Detailed Narrative
Strong Q3 & 9M FY26 Financial Performance
Websol Energy reported robust financial results for Q3 FY26, with Revenue from Operations reaching ₹261 crores, marking a 77.2% year-over-year increase. EBITDA stood at ₹106 crores (40.8% margin), and PAT was ₹65 crores (24.8% margin). For the nine months ended December 31, 2025, revenue was ₹648 crores (up 61% YoY), with an EBITDA margin of 43.6% and PAT margin of 27.3%. This growth was primarily attributed to the commissioning and ramp-up of Cell Line-2.
Ambitious Expansion and Funding Strategy
The company is progressing with its proposed 4 GW integrated solar cell and module manufacturing facility in Andhra Pradesh, having secured land allotment and an incentive package. The estimated cost for Phase-3 (2 GW Topcon cell and module) is ₹1,600-1,700 crores, planned with a 70:30 debt-equity mix. Debt of ₹1,100-1,200 crores is being discussed with financial institutions, with financial closure expected by March-April 2026. The equity component of ₹500 crores will be funded through internal accruals, with no immediate plans for market equity raise for Phase-3.
Operational Efficiency and Capacity Utilization
Operational performance remained strong, with Cell Line-1 achieving 97% utilization in Q3 FY26. Cell Line-2, commissioned in September 2025, reached 54% utilization during its ramp-up phase and is currently operating at close to 90% utilization. The module line also saw improved utilization at 64% in Q3 FY26. The company reported peak cell efficiency of 23.6% from Cell Line-2 within three months of commissioning, demonstrating strong execution capabilities.
Backward Integration and Technology Advancement
Websol Energy is actively pursuing backward integration, having signed an MOU with Linton for local manufacturing of PV ingots and wafers in India. A 2.5 GW wafer line is planned, targeting completion by June 2028 to align with ALMM mandates. The company is also evaluating converting its current Mono PERC facility to Topcon technology for higher efficiency levels and researching post-Topcon technologies like Back-Contact and Perovskites. Efforts are also underway to further reduce silver consumption by another 10%, building on the 25% reduction already achieved.
Market Dynamics and Margin Outlook
Management acknowledged that while margins have been strong (40%+ EBITDA), some moderation is expected in the long term (2-3 years) as industry capacity increases, with a potential 3-4% variation. However, they are confident in maintaining high industry margins due to their unique position with higher cell capacity than module capacity and strong execution. The DCR market remains lucrative, and prices, which dipped in Q3, are now firming up due to factors like rising silver prices and China's lifting of export rebates.
Order Book and Demand Environment
The company's order book stood at approximately ₹1,150 crores as of December 31, 2025, with a balanced mix of modules (57%) and cells (43%), providing good visibility. All current orders are for the DCR segment, with no export exposure. Management noted a sizable demand for solar cells and modules, particularly from government schemes like PM KUSUM and PM Surya Ghar. Despite some temporary customer liquidity constraints leading to deferred sales in Q3, the overall demand outlook remains positive.
Debt Management and Corporate Governance
Websol Energy has significantly improved its financial health, with net debt at ₹89 crores and a Debt/EBITDA ratio of 0.47x as of December 31, 2025. The company is actively working to release shares pledged against its existing IREDA loan (net debt ~₹100 crores) in the next few months and aims for no further share pledges for the upcoming Phase-3 debt. A contingent liability of ₹75 crores related to income tax has been reversed, with the company's claim allowed by the IT appeal commission, which has been communicated to the exchange.