Vikram Solar Q1 FY27 earnings call

Vikram Solar Limited reported a robust Q1 FY27 with revenue reaching ₹1,563 crores, marking a 38% year-on-year increase and an 8% sequential growth. This performance was underpinned by the highest-ever quarterly volume of 1,006 megawatts dispatched, representing a 32% increase compared to the same quarter last year. Despite market challenges^🌐, the company achieved an EBITDA of ₹126 crores, translating to an EBITDA margin of 8.06%, and a PAT of ₹19.78 crores.

Profitability in Q1 FY27 was impacted by a ₹1.86 per watt peak increase in the unit cost of goods sold. This rise was primarily driven by war-related inflation in base metals like aluminum and copper, affecting 35% of raw materials, and crude oil price spikes impacting EVA, which constitutes 12% of raw materials. Additionally, the lagged effect of Chinese cell price spikes from the previous quarter contributed to higher costs. Intense competition from new module capacity prevented the company from fully passing these increased costs to customers.

The company is actively repositioning its commercial engine by diversifying its customer base and shifting towards higher-margin segments. The order book closed at 7.9 gigawatt. A significant focus is on the distribution channel, which has doubled its monthly run rate from 40 megawatts last year, and the mid-market segment, expected to yield an additional ₹0.50 per watt peak in price realization. The company sold 76 MW of DCR modules this quarter, exceeding the total for the last fiscal year, with expectations for manifold increase in subsequent quarters.

Vikram Solar is on track with its backward integration commitments. The first module rolled out from the Gangaikondan facility on June 29, and the cell line is scheduled for commissioning in Q4 FY27, aiming for 70% backward integration. The board has approved an increase in wafer and ingot capacity from 6 GW to 9 GW. A total of ₹500 crores in capex was deployed this quarter, with 80% allocated to the module facility and the remainder to the cell plant. An additional ₹4,700 crores is anticipated for the rest of FY27, primarily funded by debt.

VSL PowerHive is advancing its 15 GWh integrated cell manufacturing and BESS assembly plan. The 7.5 GWh BESS assembly plant in Chennai is on track for equipment delivery in November 2026, installation in January 2027, and commercial operations by March 2027. For the 7.5 GWh LFP cell manufacturing plant, land options are shortlisted, and incentives are expected to be finalized by September 2026, with a tentative commercial operation date targeted for Q4 FY29. The company also executed its first 20 MWh utility-scale BESS order.

The deferment of ALMM 2 enforcement to December 2026, announced on July 18, has reactivated approximately 15 GW per year of C&I demand that was awaiting policy clarity. Management noted that fresh tendering after August 25 amounted to 35-40 GW. The utility market is estimated at 30-35 GW AC this year, and PM Surya Ghar plus KUSUM combined is projected at 14-15 GW. The company expects the policy-driven shift towards DCR to stabilize margins in the coming quarters^⏳.

The company maintains a strong financial position with no long-term debt and an almost negligible net debt to equity ratio. Working capital utilization decreased during the quarter, reflecting efficient management. Management reiterated that committed capital does not breach leverage guardrails, ensuring that growth will not come at the cost of balance sheet strength. The integrated site is viewed as a compounding asset, designed to capture margins currently held by external suppliers.