Australian Prem — Q3 FY25 earnings call

Call held 21 Feb 2025

Management summary

Australian Premium Solar (APS) held its Q3 FY25 earnings call, focusing on robust future growth plans rather than specific quarterly financials. The company is aggressively expanding its Topcon solar panel manufacturing capacity by 800 MW, with the first phase due by June 2025, to meet surging domestic demand. Management guided for a 70-75% CAGR revenue growth and 11-14% operating margins over the next 2-3 years, emphasizing strong working capital management and a strategic focus on internal business diversification before considering exports.

Highlights

  • Strong demand for Indian-made solar panels across ground mounting, residential rooftop, and solar pump segments.

  • Expansion into new territories (Rajasthan, Maharashtra, Himachal Pradesh, Jharkhand, MP, Tripura) beyond Gujarat.

  • Wholesale business profitability increased to 6%, and distribution to 10% due to high demand.

  • New machinery for capacity expansion will be fully automatic with AI for quality checking.

  • Maintaining a zero-credit policy for distributors, indicating strong working capital management.

Concerns

  • No specific Q3 FY25 financial results (revenue, EBITDA, PAT) were disclosed in the transcript.

  • No short-term plans for export (next 9-12 months) due to high domestic demand and expansion focus.

  • Solar cell production bottleneck in India necessitates cash payments for raw materials, impacting working capital.

What they filed

Q4 FY26: revenue up 234.7%, net profit up 163.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY24Q1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q4 FY26
Revenue75 82 164 121 275 +267%152 +85%302 +84%405 +235%
EBITDA5 10 19 16 38 +660%21 +110%43 +126%52 +225%
Net profit6 7 13 11 27 +350%14 +100%29 +123%29 +164%
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.

Order book

low confidence
Management indicated strong demand, stating they cannot fulfill all orders and have no short-term export plans due to high domestic demand and expansion focus.

Source: Q&A

Capital allocation

high confidence
  • Capex Capex disclosed bank loan for this expansion
    • 800-megawatt Topcon capacity expansion (buildings/utility) $3 Mn
    • 800-megawatt Topcon capacity expansion (machinery) $4.5 Mn
    • Working capital for 800 MW capacity ₹80 Cr
    800 megawatt including machinery, working capital et cetera, I would say like called machinery, say for building and utility, we need I will just give three breakups separately, so it gives you more idea. For buildings, we are looking somewhere it's not somewhere, it's $3 million including utility and everything. For machinery, it's close to $4.5 million and remaining will be working capital. And we have depended on the bank loan for this expansion.
  • Debt Debt disclosed
    Right now, if you can see the debt is very low on our side, we just take whatever points or whatever we take it, it is in non-banking, non-fund based loan or something like that, like on the bank guarantee like LTO or something like that. But we have never utilized cash credit or overdraft facility or nothing like that.

Guidance & targets

Revenue

  • Revenue Growth Revenue · next two to three years · High confidence CAGR 70% to 75%
    In over next two to three years, we are expecting revenue growth around CAGR 70% to 75% and our operating margin between 11% to 14%.

    — Nikunjkumar Patel

Margin

  • Operating Margin Margin · next two to three years · High confidence 11% to 14%
    In over next two to three years, we are expecting revenue growth around CAGR 70% to 75% and our operating margin between 11% to 14%.

    — Nikunjkumar Patel

Capacity

  • Topcon Capacity Expansion (First Phase) Capacity · by 30 June 2025 · High confidence additional 400 megawatt
    The first page of additional 400 megawatt will be up and running by 30 June 2025.

    — Nikunjkumar Patel

  • Topcon Capacity Expansion (Second Phase) Capacity · within 12 months · High confidence additional 400 megawatt
    The second phase we are expecting to start within 12 months.

    — Nikunjkumar Patel

Capacity Utilization

  • Revenue from 280 MW capacity Capacity Utilization · in a year · High confidence 450 crores turnover
    So, 280 megawatts based on current scenario, we can expect 450 crores turnover in a year.

    — Nikunjkumar Patel

  • Ramp-up time for additional 200 MW Capacity Utilization · maximum · High confidence 4 months
    So, between four once machine is set up, you can maximum, say, 4 months.

    — Nikunjkumar Patel

Working Capital

  • Working Capital Requirement for 800 MW capacity Working Capital · High confidence 80 crores
    INR 17 into INR 800 is roughly INR 600 divided by 10. So, it's INR 62, this question was already there and we said it's almost INR 80 crores requirement will be for working capital.

    — Nikunjkumar Patel

Business Mix

  • Internal Business Share Business Mix · in future · Medium confidence 60% to 70%
    As a APS, our plan is 60% to 70% business should be internal even in future.

    — Nikunjkumar Patel

What to watch in Q4 FY25

First phase of Topcon capacity operational

by June 30, 2025
Current Under construction/installation
Target 400 MW capacity up and running

Why it matters

Crucial for meeting demand and achieving revenue growth targets.

The first page of additional 400 megawatt will be up and running by 30 June 2025.

Risks & concerns

  • Competition and commodity nature of modules

    medium

    Analyst raised concern about modules becoming a commodity and the need for credit, but management highlighted their diversified business model and brand presence.

    Analyst acknowledged

  • Solar cell production bottleneck in India

    medium

    Management stated that the bottleneck in solar cell production in India necessitates cash payments for raw materials, which impacts working capital.

    Management acknowledged

Q&A highlights

6 direct
Sustainability of revenue growth and market demand Direct
Currently, we are making mono part, Topcon solar panel manufacturing and also, we are in EPC, distribution and solar part business. This quarter, we have added new territories and strengthened our existing market position. Currently, we are working in Gujarat, Maharashtra, Rajasthan, also in Himachal Pradesh, Jharkhand, MP and Tripura.

Management detailed the multiple demand drivers (ground mounting, residential rooftop, solar pump) and geographic expansion supporting future growth.

Asked by Amit Agicha

Capacity utilization and profitability Direct
So, 280 megawatts based on current scenario, we can expect 450 crores turnover in a year. So how you figure out we are on 40%, 50% capacity? How you can figure it out, we are using 40% or 50% capacity?

Clarified current capacity utilization and its revenue potential, indicating significant headroom for growth with new capacity.

Asked by Amit Agicha

Export strategy and timeline Direct
So maybe next 9 months to 12 months, we don't have any short-term plan for export at the moment because even including our coming facility, we will first expand overall India and then we will start looking overseas expansion.

Provided clear guidance on the company's immediate focus on domestic market expansion over exports, indicating strong local demand.

Asked by Amit Agicha

Cost and pricing of DCR vs non-DCR modules Direct
So, in non DCR price range is INR 13.5 to INR 14.5, like we said earlier INR 12. Now currently, it's running around INR 13.5 to INR 14.5. And DCR is running between INR 22.5 to INR 23.75, depending on order size, depending on the efficiency.

Provided specific pricing ranges for different module types, crucial for understanding revenue potential and margin drivers.

Asked by Raman K V

Cost of 800 MW capacity expansion compared to peers Partial
I'm not sure. They may be considering working capital and because what we are doing is we have a land and building available existing to our own facility. So that maybe save some cost. I'm not sure how they come up with INR 300 hundred, INR 400 crore.

Addressed analyst's concern about the low cost of expansion by highlighting existing infrastructure leverage, but did not fully reconcile the difference with peer costs.

Asked by Bhuvan

Working capital management with increased capacity Direct
Now as Nikunj said that the demand is tight, I mean, for the next I think what we can see about next 3 to 5 quarters, we don't see any demand will go down or something like that. And right now, as Nikunj bhai said a little earlier, that right now we have to say no to the orders. So, for the 3 to 5 quarters, yes. But with our new capacity that is going to come post June 2025, obviously, that will be we will require some more working capital because of our turnover we are planning to increase if I probably say 75% as everybody knows.

Management confirmed the need for more working capital with new capacity but expressed confidence in managing it, potentially through bank loans, without extending credit to distributors for the next 3-5 quarters.

Asked by Sahil Jain

Plans for battery storage solutions Partial
It's a bit early to say because currently, our main focus is to get this 800-megawatt Topcon facility up and running. And we are expecting another Q3 to Q5 good day, not Q3 to Q5, even if we get good two quarters, then definitely and by that time, we will know the overall government policy as well, because currently some tenders are coming, some tenders are not

Indicated future interest in battery storage but prioritized current capacity expansion, linking future investment to government policy and secured business.

Asked by Amit Agicha

Working capital requirement for 800 MW capacity Direct
Okay. As we discussed earlier, whatever will be, say, in 800 megawatt and with existing 400 megawatt, it will be 1.2 gigawatt. If we say 70% of this, which is 800-megawatt module manufacturing capacity, at the existing rate, if we divide between non-DCR and DCR equally, say between INR 12 to INR 25, so it will be INR 17. INR 17 into INR 800 is roughly INR 600 divided by 10. So, it's INR 62, this question was already there and we said it's almost INR 80 crores requirement will be for working capital.

Provided a detailed breakdown of how the working capital requirement of ₹80 crores was calculated for the expanded capacity, linking it to projected revenue.

Asked by Bhuvan

2 min read 5 chapters

Detailed narrative

Strategic Expansion and Capacity Build-Out

Australian Premium Solar is significantly expanding its Topcon solar panel manufacturing capacity by 800 megawatts. The first phase, comprising 400 megawatts, is slated to be operational by June 30, 2025, with the second phase expected within 12 months thereafter. This expansion is critical to meet the robust demand from various segments, including ground mounting projects, residential rooftop installations under government schemes, and solar pumps. The total cost for this 800 MW expansion is estimated at approximately $8 million (₹65-70 crores), which will be funded through a bank loan.

Revenue and Margin Outlook

Management provided strong guidance, projecting a Compound Annual Growth Rate (CAGR) of 70-75% for revenue over the next two to three years. Concurrently, the operating margin is expected to be in the range of 11-14%. The company noted an increase in wholesale business profitability to 6% and distribution business profitability to 10%, attributing this to high demand that currently exceeds their fulfillment capacity. The existing 280 MW manufacturing capacity is capable of generating ₹450 crores in annual turnover, highlighting the significant revenue potential from the expanded capacity.

Market Focus and Geographic Diversification

APS is strategically focused on expanding its domestic market presence. While previously concentrated in Gujarat, the company has now extended its operations to Rajasthan, Maharashtra, Himachal Pradesh, Jharkhand, MP, and Tripura. The immediate strategy prioritizes wholesale distribution, retail distribution, and solar pump tendering, followed by project supply, before considering exports. Management explicitly stated no short-term export plans for the next 9-12 months due to strong domestic demand and the ongoing capacity expansion.

Working Capital Management and Pricing Dynamics

The company maintains a disciplined approach to working capital, currently operating with very low debt and without utilizing cash credit or overdraft facilities. For its distribution model, APS generally offers zero credit, with residential rooftop sales having a 4-week cycle and solar pump sales (government-backed) taking 6-10 weeks. The working capital requirement for the expanded 800 MW capacity is estimated at ₹80 crores, calculated based on a projected ₹600 crores revenue from this capacity. Pricing for non-DCR modules ranges from ₹13.5-14.5 per watt, while DCR modules are priced higher at ₹22.5-23.75 per watt, with Topcon variants adding ₹1-2 per watt.

Future Plans: Battery Storage Solutions and Backward Integration

APS is exploring opportunities in battery storage solutions, noting the increasing demand for midsize batteries (1-2 MW) and emerging tenders in India. An investment of approximately $10 million would be required for such a venture. However, management indicated that this is a longer-term plan, with the immediate focus on stabilizing the 800 MW Topcon facility and awaiting clarity on government policies and secured business. The company also hinted at potential backward integration into solar cell manufacturing, stating it is 'the way to go' for APS, with more details to be revealed soon.

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