Alpex Solar Q3 FY26 earnings call

Alpex Solar achieved a record-breaking Q3 FY26 with a turnover of ₹648 crores, representing a significant 246% year-on-year growth compared to ₹187 crores in Q3 FY25. Profit After Tax (PAT) also reached an all-time high of ₹54 crores, up 134.7% from ₹23 crores in the same period last year. For the nine months ending December 31, 2025, the company reported a turnover of ₹1,551 crores and a PAT of ₹148 crores, both more than tripling their respective figures from the previous year. Despite this strong growth, EBITDA margin slightly declined to 14.03% and net margin to 8.37% in Q3 FY26, attributed to higher input costs and stagnant realizations at the time.

The company is undertaking a massive expansion to become a fully integrated player in the solar value chain, aligning with India's Atmanirbhar Mission. By the end of FY27, Alpex Solar aims to achieve 3.6 gigawatts of solar module manufacturing capacity, 2.2 gigawatts of solar cell capacity, and 12,000 tons of aluminum frame capacity. Additionally, plans include developing 115 megawatts of EPC business and 100 megawatts of independent power plants. This strategic expansion is expected to solidify the company's position as a leading domestic manufacturer.

A key component of the expansion is the establishment of a 2.2 gigawatt Topcon G12R cell line, which is nearing completion. The total project cost for this state-of-the-art facility is ₹825 crores, with a hard cost component of ₹750 crores. Management is highly confident in achieving 90-95% capacity utilization within 45 days of the line becoming operational. This backward integration into cell manufacturing is anticipated to significantly boost overall profitability, as cell production is expected to yield PAT margins of 25-26%.

Alpex Solar was a pioneer in establishing aluminum frame production, a move that has proven strategically beneficial. This segment currently operates at a high utilization rate of over 75-80% and contributes positively to the company's EBITDA. The in-house manufacturing of aluminum frames provides flexibility, as many frames are custom-made, and helps mitigate non-tariff barriers. The company plans further expansion in this segment due to its strong performance and strategic importance.

The company maintains a robust order book of ₹1,900 crores, which is expected to be executed within the next six to seven months, providing strong short-term revenue visibility. Alpex Solar adopts a cautious approach to order booking, preferring smaller orders ranging from ₹200-300 crores over very large contracts (e.g., ₹800 crores). This strategy allows for greater flexibility in pricing and adaptation to changing market conditions, minimizing risks associated with unforeseen circumstances in long-duration projects.

Despite a slight margin compression in Q3 FY26 due to input costs, management projects rapid EBITDA margin expansion once the cell manufacturing unit becomes operational. The company's advanced cell technology is designed for lower silver consumption, and plans are underway to explore copper-based cells, further insulating against raw material price volatility. The blended per watt price realization is expected to improve to ₹18.5-19, with the non-DCR segment anticipated to cross ₹16 very soon, contributing to overall margin improvement.

The ₹825 crore CAPEX for the 2.2 GW cell line is being funded through a combination of ₹400 crores from term loans/debt and ₹425 crores from internal accruals. The company recently raised ₹125 crores via non-DCR debentures, acknowledging the 'slightly expensive' nature of this funding. This decision was driven by the conservative and slow approach of traditional banks in providing limits for the company's rapid expansion. Management emphasized that healthy internal accruals will cover most funding needs, with no plans for further capital market fundraising.