Concall AI

Websol Energy System Limited — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

Websol Energy System Limited delivered a strong Q3 FY26 performance, driven by the commissioning and ramp-up of Cell Line-2, leading to significant revenue and profit growth. The company reported robust margins and a healthy order book, while also making progress on its ambitious expansion plans for a 4 GW integrated facility in Andhra Pradesh and backward integration into wafer and ingot manufacturing. Despite some temporary customer liquidity constraints affecting offtake, management expressed confidence in future growth and margin sustainability, albeit with some expected moderation as the industry matures.

Highlights

Revenue from Operations for Q3 FY26 was ₹261 crores, a 77.2% increase year-over-year.
EBITDA for Q3 FY26 stood at ₹106 crores, with a margin of 40.8%.
PAT for Q3 FY26 was ₹65 crores, representing a margin of 24.8%.
For 9M FY26, revenue from operations reached ₹648 crores, up 61% year-over-year, with an EBITDA margin of 43.6% and PAT margin of 27.3%.
Net debt as of December 31, 2025, was ₹89 crores, improving the Debt/EBITDA ratio to 0.47x from 0.60x in FY25.
The order book as of December 31, 2025, was approximately ₹1,150 crores, balanced between modules (57%) and cells (43%).
Cell Line-1 achieved 97% utilization, and Cell Line-2, commissioned in September 2025, reached 54% utilization during its ramp-up phase.
Approval received for a proposed 4 GW integrated solar cell and module manufacturing facility in Andhra Pradesh, with land allotted and incentive package approved.

Key financials

3 periods

Headline

Net Debt (Dec 31, 2025)
₹89 Cr
Debt/EBITDA Ratio (Dec 31, 2025)
0.47×
Order Book (Dec 31, 2025)
₹1,150 Cr
Current ROCE
51%
Silver Consumption Reduction
25%

Q3 FY26

Revenue
₹261 Cr
YoY +77.2%
EBITDA
₹106 Cr
EBITDA Margin
40.8%
PAT
₹65 Cr
PAT Margin
24.8%
Cell Line-1 Utilization
97%
Cell Line-2 Utilization
54%
Module Line Utilization
64%

9M FY26

Revenue
₹648 Cr
YoY +61%
EBITDA
₹282 Cr
EBITDA Margin
43.6%
PAT
₹179 Cr
PAT Margin
27.3%

What they filed

Q1 FY27: revenue up 70.3%, net profit up 16.4% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	144	147	173	219	168 +17%	261 +78%	401 +132%	373 +70%
Expenses	81	80	95	115	96	155	255	247
EBITDA	63	68	78	103	72 +14%	106 +56%	146 +87%	126 +22%
Margin	44%	46%	45%	47%	43%	41%	36%	34%
Other income	0	0	1	2	3	-3	6	4
Interest	6	5	4	4	5	4	4	4
Depreciation	9	15	10	11	11	16	24	22
Profit before tax	49	48	66	91	60 +22%	84 +75%	125 +89%	104 +14%
Tax rate	14%	14%	27%	26%	23%	23%	0%	25%
Net profit	42	42	48	67	46 +10%	65 +55%	124 +158%	78 +16%
EPS	0.99	0.98	1.14	1.59	1.10	1.54	2.87	1.79

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Profitability

EBITDA Margin Profitability · next 2-3 years · Medium confidence 40%+

Definitely 2-3 years we foresee that margins should remain at the level that they are.

— Sanjana Khaitan, Executive Director
EBITDA Margin Variation Profitability · short term · Medium confidence 3%-4%

Definitely there maybe some sort of 3%-4% variation, but otherwise the level we are at right now, we should continue at that level.

— Sanjana Khaitan, Executive Director

Capex

Phase-3 Project Cost Capex · upcoming · High confidence ₹1,600-1,700 crores

So, basically on the funding part, as you said, we are projecting a cost of around Rs. 1,600 crores to Rs. 1,700 crores for Phase-3 which is the cost for an integrated 2 GW Topcon cell and module manufacturing facility.

— Sanjana Khaitan, Executive Director

Debt

Phase-3 Debt Funding Debt · upcoming · High confidence ₹1,100-1,200 crores

for the debt part, we are already in touch with Financial Institutions and Banks for around Rs. 1,100 to Rs. 1,200 odd crores.

— Sanjana Khaitan, Executive Director
Financial Closure for Phase-3 Debt · Q4 FY26 · High confidence March-April

our discussions are at an advanced stage and we are hoping that we can achieve financial closure by around March-April in order to ensure that our timelines for this project do not move.

— Sanjana Khaitan, Executive Director

Equity

Phase-3 Equity Funding Equity · upcoming · High confidence ₹500 crores

With respect to the equity part, which should be around Rs. 500 crores, I think we are very comfortable from a margin perspective that we would have those cash flows to pump this money as our internal accruals.

— Sanjana Khaitan, Executive Director
Warrant Conversion Completion Equity · Q4 FY26 · High confidence February-March

There is a warrant conversion which is happening at the promoter level. So, that would be completed by around February-March.

— Sanjana Khaitan, Executive Director

Technology

G12R Conversion Technology · by the middle of next year · Medium confidence one of the lines

At the moment we don't have, but then we will be ramping one of the lines to G12R by the middle of next year.

— Vasanthi Sreeram, Chief Technical Officer

Efficiency

Silver Consumption Reduction Efficiency · future · High confidence another 10%

We are working on bringing it further down. So another 10% is our target.

— Vasanthi Sreeram, Chief Technical Officer

Capacity Utilization

Cell Line-2 Utilization Capacity Utilization · current quarter · High confidence 90%

Our target for the current quarter is to ramp up Line-2 to 90% up and module to 75%.

— Sanjana Khaitan, Executive Director
Module Line Utilization Capacity Utilization · current quarter · High confidence 75%

— Sanjana Khaitan, Executive Director

Cost of Capital

Cost of Fund Cost of Capital · current · Medium confidence 9%-10.5%

Generally, I believe the cost of fund as of now is between 9%-10.5%.

— Amrit Daga, Chief Financial Officer

ALMM

ALMM Approval for Second Line ALMM · Q4 FY26 · High confidence by the next month

our second line will also receive the ALMM approval by the next month.

— Sanjana Khaitan, Executive Director

Capacity

Wafer and Ingot Manufacturing Line Capacity · upcoming · High confidence 2.5 GW

To begin with, we have planned a 2.5 GW line which we will further expand in time to come. That is on the wafer front.

— Sanjana Khaitan, Executive Director
Wafer and Ingot Manufacturing Timeline Capacity · by June 2028 · High confidence June 2028

we are hoping that we will be able to bring such capacities in time of the Government's ALMM mandate for wafer which has been announced for June 2028.

— Sanjana Khaitan, Executive Director

Risks & concerns

Margin compression due to increasing industry capacity
medium

Management foresees some dip in margins to more sustainable levels in time to come due to announced capacities, but believes it will take 2-3 years for these capacities to come on ground and ramp up.

Analyst acknowledged
Silver price volatility and its impact on input costs
medium

Silver prices have increased significantly; management is mitigating this through advanced procurement and a 25% reduction in consumption, with a target for another 10% reduction.

Analyst acknowledged
Offtake delays and inventory build-up due to customer liquidity constraints
medium

Higher utilization did not fully translate to revenue due to temporary liquidity constraints at the customer end, leading to deferred sales and an inventory build-up of ₹93 crores. Management expects normalization in the current quarter.

Both acknowledged
Competition from Chinese manufacturers and dumping practices
medium

Chinese dumping in the European market has been a concern, but management believes India's increased capacity and economical prices will help compete. China has also realized dumping at a loss.

Analyst acknowledged

Q&A highlights

2 direct

Sustainability of high EBITDA margins Partial

We have reported margins of 40% plus in the last few quarters. Given all the capacities which have been announced, we do foresee that there would be some dip in the margins to more sustainable levels in time to come. However, given all the capacities that have been announced, we feel that it would take some time for such capacities to come on ground.

Analysts are concerned about margin compression due to increasing industry capacity, and management acknowledges potential moderation while emphasizing execution challenges for new entrants.

Asked by Aman Soni

Funding strategy for the Phase-3 Andhra Pradesh project Direct

So, basically on the funding part, as you said, we are projecting a cost of around Rs. 1,600 crores to Rs. 1,700 crores for Phase-3 which is the cost for an integrated 2 GW Topcon cell and module manufacturing facility. As of now, we are hoping for a 70:30 debt equity mix for this project wherein for the debt part, we are already in touch with Financial Institutions and Banks for around Rs. 1,100 to Rs. 1,200 odd crores... With respect to the equity part, which should be around Rs. 500 crores, I think we are very comfortable from a margin perspective that we would have those cash flows to pump this money as our internal accruals.

This question clarifies the significant capex plan, its funding mix (debt vs. internal accruals), and timeline, which is crucial for assessing future growth and balance sheet health.

Asked by Amit Mishra

Reasons for inventory build-up despite a strong order book Direct

As I said that, I mean, the reason the inventory has built up is because of certain liquidity constraints at the customer end. In fact, this has been an industry phenomenon that there has been some temporary liquidity constraints. This has delayed the sales. Of course, these orders are not cancelled, but just deferred orders. We are hopeful that the slow offtake of the previous quarter will get neutralized in the current quarter.

The inventory increase is a potential red flag, and management's explanation points to external customer liquidity issues rather than internal production or demand problems, which is important for understanding the nature of the delay.

Asked by Yash Chandalia

3 min read 7 chapters

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.

This is an AI-generated summary of a publicly available earnings call transcript.

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