Detailed Narrative
Robust Q2 & H1 FY26 Financial Performance
Fujiyama Power Systems Limited delivered strong financial results for Q2 FY26, with revenue from operations growing 72.6% year-on-year to INR 5,679 million. PAT margins improved from 9.7% in Q2 FY25 to 11.1% in Q2 FY26. For the first half of FY26, revenue reached INR 11,653 million, a 61.5% increase year-on-year, while EBITDA stood at INR 2,089 million with a margin of 17.9%. The company's profitability for H1 FY26 was 11.2% PAT margin, up from 10.4% in H1 FY25, driven by improved material margins and operational efficiencies.
Strategic Focus on Power Electronics & B2C Rooftop Solar
Management reiterated its core identity as a power electronics and energy solutions company, not just a solar panel manufacturer. The B2C segment remains the primary revenue driver, contributing over 90% of H1 FY26 revenue, focusing on off-grid and hybrid rooftop solar solutions for customers facing unreliable grids. The company's integrated approach provides complete systems including solar inverters, batteries, and panels, with a network of 7,500+ channel partners and 600+ service engineers supporting last-mile delivery and after-sales service.
Aggressive Capacity Expansion & Backward Integration
UTLSOLAR is undertaking significant capacity expansion, funded by IPO proceeds. The 1,000 megawatt solar cell line in Dadri is expected to be commissioned within one month and reach full capacity by March/April 2026. Additionally, the Ratlam facility is projected to add 2,000 megawatts each of solar panels, inverters, and batteries by March 2026. These expansions aim to double the company's total capacity by the end of FY26, enhancing backward integration and securing consistent supply for in-house consumption.
Working Capital Dynamics and Balance Sheet Health
As of September 30, 2025, total assets increased to INR 15,900 million, and total debt rose to INR 6,740 million, reflecting pre-IPO funding. Post-IPO, INR 2,750 million was used for debt repayment, bringing the pro forma net debt-to-equity ratio to a healthier 0.35. Net working capital days for H1 FY26 were 70, stable year-on-year. However, inventory days temporarily increased to 108 due to sales deferrals from a GST rate cut and raw material procurement for new capacities, with management expecting stabilization to 90-98 days in coming quarters.
Market Outlook and Growth Strategy
The company sees a favorable environment for solar technology, driven by India's target of 300 gigawatts of installed solar capacity by 2030 and rising household awareness. Despite an industry concern about module oversupply, management believes its B2C focus and captive consumption for integrated solutions insulate it from this risk. UTLSOLAR targets Tier 2, Tier 3, and rural villages, with plans to expand into Tier 1 cities once DCR cell capacity is available. The company also highlighted its use of AI in sales to improve conversion ratios and operational margins.
Impact of GST Rate Cut and Sales Deferrals
The Q2 FY26 revenue saw a 4.9% quarter-on-quarter decline, primarily attributed to a temporary market pause caused by a GST rate cut on solar equipment from 12% to 5%. Customers postponed purchases to benefit from the lower tax rate, leading to a month of muted activity. Management clarified that "the sale that is lost, is lost," indicating that these deferred sales are not fully recoverable, which impacted the overall financial revenue for the quarter.