Solex Energy Limited

Solex Energy reported a robust H1 FY26 with total revenue reaching ₹415.7 crores, marking a 51.8% year-on-year growth. EBITDA margin expanded significantly to 14.7% from 9.6% in H1 FY25, and PAT stood at ₹30.5 crores with a 7.3% margin. However, the extended monsoon season led to delayed site readiness for IPP projects, causing a temporary increase in working capital days to 102 and an inventory build-up of ₹153 crores by September 30, 2025, which muted Q2 revenue growth.

The company successfully commissioned its production Line-3 and Line-4, bringing the total module manufacturing capacity to 4 GW. These lines are now operational, and the ramp-up is progressing as planned. This expansion is critical for meeting the growing demand and achieving the full-year revenue targets, with management confident that the operationalization of these lines will significantly contribute to H2 FY26 performance.

Solex Energy maintains a strong order book exceeding ₹4,000 crores as of September 30, 2025, which includes ₹100 crores from EPC orders. This order book is slated for execution across FY26 and FY27, with a significant portion, including approximately ₹1,300 crores of WIP orders, targeted for delivery before March 31, 2026. The company also has multiple master service agreements in the finalization phase, expected to convert into formal purchase orders in coming quarters, further strengthening the revenue pipeline.

Solex is progressing with its plan to establish a 2.2 GW N-Type TOPCon Plus solar cell manufacturing facility, targeting commissioning by March 2027. This initiative is supported by an MoU with ISC Konstanz, a German R&D institute, for developing advanced Indianized rear-contact cell technology and monitoring the new TOPCon line. The total capex for this expansion is estimated at ₹1,500 crores, with ₹1,100 crores allocated for the cell line, ₹200 crores for module capacity, and ₹100 crores for working capital, funded by ₹1,000 crores of bank debt and ₹500 crores of equity.

Management expressed confidence in sustained demand for solar modules, dismissing concerns about oversupply. They highlighted the significant increase in India's annual solar capacity addition (from 8-10 GW to 30-40 GW), the shift from imported to domestic modules, and the emerging demand from Battery Energy Storage Systems (BESS) which could double solar panel requirements. Repowering of old solar projects also presents an additional demand segment. The company is also eyeing export opportunities, particularly in the US and Europe, as geopolitical situations evolve.

Despite the temporary increase in working capital days in H1 due to inventory, management expects it to reduce to 80-85 days by the end of FY26 as deliveries commence. The company aims to maintain a PAT margin of 6-7% and expects higher capacity utilization and stronger cash convergence in H2 FY26. Gross margin expansion in H1 was attributed to a higher mix of own-brand sales and economies of scale, which are expected to continue improving.