Fujiyama Power Systems Q1 FY27 earnings call

Fujiyama Power Systems Limited commenced the new financial year with robust growth, reporting a 125.3% year-on-year increase in revenue from operations to ₹13,457 million. EBITDA grew by 140.6% year-on-year to ₹2,548 million, with the EBITDA margin expanding to 18.9% from 17.7% in Q1 FY26. This improved operating profitability was attributed to increased business scale, better utilization of manufacturing and operating infrastructure, and process improvements. Normalized PAT, excluding the Bawal fire incident, stood at ₹1,652 million, marking a 144.5% year-on-year increase with a margin of 12.3%.

The company made significant progress in manufacturing, commissioning a 2-gigawatt solar panel manufacturing facility at Ratlam, increasing total solar panel capacity to 3.5 gigawatt. Additionally, a 2-gigawatt power electronics manufacturing facility was commissioned at Ratlam in August 2026, producing solar inverters, UPS systems, and related products. The 2-gigawatt lithium-ion battery manufacturing capacity at Ratlam is on track for commissioning by Q2 FY27. Fujiyama also increased its stake in Zayo Energy Private Limited and Zayo Cable Private Limited from 19% to 50% to deepen backward integration for solar module components.

Fujiyama recorded one of its largest quarterly expansions in its distribution network, adding over 80 distributors, 1,000 dealers, and more than 30 exclusive Shoppes. This expanded the total channel partner network to over 10,100 as of June 2026. The wider network aims to provide greater customer access, faster product availability, installation, and after-sales service, particularly crucial for the residential rooftop solar segment. The company expanded its coverage to two new states, Odisha and Uttarakhand, ensuring at least one distributor and service engineer in each district.

The PM Surya Ghar, Muft Bijli Yojana, targeting 1 crore households, continues to drive rooftop solar adoption. Management noted that 50 lakh houses are already covered under Phase 1, with an additional 15 gigawatt expected. The proposed PM Surya Ghar 2.0, which may include support for battery storage and incentives for actual power generation, is being closely monitored as it could further expand the addressable market. The company believes its cost-effective service network will help capture more market share in these schemes.

A fire incident at the Bawal facility resulted in damage to building structures, plant, machinery, inventories, and other assets with a net carrying value of ₹1,436 million. The company recognized this as a provisional exceptional loss in Q1 FY27. However, the affected assets are adequately insured, and management expects to recover the entire carrying value through the claims process, with settlement anticipated by the end of the financial year. To ensure business continuity for lead-acid battery production, the company is in talks to rent another operational plant.

The company's cumulative gross block, including CWIP, is expected to reach ₹1,300 crores by the end of FY27. For the current year, an additional capex of ₹500 crores is planned, which will be funded by ₹200 crores from debt, ₹100 crores from IPO funds, and ₹200 crores from internal accruals. The capex for the Zayo acquisition (Fujiyama's 50% share) is estimated at ₹90-100 crores, with an equity portion of approximately ₹50 crores. The company is also installing 2-gigawatt Lithium-ion batteries in its Ratlam plant, focusing on residential BESS.

Fujiyama's product portfolio includes DCR and non-DCR panels, lead-acid and lithium-ion batteries, and on-grid, off-grid, and hybrid inverters. While backward integration supports margin profiles, the company intends to pass on some efficiency gains to customers through competitive pricing. The EBITDA margin expansion to 18.9% was driven by increased scale and better cost absorption. Management aims to maintain or improve margins, acknowledging raw material price volatility as a variable factor. The company's focus is currently on on-grid solutions, driven by the PM Surya Ghar scheme, while off-grid solutions continue to grow, albeit at a slower pace.