Analyst downplayed

    low

    PLI scheme's effectiveness for backward integration (ingots/wafers)

    Management views PLI as a 'failure' for highly capital-intensive businesses like ingots/wafers, preferring policy support for imports/competitors as a bigger trigger. — Management acknowledged

    medium

    Q&A highlights

    8

    “The thing is, yes, the people are expanding the capacities and there is a lot of me-too kind of phenomena is happening. Many people are not from the industry without solid backgrounds or solid knowledge base. So, they are coming up with these projects and because the valuations in the stock exchange are reasonably good, I would say. And that is attracting many, once again, not to go against anyone, but yes, non-serious kind of people are trying to join the bandwagon.”

    Addresses competitive landscape and management's strategy to differentiate through knowledge and backward integration.

    asked by Raj Saraf

    2 min read6 chapters

    Detailed Narrative

    01

    Strong H1 FY26 Performance and Growth Trajectory

    Alpex Solar reported 'fantastic numbers' for Q2 and H1 FY26, having surpassed its FY25 performance in the first half itself. The company's business volume grew significantly, by an estimated 270-300%. Management expressed confidence in maintaining this growth trajectory, with an EBITDA of approximately ₹25 crores per month. The company aims to exceed its FY26 revenue guidance of ₹1500 crores by a reasonable margin and projects 2x revenue growth for FY27.

    02

    Aggressive Capacity Expansion and Backward Integration

    The company is rapidly executing its capacity expansion and backward integration initiatives. This includes setting up a 2.2-gigawatt solar cell line and an aluminum plant. Additionally, 1.2 gigawatts of module capacity is expected to be operational by December 2025, with another 1.2 gigawatts coming online in the next financial year. By the end of the next financial year, Alpex Solar expects to have a total of 3.6 gigawatts of module capacity and 2.2 gigawatts of cell capacity fully available.

    03

    Strategic Shift to G12R TOPCon Cells and Margin Improvement

    Alpex Solar is strategically moving directly to G12R TOPCon cells, bypassing mono-PERC technology. This move is expected to provide a first-mover advantage and improve PAT margins by approximately 2% compared to mono-PERC. The first cells are anticipated to be produced by late February or early March 2026, with conservative guidance for Q1 FY27. This shift is also expected to save two months of factory shutdown time, which would have cost ₹50-60 crores in lost profit.

    04

    Order Book and EPC Segment Outlook

    The company's current order book stands at ₹1600-1700 crores, with ₹1800 crores of orders announced in the first six months of the year. This includes DCR (Domestic Content Requirement) orders, such as a contract with Tata for DCR cells. The EPC segment, which contributed 4-5% to total revenue in H1 FY26, is expected to normalize to 10-14% on a whole-year basis, with main targets typically achieved in the second half of the year.

    05

    Financial Health and Capital Allocation

    Alpex Solar's capacity expansion is primarily funded through internal accruals, with monthly EBITDA of ₹25 crores. While operating cash flow turned negative in H1 FY26 due to increased inventories and receivables from expansion, management stated that liquidity is comfortable, supported by working capital borrowing. The company projects a peak debt of ₹325-340 crores post-CAPEX by FY27 and estimates working capital performance of ₹300 crores for the next year.

    06

    Market Dynamics and Competitive Positioning

    Management acknowledged the rapid capacity expansion by other players but emphasized Alpex's deep industry knowledge and strategic integration. They believe the implementation of ALMM List 2 from June 2026 will compel module manufacturers to source local cells, benefiting integrated players like Alpex. The company also indicated a long-term module capacity target of 15 gigawatts by 2031, reflecting its ambitious growth plans.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.