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    Solex Energy Limited

    SOLEX
    Capital Goods·27 May 2025
    Management Summary

    Solex Energy delivered robust financial performance in FY25, with significant revenue and profit growth driven by its module manufacturing and EPC businesses. The company is aggressively expanding its capacity, targeting 4 GW by October 2025 and a long-term vision of 15 GW module and 5 GW cell manufacturing by 2030. While facing working capital challenges and client concentration, management expressed confidence in future growth and operational efficiency, with a strong revenue outlook for FY26.

    Highlights

    5
    • Revenue for FY25 reached ₹665 crores, an 81% increase over the previous year's revenue.

    • PAT for FY25 was ₹42 crores, representing a 390% increase compared to the previous year, with a PAT margin of 6.4%.

    • EBITDA margin for FY25 was 11.4%, exceeding the company's internal estimate of 9-11%.

    • The company is on track to expand its module manufacturing capacity to a cumulative 4 gigawatts by October 2025.

    • Management is confident in achieving FY26 revenue guidance of ₹2,200-2,400 crores, driven by new capacity and strong order book.

    Concerns

    3
    • Cash flow from operations was negative due to increased receivables and inventory buildup in FY25.

    • High concentration on a single client, accounting for ₹1,300 crores of the ₹1,450 crores order book.

    • Past delays in commissioning the second module line (from January to March 2025) impacted FY25 revenue targets.

    What Changed2

    vs Q2 FY26

    Guidance items6 → 12 (+6)Risks discussed3 → 4 (+1)

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue₹665 Cr+81%YoY
    2. 02EBITDA Margin11.4%
    3. 03PAT₹42 Cr+3.9%YoY
    4. 04PAT Margin6.4%
    5. 05EPS₹43+3.0%YoY

    Segment breakdown

    • Module Manufacturing₹497 Cr74.7%
    • EPC Business₹166 Cr25.0%
    • Other Revenue (Sales & Job Work)₹2 Cr0.3%
    Donut· Share of Revenue

    Order Book

    high confidence

    Total Value

    ₹ 1,450 crores

    as of 2025-03-31

    quantified

    Composition

    Single Client(client type)
    ₹ 1,300 crores89.6%

    "Existing production lines are completely booked, and firm orders are in place for new lines, with the current order book being stable."

    Source:
    Q&A

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹1,500 crores

    INR 1,000 crores debt and INR 500 crores equity for future expansion; current 2.2 GW module expansion funded by internal accruals and preferential allotment funds.

    Debt

    Gross ₹150 crores

    Liquidity

    Liquidity disclosed

    Cash flow from operations was negative due to increased receivables (₹111.24 crores) and inventory buildup for the second production line. Customer advances stood at ₹58 crores as of March 31, 2025.

    Guidance & targets

    12
    CategoryTargetPriority
    Revenue
    Revenue
    INR2,200 crores to INR2,400 crores
    High
    Revenue
    EPC Revenue
    INR200 crores to INR300 crores
    High
    Revenue
    EPC Revenue Share
    10% to 12%
    High
    Revenue
    Revenue (4GW module capacity)
    INR3,000 crores to INR3,400 crores
    High
    Profitability
    PAT Margin
    6% to 7%
    High
    Profitability
    EBITDA Margin
    9% to 11%
    Medium
    Capacity
    Module Manufacturing Capacity
    4 gigawatt
    High
    Capacity
    Module Manufacturing Capacity
    15 gigawatt
    High
    Capacity
    Cell Manufacturing Capacity
    5 gigawatt
    High
    Capacity
    Cell Line Development
    very good development
    Medium
    Capacity
    Cell Line Operational
    operational
    High
    Debt
    Total Debt
    INR1,400 crores
    High

    FY26 Revenue Performance

    Next quarter (Q1 FY26 results)
    CurrentFY25 Revenue: ₹665 crores; FY26 Guidance: ₹2,200-2,400 crores
    TargetProgress towards ₹2,200-2,400 crores

    Why it matters

    Verifying if the company can achieve its ambitious revenue growth target after missing FY25 estimates.

    For the current year, we are not seeing any major issues and we are targeting the turnover to range between INR2,200 crores to INR2,400 crores.

    How to verify

    key_financials.metrics[label='Revenue']

    Risks & concerns

    4
    RiskSeverity

    Single Client Concentration

    A single client accounts for ₹1,300 crores of the ₹1,450 crores order book, posing a concentration risk.Analyst acknowledged

    medium

    Working Capital Deterioration / Negative Cash Flow

    Increased receivables and inventory led to negative cash flow from operations, though explained by expansion and sales cycle.Analyst acknowledged

    medium

    ALM List-2 Implementation Impact

    Potential for increased raw material (cell) prices and margin pressure if ALM List-2 is implemented before sufficient domestic cell manufacturing capacity.Analyst downplayed

    medium

    Execution Delays for Capacity Expansion

    Past delays in commissioning the second module line raised concerns about future expansion timelines, though management is confident for upcoming lines.Analyst acknowledged

    low

    Q&A highlights

    8

    “For the current year, we are not seeing any major issues and we are targeting the turnover to range between INR2,200 crores to INR2,400 crores.”

    Clarifies management's updated revenue expectations for the next fiscal year despite past delays in FY25.

    asked by Pranjal

    2 min read7 chapters

    Detailed Narrative

    01

    FY25 Performance Overview and Growth Drivers

    Solex Energy reported a robust financial performance for FY25, with revenue reaching ₹665 crores, marking an 81% year-over-year increase. The company's PAT surged by 390% to ₹42 crores, resulting in a PAT margin of 6.4%, while EPS stood at ₹43. This growth was primarily driven by strong contributions from both module manufacturing (₹497 crores) and the EPC business (₹166 crores).

    02

    Capacity Expansion and Technology Upgrades

    The company currently operates at 1.5 gigawatt module manufacturing capacity. An additional 2.5 gigawatt capacity is slated to become operational by September/October 2025, bringing the cumulative capacity to 4 gigawatts. Solex is strategically investing in advanced technologies like N-type TOPcon and HJT to produce high-efficiency modules, catering to both domestic and international markets, particularly targeting the USA.

    03

    Strategic Focus on Manufacturing and EPC Business

    Solex Energy maintains its primary focus on module manufacturing, with its subsidiary, Solex Green Energy Private Limited, managing the EPC business. The EPC segment contributed ₹166 crores to FY25 revenue, and management projects an annual EPC revenue of ₹200-300 crores, aiming for 10-12% of total revenue. The company adopts a selective approach to EPC projects, prioritizing manufacturing as its core domain.

    04

    Future Growth Trajectory and Vision 2030

    For FY26, Solex Energy forecasts a turnover between ₹2,200 crores and ₹2,400 crores. The company's ambitious Vision 2030 targets establishing 15 gigawatts of module and 5 gigawatts of cell manufacturing capacity. This expansion involves a significant CapEx of ₹1,500 crores for a 2 gigawatt cell line and an additional 2 gigawatt module line, with funding planned through ₹1,000 crores of debt and ₹500 crores of equity.

    05

    Working Capital and Debt Management

    FY25 saw negative cash flow from operations due to increased receivables (₹111.24 crores) and inventory buildup. Management attributed this to inventory procurement for the newly commissioned second production line and strong sales in March. Current debt stands at approximately ₹150 crores, with plans for total debt to reach ₹1,400 crores following the completion of future cell and additional module line expansions.

    06

    Addressing ALM List-2 and Cell Manufacturing Plans

    In response to concerns regarding ALM List-2 implementation and cell sourcing, management stated that they anticipate having their own cell lines operational before the full enforcement of ALM List-2. They also believe the government will likely extend the ALCM implementation date due to insufficient domestic cell manufacturing capacity, and any increases in cell prices would be passed on to module prices.

    07

    Mainboard Migration and Operational Excellence

    Solex Energy's migration to the mainboard has been delayed as the company is currently under ESM. Management confirmed plans to provide quarterly results and expressed confidence in meeting all criteria for mainboard listing once out of ESM. The company emphasized its advanced Manufacturing Execution System (MES) software and comprehensive testing facilities as key differentiators, ensuring transparency and quality control in its operations.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.