Detailed Narrative
Strong H1 FY26 Financial Performance
Ganesh Green reported an exceptional H1 FY26, with revenue growing 145% year-on-year to INR 342 crores, driven by strong order execution in module supply and rising demand in solar EPC. PAT surged 151.62% year-on-year to INR 32.88 crores, resulting in an EPS of INR 13.26, nearly doubling from H1 FY25. The company also achieved a positive operating cash flow of INR 25.89 crores, reflecting robust working capital management and efficient execution.
Capacity Expansion and Utilization Focus
The company successfully expanded its module manufacturing capacity from 750 MW to 1.1 GW. Management's immediate focus is on optimizing the utilization of this 1.1 GW plant, targeting an improvement from the current 69% to 85-90% within the current financial year. This strategy aims to maximize operational performance and profitability from existing assets before further capacity additions, despite the theoretical maximum capacity being 2.2 GW.
Strategic Shift Towards EPC and New Ventures
Ganesh Green is strategically increasing its emphasis on EPC work, including water supply, transmission lines, and substations, aiming for a 50% contribution to its business due to better margin ratios and control over project timelines. The company is also venturing into the Battery Energy Storage System (BESS) segment, starting with EPC work and targeting INR 500-600 crores in BESS revenue next year. Future plans include cell manufacturing by January 2028, contingent on government support for local production.
Robust Order Book and Execution Outlook
The company holds a robust order book of INR 976 crores, providing strong revenue visibility for the next 6-7 months. Management expects to execute 60-65% of this order book in H2 FY26, aligning with the 35% execution rate observed in H1. Ganesh Green is actively participating in new tenders worth INR 1500-2000 crores, including a significant INR 200 crore water supply project in Bihar, which is awaiting finalization.
Margin Dynamics and Working Capital Considerations
While the EBITDA margin for H1 FY26 was 14.61%, a slight decrease from 16.27% in H1 FY25, this was attributed to competitive pricing in the EPC segment and temporary softness in module supply and prices. Management anticipates margins to stabilize between 9-11% and potentially improve with the integration of BESS. However, future manufacturing expansions, particularly in cell and battery production, will necessitate substantial working capital, with an estimated INR 100 crores required for battery storage system working capital.
H2 FY26 Outlook and Ambitious Growth Targets
Management anticipates H2 FY26 to be significantly stronger, historically contributing 1.5x to 2x the H1 performance, driven by robust demand and improved operational efficiency. The company maintains an ambitious long-term target of doubling both turnover and profit annually. For the next year, a potential growth of 80-100% is projected, reflecting confidence in the company's strategic initiatives and market position.