Detailed narrative
Strong Financial Performance in Q3 and 9M FY26
UTLSOLAR delivered robust financial results for Q3 FY26, with revenue from operations surging by 73.8% year-on-year to ₹588.5 crores. EBITDA more than doubled to ₹109.9 crores, leading to an expanded EBITDA margin of 18.7% from 15.5% in the prior year. For the nine months ended December 31, 2025, revenue grew 65.4% to ₹1,753.7 crores, and EBITDA increased 88.1% to ₹318.8 crores, with margins improving to 18.2%. Profit after tax for Q3 stood at ₹67.3 crores, reflecting an 11.4% PAT margin.
Strategic Capacity Expansion and Backward Integration
The company successfully commissioned a 1 gigawatt solar cell manufacturing plant at Dadri, Uttar Pradesh, with an investment of approximately ₹300 crores, significantly enhancing backward integration. This new facility brings the total solar panel manufacturing capacity to 1.6 gigawatts. The Dadri plant's 1.2 gigawatt solar cell capacity will be entirely used for captive consumption, reducing reliance on imported solar cells. Management aims for 80% utilization of the Dadri solar cell line by the end of Q4 FY26.
Expansion of Ratlam Facility and Future Growth Drivers
UTLSOLAR is expanding its Ratlam facility with new lines for solar modules (2 GW), lithium-ion packs (2 GW), and inverters/power lines (2 GW). The CapEx for this expansion, excluding land, is approximately ₹272 crores, with ₹159 crores allocated for machinery (₹106 crores for solar modules, ₹28 crores for inverters, ₹25 crores for lithium-ion batteries). Management expects these new Ratlam lines to contribute to revenue from Q1 FY27, targeting at least 50% utilization in FY27 and 100% in FY28, potentially doubling overall manufacturing capacity and revenue.
Product-wise Revenue Contribution and Sales Volumes
In Q3 FY26, solar panels contributed approximately ₹298 crores to revenue, batteries ₹100 crores, and electronics ₹160 crores, out of a total revenue of ₹588.5 crores. For the nine months of FY26, the company sold around 460 megawatts of solar panels, a significant increase from 255 megawatts in the same period last year. Inverter, charger, and UPS sales reached 900 megawatts, up from 508 megawatts in 9M FY25. The company targets minimum sales of 1 gigawatt each for solar panels, inverters, and batteries in FY27.
Government Policy Support and Market Opportunity
Management highlighted the favorable long-term outlook driven by the government's target of 300 gigawatts of installed solar capacity by 2030. Recent budget changes, including the reduction of basic customs duty on raw materials for solar glass manufacturing from 7.5% to 0%, are expected to lead to better prices for domestic glass and improved operational benefits. The exemption of customs duty on machines for battery manufacturing also supports the domestic ecosystem. The company anticipates capturing almost 800 megawatts of the DCR market in the coming year.
Distribution Network Expansion and Operational Efficiency
UTLSOLAR continued to strengthen its distribution network, adding over 60 distributors, more than 400 dealers, and 20 exclusive Shoppes outlets in Q3 FY26, bringing the total channel partner base to over 8,200. This expansion deepens market reach and customer engagement. Operationally, the company is focused on disciplined execution, leveraging in-house manufacturing to improve gross margins by 2.1% YoY in Q3. Management is also implementing Corrective and Preventive Actions (CAPA) and introducing AI to enhance operational efficiency across all functions.
Pricing Strategy and Raw Material Management
The company employs a strategy of gradually passing on raw material price increases or decreases to customers to maintain gross margins and customer satisfaction. For instance, a ₹2 per watt price hike in cells might be passed on as a ₹0.25 per week increase over eight weeks. This approach ensures margin stability while managing customer expectations. Management noted recent relief in raw metal prices, particularly silver, which could further support profitability.