Detailed Narrative
Strong Financial Performance in FY25 and Q4 FY25
Alpex Solar reported a robust financial year, with FY25 revenue nearly doubling to ₹780 crores from ₹400 crores in FY24, marking a 95% YoY growth. EBITDA for FY25 surged by 236.8% to ₹128 crores, with the EBITDA margin expanding significantly from 9.4% to 16.4%. Q4 FY25 also demonstrated strong performance, with revenue growing 172.5% YoY to ₹327 crores and PAT increasing by 461.3% YoY to ₹35.31 crores. While Q4 FY25 saw a slight sequential dip in EBITDA margin from 19.9% in Q3 FY25 to 16.7%, management attributed this to industry growth and seasonal factors, expressing confidence in future margin expansion.
Aggressive Capacity Expansion and Backward Integration
The company is undertaking significant capacity expansion, aiming to increase module manufacturing capacity from 1.2 GW to 2.4 GW by the end of FY26. A new cell manufacturing line with a capacity of 1.6 GW is also being established, with the first phase of 500 MW expected to commence commercial production before March FY26. This backward integration is anticipated to enhance profitability, as cell manufacturing typically offers higher margins. The total CAPEX for these expansions is projected at ₹642 crores, with ₹400 crores planned for FY26 and the remaining ₹242 crores for FY27.
Robust Order Book and Growth Outlook
Alpex Solar has secured a strong order book of ₹1,400 crores for the current year, including a ₹349 crore EPC order from Coal India and ₹758 crores from the private sector. Management expects this order book to be executed within FY26. The company also highlighted its wholly-owned subsidiary, Alpex Green Energies Private Limited, which will focus on EPC and IPP businesses, and has already acquired Chandra Energy and SPV for IPP efforts. This diversified approach, coupled with an internal target of at least 100% revenue growth, signals a positive outlook for the coming year.
Capital Allocation and Funding Strategy
The ₹642 crore CAPEX plan will be funded through a mix of internal accruals, equity, and debt. Management emphasized a conservative approach to debt, noting that current long-term debt is minimal (₹10-15 crores) and working capital limits (₹130 crores, including ₹55 crores non-fund based) are sufficient and can be expanded without turbulence. This strategy aims to support aggressive growth while maintaining a healthy balance sheet. The company also mentioned a second subsidiary, Alpex GH2, focusing on green hydrogen R&D, which will initially involve small CAPEX funded separately.
Market Position and Regulatory Tailwinds
Alpex Solar positions itself as a dependable company with 18 years of experience, leveraging its expertise in a rapidly growing solar market. The company benefits from favorable government policies, including the ALMM requirement which mandates modules made in India for installations and bans imports. Management noted that while exports to the USA were considered, the domestic market currently offers better margins and swifter realization. However, with expanded capacity, the company plans to dedicate some capacity to exports, particularly to USA customers.