Vikram Solar Q2 FY26 earnings call

Vikram Solar reported robust Q2 FY26 results with revenue reaching INR 1,110 crores, a 94% year-on-year growth compared to INR 573 crores last year. Profit after tax (PAT) surged 16 times to INR 129 crores, with PAT margins expanding to 11.58%. EBITDA grew 3x year-on-year to INR 235 crores, achieving a 21.1% margin, up from 12.59%. For H1 FY26, revenue stood at INR 2,244 crores (up 86% YoY), PAT at INR 262 crores (up 9x YoY), and EBITDA at INR 477 crores (up 2.6x YoY), demonstrating consistent profitable growth.

As of September 30, 2025, the order book stood at an impressive 11.15 gigawatt, representing a 36% year-on-year growth compared to 8.21 gigawatt last year, providing strong visibility for coming quarters. The order book comprises 85% domestic and 15% export orders. Notably, the C&I segment's share in the order book surged from 4% to 20% year-on-year, and the distribution business increased from 6% to 13%, reflecting strategic shifts. The company also has a robust order pipeline of approximately 38 gigawatts, ensuring long-term visibility.

Vikram Solar is executing major capacity expansion projects. The 5 gigawatt module manufacturing facility at Vallam, Tamil Nadu, is expected to commission during Q3 FY26, with two lines (2.5 gigawatt) in November and the remaining two in December. The Greenfield project at Gangaikondan, comprising 6 gigawatt of modules and 12 gigawatt of cells, is progressing, with the module facility planned for commissioning in Q4 FY26. These expansions will increase total module capacity to 15.5 gigawatts by FY26 end, with cell capacity additions planned in phases for Q3 FY27 (3 GW) and Q4 FY27 (9 GW).

The total capex for the 12 gigawatt cell and 6 gigawatt module projects is estimated at INR 6,100-6,200 crores, funded by IPO proceeds (INR 1,500 crores), debt (INR 3,500 crores), and internal accruals (INR 1,200 crores). As of September 30, 2025, the company is net debt-free on a consolidated basis, with gross debt of INR 80 crores. The weighted average cost of debt for H1 FY26 reduced to 7% from 9.75% in FY25, and a term loan of INR 88 crores was prepaid in September, reflecting prudent financial management.

Government policy support, including PM Kusum and PM Surya Ghar, continues to drive demand. A recent GST rate reduction on solar components from 12% to 5% (effective Sep 22, 2025) is expected to boost demand and domestic manufacturing. While DGTR recommended an anti-dumping duty on imported cells (23-30%), most orders have pass-through clauses. The ALMM-II for cells (June 2026) and proposed ALMM-III for wafers (June 2028) are being strategically addressed with backward integration plans to ensure compliance and competitive advantage.

Despite some pricing softness in recent months, the company maintained strong EBITDA margins of 21.1% in Q2 FY26, attributed to operational excellence and continued focus on efficiency. Management emphasized that pass-through clauses for cell costs in most contracts help mitigate raw material price volatility. Backward integration into cell manufacturing is expected to further enhance margins, particularly in the more profitable DCR segment, by ensuring structural cost competitiveness and technological leadership.