Detailed Narrative
Strong Q3 Performance and FY26 Outlook
Solarworld Energy Solutions reported a robust Q3 FY26, with revenue from operations growing 184% year-on-year to ₹578.23 crores. Profit after tax increased by 15% year-on-year, resulting in a net margin of 8.4%. For the nine months ended December 31, 2025, revenue from operations stood at ₹784.34 crores, a 113% YoY growth. Management expressed confidence in exceeding the FY26 revenue guidance of ₹1,500 crores, driven by a strong order book and strategic initiatives.
Expanding Order Book and Execution Visibility
As of December 31, 2025, the company's executed order book aggregated to almost ₹2,600 crores, comprising 7 EPC projects and 2 BESS orders. Additionally, Solarworld is L1 on two more orders (one BESS, one solar), which would bring the total order book to approximately ₹3,400-3,500 crores. Management anticipates executing about 20% of the current order book in the remainder of FY26, with the balance spilling over to FY27. BESS orders are noted for their quicker execution timelines compared to EPC projects.
Strategic Entry and Growth in BESS Segment
The company has formally entered the battery energy storage system (BESS) segment, with its 3.4 GW BESS manufacturing facility already receiving orders. A significant BESPA for a 200 MW / 400 MWh project valued at over ₹800 crores has been signed. Management views BESS as a key strategic focus, expecting it to be a major growth driver for FY27, with the mix shifting more towards BESS and less towards solar. The C&I segment is targeted for BESS, with a goal of 1-2 GW in the next 12 months, leveraging regulatory advantages in regions like Delhi NCR.
Manufacturing Expansion and Backward Integration
Solarworld successfully commenced operations of its solar module manufacturing line in Roorkee in July 2025, receiving ALMM approval for 1.552 GW annual capacity in December. This line is expected to contribute ₹70-80 crores PAT on a GW scale over the next 12 months, despite an initial loss of ₹11 crores in Q3 FY26 due to ramp-up. The 1.2 GW solar cell manufacturing facility is progressing as planned, with commercial operations targeted for June 2027. A junction box manufacturing line is also being established, expected to be operational by end of March 2026, to enhance cost efficiencies.
Challenges from Silver Prices and Grid Infrastructure
A significant concern highlighted was the quadrupling of silver prices, increasing the cost component in solar panels from ₹500 to ₹2,000. While this poses a challenge to margins, management believes it's a temporary situation and expects prices to normalize. Another major issue is grid curtailment due to insufficient transmission capacity and delays in substation development, which is impacting project execution and could slow down the pure solar market. Management anticipates these structural issues to be addressed within the next 12 months.
SJVN Project Delay and Management's Stance
The company is engaged in arbitration proceedings with SJVN regarding two projects in Bhuj (received in 2023) that have been delayed by two years due to SJVN's failure to provide land. Management stated there would be no negative financial implications and expects to recover retention amounts and incurred expenses. Despite this, Solarworld continues to execute other projects for SJVN, including a 70 MW project in Assam, indicating no broader relationship issues.