Ladies and gentlemen, g ood day and welcome to the Premier Energies Limited Q1 FY 2026 Earnings Conference Call hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities. Please go ahead, sir.
Good morning. On behalf of ICICI Securities, I welcome you all to the Q1 FY 2026 earnings call of Premier Energies . Today we have with us from the management, Mr. Chiranjeev Singh Saluja, Managing Director, Mr. Nand Kishore Khandelwal, Chief Financial Officer, and Mr. Vinay Rustagi, Chief Business Officer. We'll begin with the opening remarks from the management, which will be followed by Q& A. Thank you. Over to you, sir.
Thank you, Mohit. I'm audible to you.
Yes, sir, you are.
Good morning everyone, and thank you for joining us today for our quarter one FY 2026 earnings call. Pleased to report a strong start to the financial year with our best ever performance in terms of revenue and profit i n the long history of the company.
In quarter one, our total revenue stood at INR 18,695 million, marking a 12% year-on-year growth. More importantly, we delivered a robust profitability with EBITDA at INR 5,971 million, up 61% year-on-year, and a profit after tax at INR 378 million, a 55% increase over the same quarter last year. What makes this performance even more noteworthy is that it comes despite planned annual maintenance on our cell lines during this quarter. Thanks to strong execution on the ground, we were able to maintain high uptime and strong production volumes across the board. A key milestone this quarter was the successful commissioning of our 1.4 GW module line and time-bound commissioning of our 1.2 GW TOPCon cell manufacturing line. This marks a significant step forward in our growth journey and sets the stage for our next phase of expansion.
We remain firmly on track to deliver on our mission 2028, our ambitious roadmap to build an integrated 10 GW inward to module manufacturing ecosystem, 12 GW hours of battery energy storage systems, and 3 GW of inverter capacity by the end of FY 2028. I'm happy to report that all projects are progressing well, both on timelines and within budget, reflecting our disciplined execution and long-term vision. The macro environment continues to be highly supportive. We are seeing strong and broad-based demand across all our focus segments. The solar industry is witnessing record capacity additions, and we expect this momentum to continue. O n battery energy s olar system is poised to take off in a big way with about 19 GW hours of capacity already awarded and more activity expected through hybrids and FDRE tenders.
Meanwhile, the residential rooftop solar is gaining strong traction, driven by initiatives like the Prime Minister Surya Ghar Muft Bijli Yojana. We believe that this will be a long-term structural trend. On the policy front, we are encouraged by the government's sustained push for domestic manufacturing, and we expect further initiatives to promote upstream capacity and advance future-based technology development. Given the strong demand and outlook, we have accelerated our plans for both battery energy storage systems and inverter manufacturing. We aim to have both verticals begin contributing to our top line from the beginning of FY 2027. Regarding our proposed cell manufacturing plant in the U.S., we have decided to continue keeping those plans on hold for now, pending greater clarity on the U.S. policy and tariff. That said, it's important to note that our business model is deeply anchored in the Indian market.
Less than 1% of our total order book currently comes from the United States. Looking ahead, we continue to evaluate new opportunities that align with our core strengths and offer scale and strategic fit. We remain agile and open to meaningful growth avenues that can complement and enhance our platform. As we approach our first anniversary as a listed company, I want to thank all our investors and stakeholders for your trust and support. We remain committed to building long term value and delivering sustainable, profitable growth. FY 2027 will be a pivotal year for cleaner energy. We'll be more than doubling our cell and module capacities and unlocking new revenues across different streams like battery energy storage systems, inverters, ingots, and wafer. We believe we are well positioned to lead India's clean energy transition and create meaningful value for all our stakeholders. Thank you once again.
With that, we are happy to take your questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Subramaniam Yadav from SBI Life Insurance. Please go ahead.
Thank you. I just wanted to understand the order inflow numbers. We are at about INR 2,000 crore inflows this quarter. When you look at the breakup of that, the cell mix has been increased to 39% versus 27% in the last quarter. What is our strategy going ahead in terms of this? We have already commissioned our module facility. How do we look at it? Would it be internally used or are we going to sell it to third party?
Subramaniam. Hi, good morning. This is Vinay here. I think what has happened there is that there is big demand for sales in the domestic market, particularly going beyond even FY 2026. We've had a closure on a few of those send orders. I think it is just the result in the share of sales in the order book. It's simply a restriction on that. I would also be ready for that. For the business needs and modules, we have huge capacities coming up as you know.[audio distortion]
Sorry to interrupt, sir, but your voice seems distant. Can you come closer. S ir, it was a little bit distant.
I was just saying that w e had going into FY 2027 order books has gone up. Having said that, we should not read too much into that as a specific company strategy. We have lots of capacity coming up for both shelf and modules, and we continue to evaluate the market environment in terms of demand and pricing and will fix our strategy on an ongoing basis accordingly.
Okay. Sir, have you seen any pricing pressure? Because though we have improved in realization on cell and module, in the last six to eight months there have been a couple of facilities come up. Incrementally, for the next six months, are you seeing any pressure in pricing ?
No, so t he answer to that is as of now we see any pricing pressure, as you can see in the results for the quarter as well as what we have in our order book. I think there is a lot of volatility in the market in terms of pricing of some of the raw materials. On the whole, we are able to protect our margins and we don't see that impacting our profitability.
So this is annual maintenance, how much time was the plant shut down for this maintenance?
Sorry, I can take this for annual maintenance. Generally, for annual maintenance you allocate about, but it could add another day or two for them coming back into the right efficiency numbers. Anything between three to five days.
Okay. Okay. Thank you, sir. Thank you very much.
Thank you.
Thank you. The next question is from the line of Mr. Mohit Kumar. Please go ahead.
Hi. Good morning. Congratulations on another good quarter. My first question is, on the order book. I s it possible to help us say traditionally the order book composition at the end of Q1 FY 2025 versus Q1 FY 2026, especially between DCR and non-DCR, has the composition changed materially?
Mohit, the competition has not changed materially. Of course, there is an uptick in the DCR demand when you compare between Q1 FY 2025 and Q1 FY 2026. As our production lines also have come up, I don't see there's a material change. The demand for DCR is increasing. Starting June 26th, as you're aware, it will become totally ALLM, which is 100% DCR for the Indian market.
Yeah. The second question is what is. The progress on the aproved list of sales. Has the application is submitted, and when do you think the list will be made public or notified?
In our case, the application has been submitted, fees paid, inspections done. I think a couple of other manufacturers also have facilities which have been inspected, and I think it's now sitting with the National Institute of Solar Energy for them to compile and come up with a list shortly.
My last question, sir. H ow seen the demand of the sale from U.S.? Are you receiving more inquiries? Expect to see some booking in this fiscal year for supplying sale to the U.S. market.
On a short term or medium term outlook, there is a big demand from the U.S., but then we don't have enough capacities. Our priority has always been to cater to the Indian market, and we work very closely with the programs which are being monitored by the Ministry. The demand in India is so strong that we have no capacity for the U.S.
Understood, sir. Thank you.
Thank you. Ladies and gentlemen, I request you to limit to two questions per participant and rejoin the queue for follow-up questions. The next question is from the line of Rehan Saiyyed from Trinetra Asset Managers. Please go ahead.
Yes, good morning to everyone and thanks for giving me the opportunity. Sir, I have two questions from the PLL side. First of all, this company has achieved a 15.5% PAT margin this quarter. How sustainable do you believe this margin profile is? Yeah, right now I'm audible now.
Yeah, just move a little away from the phone and you can talk, please.
Okay. Now the company has achieved a 16.5% patch margin this quarter. How sustainable do you believe that margin profile is given the rising depreciation of consumption? Do you see you can maintain it moving forward?
See, I think Rehan, thank you for the question. You know, in terms of profitability, you know, when you look at the PAT number there are too many levers in terms of, you know, EBITDA obviously and then depreciation, interest, and tax. On an ongoing basis there are a number of adjustments in all these parameters. For example, if you see even this quarter, the depreciation has come down, interest has come down, tax has come down, and there are very good reasons for that and they will keep on. These changes will keep on happening on a quarter-on-quarter basis. I think the key metric for us that we look at is with the margin, which is how we evaluate our order book and all the pipeline discussions with the clients.
There I'm happy to say that our EBITDA margin that we have in our order book is pretty visible and attractive along the lines of what you see currently in terms of the PAT margin itself. There'll be minor tweaks going forward because the depreciation rate, for example, as we go forward there'll be more drawdown on debt because of expansion of a new cell and module capacity. As the debt gets drawn down, there will be more debt cost and that will kind of take away something from the PAT margin. Similarly, the tax rate is dependent on the mix between our manufacturing business, the project business, inventory valuation, et cetera. I think because of that there'll be some minor tweaks in the tax rate. Overall, the margin is very stable and attractive.
Okay, just clarifying that you are f or telling that if you have focus on the EBIT margin.
Yes, that's correct.
Okay. The second question around the order book, we have mentioned that order book is at 100% domestic exposure. Given that almost all orders are India focused, how are you telling to re-enter or export, especially with the growing global departure trade policies? Is there any sort?
You're not audible.
Okay, am I audible now?
Yeah, yeah.
I'm asking regarding the order book. Is INR 86,000 million, right now. Is the policy exposures isn't almost all orders for India profile. How are you planning to reenter on scale exports, especially with growing global demand? Is there any plan the internal team to focus on exports also?
No. What did you say? How are we going to?
Scale in export market? Is there any demand on that side?
Yes, as we just answered the last question, we do not have capacities to sell into the export market. Our capacities are all sold out for the Indian market.
Okay, I'm clarifying that. Is there any, is t here any demand that we have focusing for export for grade power. That's what I'm talking about.
Yeah, there is a strong demand from the export market, but we don't have capacities as of now.
Okay. As a last bookkeeping session, sir, can you please tell me what is the CAPEX plan, the quarter and for FY 2026, FY 2027?
On the CAPEX plan, I think we have been very clear in our presentation that we have accelerated our BSS and inverter lines, which will now come in Q1 of FY 2027, and our wafer manufacturing, our 4.8 GW cell and module. All that is available in the presentation. Most of them are coming up in Q1 FY 2027, and I think something in Q2 FY 2027.
Correct. Okay, thank you, sir. Thanks for answering the question.
Thank you. The next question is from the line of Shivam Patel from PL Capital. Please go ahead.
Yeah, thank you for the opportunity. Just a clarification on revenue mix by business which was had in the PPT. It has same for the past quarter. How can we read those updated numbers? You are the only version I have.
Sorry, could you repeat that r evenue mix?
For the revenue mix by business which was shared in the PPT, it has changed for past quarter. How can we read those updated numbers?
Yeah, you see there is an increase in the module sales and that is because our 1.4 GW of module line got commissioned on 16th of May. There is certain amount of production of module which has got added to our production line. You see a 1% drop in the cell revenue which is also because of annual maintenance of the lines in the start of the quarter.
Okay. Okay. Thank you sir. All the best.
Thank you.
Thank you.
Thank you. The next question is from the line of Deepak Krishnan from Kotak Institutional Equities. Please go ahead.
Hi Chiranjeev. Am I audible?
Hi, yes, you're audible.
Yes, just more of a strategic question. Just wanted to get your take on, you know, building versus mixed. How do you kind of see this? You know there are lines available at depreciated source globally. Is there a chance that, you know, Premier Energies would do that to accelerate its capacity additions and, you know, what are their views? We've also seen some players commission at a shorter period of time versus, you know, our initial lines were two years plus. Now it's 18 months-21 months for the remaining cell lines. How do you see this in terms of, you know, Premier positioning itself for this?
Yeah, so at Premier as a company we would always invest in advanced technologies and the latest equipment. We would never look at depreciated second-hand lines. If you meant in Southeast Asia or in China, we would not want to foray into such an idea because these are equipment which are getting new upgrades every quarter. We need to time it in such a way that we are not investing in an old technology. The majority of the lines which are available in Southeast Asia, China monopoly, which is again a technology which is phasing out, and getting in mono PERC lines and upgrading them is not the best way to get the high efficiency or have a leadership position on the efficiency plant. The other aspect of this is it's not the equipment which takes time for the cell lines to set up.
The equipment is available within six to eight months. The problem is when you have to start from the ground, the building, the utilities which have to be made in India. It's impossible to get utilities from these depreciated lines in Southeast Asia or in China because those utilities have been built to suit those local requirements. I think we as a company would not look at this aspect at all. We would want to build high-class state-of-the-art lines and build banks which will give the highest efficiency in terms of value to the customer.
Sure. Maybe just wanted to understand, let's say look at this particular quarter. The incremental sales have happened at very low margins. If I look at the incremental EBITDA jump, is that all a function of incremental sales have been ALLM and non-DCR chains because we are capacity constrained and that mix should ideally improve in coming quarters. Maybe just a follow up on the question the previous participant asked. Basically your cell and revenue percentages for the previous quarters have been restated in the presentation. Any particular factor that is driving that? The Q4 number that was there in the Q4 presentation and this presentation do not match, similarly for some of the other quarters. Any factor that is driving that? In mix of it, it looks like all the incremental sales have been at 10% margin. Looks like everything has to be ALMM.
That should sort of rectify as we add the cell capacity. What stage are we in terms of stabilizing the 1.2 GW line? Is it in full production already this quarter?
The line is not in full production. We have commissioned the line and started the stabilization process. We expect to achieve 25% and above efficiency sometime in the end of August or first week of September. There would be a contribution coming in from cell lines starting end of August or first week of September. Once lines stabilize, then, you know, looking at the deep knowledge we have on running these lines, they generally work consistently. In terms of the EBITDA and past margins, you're talking the EBITDA margin went down, you know, mostly because of depreciation. We had upgraded some of our module lines in the last quarter. And also the, Vinay you want to.
I will take this. Deepak, I presume you're looking at slide number 25, is that right?
Yes.
Yeah. I think what you see is that the operating EBITDA margin over the last two quarters has gone from 32.6%- 30.1%. I think here what has happened is that the underlying, the core EBITDA on the sales of the business has actually remained static at the same old levels. However, during this quarter there was a very sharp reduction in prices for sales and wafers in China. Because we maintain a large inventory of these products with us, we had to mark down the prices that business inventory will pay because our inventory pricing policy is cost price or current price, the lower of the two. It is only because of reduction in the inventory valuation, which basically went through to the cost of goods sold line, which resulted in a reduction in the EBITDA margin that you see on the slide.
Sure, Vinay, maybe on slide 27 itself, the Q4 number, you know, the percentage for sale is different in this versus the previous call.
Sorry to interrupt.
No, just a follow-up on depth on what he was asked. Slide 27, if I just, if I look at it, you know, the cell percentage this quarter for Q3, 33% versus the presentation at that time, so it's 35%. For his data it was 33%. Similarly, the Q4 number has been restated similar to what the previous participant asked. The percentage of cell and module, you know, on a quarterly basis. The historical numbers are getting changed. Any reason how should we sort of read that?
Just to clarify, Deepak, we are looking at slide number 26. Right.
The revenue by mixed business. The right bar chart, if I look at Q4 number, it is 70, 24, and 6, you know, versus the same presentation last quarter was 74, 23, and 3. Similarly, the 32 number has also been restated.
Okay, your question is about the restatement of the historic numbers.
Yes, of cell and module and EPC, the mix is, you know, being changed.
Deepak, just give me a minute. I'm just checking it.
Yeah, no worries. You can go on to the next participant. I'll join more on the queue so that you can come back.
Sure, we'll come back to you. Thanks.
Thank you. The next question is from the line of Nidhi Shah from ICICI Securities. Please go ahead.
Yes, thank you so much for taking my question. My first question is on the utilizations that we have given in slide number 24. When we take the cell and module utilization, on what capacity are we taking this utilization for Q1, for cells and modules? Are we doing it on the effective capacity, the nameplate capacity, and what would be that number?
It is on effective capacity, and generally the number is, you know, the main paid capacity, less 10%, is the effective capacity. This is on that effective capacity.
All right. Thank you. Another thing that I wanted to know is how are you seeing the trend in the pricing of the modules? Are you seeing that there is a drop in realization not only for Q1 but also for the upcoming year? Where do you see the prices moving?
If you're looking at the AMM non-DCR market, there we are seeing prices going up because polysilicon prices and ingot deposit prices in China have gone up. We have seen increase in the sale prices, and if you're talking about the margins, generally it's a cost for us. We don't have any.
Lastly, on the custom scheme, what is your outlook on the custom scheme, especially the component B and the component C? Are you seeing that installations are rising in the upcoming quarters? Are there any hindrances in those projects that are affecting installations?
No. I think in terms of the custom tenders, the big volumes are expected to come in the next year, particularly for the ground mounted projects. As you can see from the data that we have shown in our presentation, the number of pump installations, which is basically shown as upgrade on slide number 13, has actually come down. That is because bulk of the focus in terms of the scheme is now on grid connected ground mounted projects. Those tenders and auction evolutions happened over the last one year or so, and hence we expect a major pickup in execution in the course of next one year.
All right, thank you so much. Those were my questions.
Thank you. The next question is from the line of.
Can you just answer Deepak's question on slide number 26?
Hi Deepak. What has happened in terms of slide 26 is that historically the data that we had given was only for the domestic market. Actually, apologies, it was not complete. Now we have adjusted that data for the domestic plus export, reflecting our total business mix, and hence there has been a re-reporting of all the historic numbers.
Deepak are you there?
No sir, he's not.
Yeah, okay.
Okay sir, the next question is from the line of Sujit Jain from BLIC. Please go ahead.
I hope I'm audible. In terms of the.
Yes, sir.
Okay, great. In terms of the BSS that you've put out on your presentation, who are the suppliers currently in India? When do you start bidding and which are the technical partners that you are talking to? Do you see this deadline of June 26th? You will be able to come up with your facilities.
June 26th has got nothing to do with BSS. That is for the solar cell mandatory use of Indian made cells. To answer your question on BSS, we are investing in a cell to pack in a containerized solution line. We have onboarded an experienced team and the line should be commissioned by Q1 FY 2027. We are talking to various technology suppliers on the cell side, that is the battery cell which we're going to import from China. We have not concluded on the technology part as we speak today. In terms of customers whom we're going to sell this to, it is mostly the developers who have bid and run projects in the IPP space. Who is our target customer to supply the BSS containerized solution.
Does that answer your question? In terms of the timeline, I'm not clear. June 26th is what your presentation says, 6 GW hours?
Yes, that's correct. That is what Chiranjeev just said. Quarter one of FY 2027 is when we expect this capacity to come online and start selling.
In terms of the order book or booking of the order, in terms of timelines, when do you actually get into that process?
As we said, we've just hired an experienced team and we're adding to the sales team also over there. We have simultaneously begun discussions with our IPP customers who are winning many of these hybrid or solar plus storage projects. Given that our product is not expected to come out for another eight to nine months, we would expect order conversion somewhere towards the end of the year.
Sure. Who are the suppliers currently, and what capacities in India currently other players would be having? That's my last question. Thank you.
Yeah, sure. I think at this point in time the capacity in India is very, very small. Most customers are looking to import completely packaged solutions from other countries. Over a period of time, particularly given the government's focus on indigenization, this entire value chain is expected to shift to India.
Great, thanks.
Thank you. The next question is from the line of Bala Murali Krishna from Oman Investment Advisors. Please go ahead.
Good morning guys. Do we have any incremental revenue f rom the recent capacity additions in this quarter?
Sorry, could you be a little louder, Bala?
I got your question. Basically, our main module line got commissioned in May, and we had part of the production coming through reflected in the numbers. To that end, yes, there are some incremental revenues in the business. On the cell line, the commercial production has just begun, so that is not shown in the quarter at all.
Going forward in this next quarter or third quarter, how much incremental revenue can we expect from these two additions? I think there is no further capacity coming in this year.
I think it is very simple math, Bala. I mean the total capacity that is coming online is 1.4 GW modules and 1.2 GW cell. Effectively, if you take it at about 75% capacity utilization and the prices that are currently in the market, they will give you the expected uptick in the revenue numbers. What I would say though is that while the module line is now currently nearly operating at the full capacity, the cell line will take some time to ramp up and get the right efficiency, which we expect to happen over the course of this quarter. I think this quarter you will still see only part of the uptick coming through, with the balance coming in in the next quarter.
Okay, and the gross margin k ind of.
Sorry. Join the queue for the follow-up question. Thank you. The next question is from the line of Anupam Goswami from SUD Life. Please go ahead.
Sir, can you give us a hint on what's our DCR content this time, and how are we going to ramp up or where do we see the mix going forward? Also, sir, on the capacity that is coming on the cell, the industry and our long term strategy to say. Right now we are enjoying high DCR prices. Now when the capacity comes, what's our view and strategies on that?
Anupam, sorry, can you repeat the first part of the question? You said something about DCR content.
Yes. DCR mix this time, where are we at h ow much mix, and going forward, where do you see that ramping up and how fast ramping up?
In terms of the. DCR versus the non-DCR mix in our business, you know, we don't reveal these numbers. Now, in terms of the demand, you know, the DCR demand is obviously going up steadily. Given the shift, given the introduction of ALMM2. O ur estimate is that the current run rate of demand for DCR modules is about 15 GW per annum. That is basically the Surya Ghar Yojana , and the PSU scheme. From early next year onwards, we will see the open access demand coming through because projects commissioned by June 2026 will have to procure cells and modules made in India. There, on early 2026 onwards, we expect the demand run rate to increase to about 25 GW. Somewhere towards the end of the year, early 2027, the entire market, which is about 40 GW-4 5 GW, will shift towards DCR.
Our sales mix will basically largely reflect the changing mix of the market.
Just to answer your question on the capacity, we are closely monitoring the situation and our view remains that the market is expected to remain favorable with strong demand. It's worth quoting that a recent report of BNEF projects annual deployment in India to go up from the present 40 GW to 125 GW per annum in the next 10 years. We feel it's a difficult business for new entrants. New capacity usually takes much longer than expected to come online and ramp up. Moreover, the IPP clients, the developers in India, are very selective with the preference for integrated supplies, offering scale, advanced technology, proven track record, and bankability. We believe that we enjoy a strong competitive position on all these parameters.
Just one, if I can squeeze. So a little on the long term, when we see this year pricing coming down with the sales or the demand also subsiding, then what's our strategy to diversify out of India or in the product lines?
I don't think that the demand is looking to be coming down. What we are seeing is the demand is going to go up consistently, as I just mentioned, to about 125 GW per annum in the next 10 years. Even if you look at 125 GW demand, which means that the capacity of manufacturing should be at least about 170 GW- 175 GW in India over the next 10 years. We don't see that the demand is coming down.
Equally, at the same time, in parallel to that, you already know what is our expansion and vertical integration strategy. We are going backwards into inwards and wafers and entering new businesses like batteries, inverters, and even making ancillary process products like aluminum frame. While the module business will continue to grow, as Chiranjeev said, there will be additional revenue streams coming from all these new businesses, and that will provide us with the growth that is expected in the business.
Thank you so much. I'll turn back in a few minutes.
Thank you. The next question is from the line of Aman Jain from Boston. Please go ahead.
Hi, I'm audible.
Yes, Aman, you are.
Hello. Yes, hi. Thank you for taking my question. Just one question. If you look at depreciation number, it has declined Q-on-Q even when w e are adding new assets. I just wanted to check with you, why is that?
I think I had answered this question sometime back, that last. Quarter, we had an increased depreciation because. We upgraded our solar module line stringers from the old technology to the latest technology, and hence the depreciation was slightly higher in the last quarter compared to this quarter.
All right, all right, got it. Thank you.
Thank you. The next question is from the line of Mayur Patel from 360 ONE Asset. Please go ahead.
Congratulations Chiranjeev and the team for robust set of numbers. Just give us some idea about the. Current pricing in the market on both m odule and DCR sales side.
Pricing, Mayur, is fairly constant. It would actually see a slight increase due to prices in China going up o n the non-DCR side. W e would see an increase because solar cell prices in China in the last couple of weeks have gone up by almost 30%, and this is almost close to $0.01, which is incremental size in the sale price from China. It doesn't affect our orders with our customers because our contracts are generally passed through with variable prices. Prices in the market are fairly stable, and our order book is going into almost 12 months to 15 months, which our contractors are signed. We don't see any significant change in market.
Okay, so it's around $0.16 the sales for the DCR market currently.
DCR market sell prices range between $0.14 to $0.15 for an average of about $0.15, I would say.
Got it. Can you have any color on the pipeline of new order booking? Is it possible to share anything? It would be helpful.
As we speak today, we have signed significantly large orders post 30th June, and we are very, very clear on our internal policy on the order book. It has to be a fully secured, signed order book. What we disclose in terms of pipeline, we have a very strong pipeline going into FY 2027. The number is fairly large. We generally refrain from giving numbers as a future guidance. If you align with the capacities that we are putting up, which are coming up in June 2026, the pipeline is significantly larger compared to the volumes that the factories that we are setting up.
Got it. Thanks. All the best.
Thank you.
Thank you. The next question is from the line of Nitin Arora from Axis Mutual Fund. Please go ahead.
Hi sir. Thanks for taking my question. You also said that there has been volatility in the cell prices. We saw that in the last two months. Now we are seeing even wafer prices, cell prices going very up. Very sharp move what we have seen in the last two, three months.
Can you throw some light on how the. Indian IPP thinking about this in terms of clocking prices now? Because I think in the previous question you said you're seeing very large pipeline. Is it like the IPPs now are going ahead and closing the orders? If you can throw some light because you deal with them, just if you can throw some. Light on that aspect.
I think you are spot on on this, Nitin. Because the general tendency when taxes are going up, you want to quickly lock up the deals, and then they're dropping, you expect that they'll drop further and you keep waiting. I think you're right on that. We are seeing a strong uptake of IPPs wanting to close quickly now. This will of course show up i n our next quarterly results.
Okay. All right. Got your point, sir. Thank you.
Thank you. The next question is from the line of Sarang Joglekar from Vimana Capital. Please go ahead.
Thanks for the opportunity. I'm looking at slide 14 where you have given the whole demand scenario. Can you break it up into various sources, like how much is coming from each source annually, say the main tendering agencies, NTPC, and all the state discom, corporate rooftop, and the household rooftop? How much demand is coming, if you think?
Sure, Sarang. J ust to clarify, you're looking at the slide number 14 with the title Demand Visibility for DCR Module.
Yeah. Yeah. I just wanted understanding on the entire, not just DCR, non- DCR as well.
Sure. I think slide 14 is kind of self-explanatory in a way. The Suyoshina demand is obviously ultimately coming from the household wherein the demand is aggregated by the distributors and the local installers. Hence, our customer is typically these entities. In the PM Kusum Yojana, you know that cutom scheme has multiple components comprising both solar pumps as well as ground mounted projects. Solar pumps obviously have these large companies who are all the customers. For the ground mounted project, it is the same IPP customers that we see in the normal utility scale business. The CPSU scheme is basically all PSU companies like NPPC, NSPC, SECI, et cetera. These are mostly tender-driven procurements and we have historically had a no structure in this market.
The corporate market is a mix of the captive consumers themselves, for example the steel companies, IT companies, et cetera, and the IPP who are setting up these projects for the end customers. Finally, the utility scale solar is basically all the large private as well as the public sector. That is basically the typical customer profile in each of these markets. I would say from our business point of view, we have historically had a much larger presence in the private IPP business. We've done some public sector business in the past, although that business is a much smaller share of our business right now. One change that we are making going forward is that we want to scale up our presence in the rooftop solar market, particularly with demand going exceptionally in the residential segment.
There we are making a lot of effort to enlarge our distribution base and spend more on marketing and branding efforts targeted at the end consumer.
Got it. Follow up question.
Sure.
You said that annual demand would be a round 40GW, 45 GW modules. If you s ee the ALMM the capacity enlisted is already at about 90 GW and you still are maintaining margin. Just trying to understand, if the capacity is already there, why isn't there still pressure on pricing?
Yeah, I think we have answered this earlier also that, you know, the ALMM format is such that even players who have 300 MW, 500 MW of annual capacity, which are supposed to operate 24/ 7, the capacity is on the basis of 24 / 7 operations. Many of these lines do not operate 24 / 7. If you look at the capacity utilization, you have large capacities but utilization is quite low. We as a company have always thought of growing with the integration of cells and inwards data. You see higher capacity utilizations in our case and the 90 GW, w hat you see on the ALMM is not what is all operational, not what is all automated. Many of the lines are semi-automated. An IP developer would not buy from such lines. I think that should answer your question.
In your estimate, how much is the.
I request you to rejoin the queue for the follow up question.
Yeah, no, that was the last one.
Thank you. The next question is from the line of Nikhil Somani from Nexa Investment Advisors. Please go ahead.
Hi. Just taking a cue from the previous participant, trying to understand the demand-supply, especially on the module side. From what we understand, on the module side there is a demand of 40 GW. The industry is expected to go to, let's say, 160 GW to 170 GW nameplate capacity in the next couple of years as against 92 GW currently, which the previous participant alluded to. Now, on 160 GW to 170 GW, even at a 60% to 70% utilization, we get to 100 GW to 120 GW of available supply. Again, let's say two years down the line, a demand of 50 GW. Optically, it still looks like we will end up in a high oversupply situation in the next two to three years. How do you look at this?
Now let me explain this to you. I think we are missing the biggest point here that starting June 26th, even though you have 100 GW of module capacity, you would not be able to sell those modules with a preferred cell capacity because you have used Indian made cells. The limitation factor is not the module, but it is the cell. Today's cell capacity in India is around 20 GW to 25 GW, and this has to grow to about 150 GW as the demand increases. We foresee that the demand supply situation would continue to be as it is for at least two to three years. We don't see that there will be an overcapacity over the next two to three years.
Effectively, sir, what you're saying is for an integrated player like us, probably given the fact we have a sizable cell capacity, it shouldn't impact. For a fringe player or a player who's just into module right now and not even integrated at the cell level, things could go worse.
They would be impacted big time if they don't have cells.
Understood.
If we tied up with cell manufacturer who could supply themselves.
Got it. On the capacity utilization for the module line, which has steadily been rising for us from 69% nine months back to 77% right now, I think you earlier mentioned that the nameplate capacity is 10% less and the effective capacity is, let's say, 90% of that. Right now we are operating at 77% of effective capacity, which is essentially 70% of the nameplate capacity. Would it be fair to assume that we are operating at fairly advanced capacity utilizations and not much scope of improving the utilization there?
Yes, you're right because in module line you're making different kind of modules of different wattages for customers. We would be making 580 GW modules for a customer A and a 615 GW- 620 GW for a customer B. That's not the case in a cell line. You just make one single product continuously. In module lines we don't expect utilization capacity to go beyond around 80% of the effective, 80% effect.
Got it? Got it. Okay, thank you.
Thank you. The next question is from the line of Bala subramanian from Arihant Capital. Please go ahead.
Good morning sir. Thank you so much for the opportunity. Sir, my first question regarding the industry, I hear the Moop Park capacities, it's anywhere between 30 GW right now and right now the industry itself transitioning to TOPCon. I just want to happen existing capacities, whether the real demand is there for Moop Park and if you could share that split between Moop Park , TOPCon and RCIT in the industry in India and how these Chinese transition happening. Because I heard some of the players are importing secondhand TOPCon machines they installed in India. How this transition happening on the technology side? Because if you look at in 2002, 2015 polycrystalline technologies were there.
It's almost 15 years from 2015 to 2025, 2026, almost 10, 11 years, like the people are talking about post 2030 kit will be in the place other how this transition happening and the timeline is also reducing. If you could share some details about the industry and how this transition is happening.
Yeah. Let's start with China. In China, majority of the technology share is with TOPCon. We are seeing that the SAP is not really growing in China. It's from TOPCon, and they don't map from TOPCon to TOPCon b ack on that, and Gandham is all very clear, clearly visible with majority of these players working on TOPCon technology. If you talk about India, we have about 20 GW-2 5 GW of capacity today. Out of that, I would say about 70% is Mono Park c ould be TOPCon and thin film. Right. Any new line coming up would be TOPCon. To answer your question on getting secondhand TOPCon like China is something we do not think is the right decision because most of these lines would be.
Two to three years old and the e fficiency you would get from these lines would be almost 0.5% lower than the latest technology lines. We as a company do not believe in, you know, investing into two t o three-year-old lines.
Sorry to interrupt, but your voice is breaking.
All right. Am I clear now?
Yes sir.
Yeah, I was telling that we as a company would not recommend or would want to protect old technology lines from China, because the efficiency you would get out of the code materially after the measurement today.
Okay sir, quick question about the recycling. Are we planning any recycling plant for like solar modules and all that we can able to reuse it.
Yeah. Hi Bala, this is Vinay here. In terms of recycling, you know we're very, very keen to ensure that. We have access to a high technology, completely environmentally compliant recycling source. To that end, we are in the process of identifying some partners and entering into strategic ties with them. We don't see it as a core activity for ourselves, so we are not going to invest and develop these plants ourselves.
Got it, sir. Thank you.
Thank you. The next question is from the line of Apoorva from IIFL Capital. Please go ahead.
Hi, thank you so much for the opportunity. Sir, wanted to. Hi. Wanted to know your thoughts on this U.S. anti dumping duty. There was some news flow around it. How do you see that panning out? In case it gets implemented? Do you see it having an impact on the Indian market demand supply dynamics as well, given that it will essentially close the U.S. export markets?
Yeah. Hi. Vinay. I think investigation has just begun and there is a pretty long period for these investigations to get completed and any duty to get effective. In general, I would say the two main grounds for any such duty are, one, the producers selling the goods at below cost, which we know is definitely not the case in India. The second main ground is often the companies getting subsidies from the government. We believe the case for this is kind of not very strong. Definitely the Indian companies are not selling any products below their cost level. In general, I think the timeline for this investigation is incomplete and it is very hard for us to assess what is the viability of exports to the U.S. market. We also have to remember that there are a couple of other issues in relation to the U.S.
market, mainly the outcome of the pending U.S.-India trade treaty as well as the other levies that the U.S. government is proposing against big nations or other countries buying Russian crude, et cetera. In general, there is quite a lot of unknowns in relation to the U.S. market. Hence, for the time being at least, because of that uncertainty, we are not placing much value on the potential of the U.S. market until all these issues become clearer.
This company is getting subsidy from government, which sort of leaves them open for a potential duty action from U.S. Is my understanding correct?
I think if you look at t hese subsidies, they are mostly at the cell level. Now, on the cell level you could argue that there is no case for the U.S. companies to support any duty because the U.S. cell capacity is actually very, very limited in relation to the domestic demand. The cell capacity today is only about 5 GW in the U.S. and all those cell manufacturers are actually sold out in the U.S., so for them to claim injury because of any cheap or subsidized imports from India is not actually a legitimate argument. I think that is why I say that we don't believe that there's any kind of solid ground for this investigation. Of course, we have to wait until the outcome is known. Final point is that our reliance on the export market is next to nil and hence, we are protected irrespective of the outcome of this investigation.
Yeah, understood. I think fair enough. Another question, I think, and I would l ove to have some color.
Sorry to interrupt, but I request.
Ma'am, this is my second question. You're allowed two for participants.
Please, thanks.
Yeah, just wanted to get some color. From you on how is the Indian market discovering pricing for cells and modules? Is it based or still based on the Chinese pricing, or is the Indian market now deep enough to have its own price discovery?
I think we always had our own price discovery. It was never related to the Chinese prices. If you see, Chinese have been dumping and losing money quarter on quarter, and that is the reason why the association reached out to the government for support, and they have increased prices by about 30% at cell level and substantial increase in vapor and polysilicon. We never had any comparison to prices in China because prices in China were varying by over 70%- 80% over a year. It's very difficult to compare with.
Yes, I understand that from a floor pricing perspective, yes, that was the case. Now, given that the Chinese are increasing pricing, do you think it will percolate to the pricing of Indian cells and modules as well, irrespective of the input cost? Can the prices go more than the input cost increase?
No, I think if we have a variable contract, whatever increase for non-DCR module gets passed on for a DCR module, whatever increase in the wafer gets passed on.
See Apoorva, the Indian markets ecosystem is a ctually developing and maturing rapidly as you can see with the rising capacities both for cells and modules. Second, over the next one to two years, one, one and a half years, we will see a complete transition to India made products because of ALMM. Because of that, there is really no connection between what is happening in China and what is happening in India. The Indian market, as you I think were trying to say, there is a completely independent price discovery in the Indian market depending on local demand, particularly given for DCR cells and modules and local supply.
Thank you so much.
Thank you. The next question is from the line of Amit Mahawar from UBS. Please go ahead.
Sorry, just two quick questions. First is our decision. If you see the business mix and business model, we definitely skew towards the utility and CNI in domestic market exports and retail, rooftop. T o some extent y ou answered the question about exports, but still both these segments on a five year basis, that's going to be an important share of the total TAM for you. Any thoughts about these two direction for us? Second question is more, s tarting next year, if things are on track, we will see a potential shortage in local cell capacities. Where do you think on a three year basis, say on FY 2025 to FY 2028, the cell demand supply will move? Thank you.
On the export side, answer on retail, we are focused. We have a channel sales distribution network, and we are supplying, I would say, almost 60%- 70% of our DCR manufacturing into the rooftop segment and about 35%- 40% to the cushion. There is a very clear focus from the ministry and from the company to apply as much as we can to the rooftop segment. To answer your question on when do we estimate that cell capacity would be enough, my take would be at least about three years where you have enough cell capacity to cater to local demand. It is subjective as to how the demand would shape up. If the demand shapes up much faster, then of course this could go even longer. Given the fact that it's not easy to set up cell lines, this would take about two years.
Correct. Thank you.
Does that answer your question on it?
Yes, sir. Thank you.
Thank you. The next question is from the line of Subramaniam Yadav from SBI Life Insurance. Please go ahead.
Thank you, sir, for taking this. Thank you. Second thing, I just wanted to ask is on the inventory front, what is the write-off we have taken this quarter, and incrementally, as I understand that in the order book we won't have any impact because we have pass through. For the new order, what we are going to take from the utility, are we able to pass on that incremental increase in the wafer of the prices.
Yes, for the wafer and cell we do pass on. For the provision we have made, as Vinay said, as a policy, we value our raw material stock at either the cost or the net realizable value. In the last quarter, prices have gone down, which is why, as a prudent governance practice and accounting standards, we created this provision. This keeps changing quarter on quarter. If prices go up, we would go back to our purchase cost. It would not be at the market prices.
Okay, and what about it is super minim high?
There is nothing there that is a lot for the business. It is just an accounting entry. Ultimately, this inventory is held on account of the customers and any price increase or decrease is passed on to them. To that end, our position in terms of margins and profits is completely protected.
Yeah, understood sir. What about the incremental thing? Because 30% increase in the raw material cost, are the utilities agreed to such increasing price up in the future if this?
They have no choice. Because they have to buy cells and they are dependent on China. If prices go up, they have to pay the cost of the cell that China is selling. This is the reason why we need to be having a very strong ecosystem of manufacturing in India, where a developer who bids for projects gets a fairly stable supply chain security rather than faces volatility. This is passed on to the customer.
Okay, thank you. Thank you very much.
Thank you. The next question is from the line of Kunal Shah from DAM Capital. Please go ahead.
Yeah, hi sir. Am I audible?
Yes.
Yeah, thanks for taking my question. Two from my side. Now, recently one of the leading solar EPC companies mentioned about a bit of slowdown in the tendering activity because of confusion around the ALMM timeline as one of the reasons, and that there is less confidence on India becoming self-sufficient on cell by June 26th. Could you just throw some light here, and do you see slippage of timelines here in terms of implementation?
No. Kunal, when you say slowdown in tender activity, you are talking about tender activities issuance. I presume you're right, there is a definite slowdown there. Bear in mind that we have more than 130 GW of solar projects which have been tendered and auctioned and are currently in the pipeline. There's a small share of that where the PPA capacities have still not been tied up with the ultimate discom customers. I think this is a very conscious move by the government to basically completely tie up the old auctions in terms of PPAs and then move on to new auctions. We typically see this kind of cyclical pattern in the sector where we see a lot of auctions which the market takes time to absorb, followed by a slight slowdown in new tenders and followed by an uptick in tenders again.
I think it is all very kind of natural and normal activity. The good news there is that I think three, four months ago we were talking about more than 40 GW of projects being held up with PPAs not being signed up. A lot of those PPAs are now, particularly for renewable and hybrid projects, being tied up and the backlog is being cleared up. We should shortly see an uptick in the tendering activity, I think, from next quarter onward.
Just to add, the June 26th deadline would not affect the projects which have been tendered recently because they have 18 months of timeline to complete these projects. We feel that the demand from the present levels going up over the next two to three years is going to be quite stable and in sync with the capacities which are available. We don't see overcapacity. What will happen from June 26th is the CMI segment. They'll have to switch over to the ALMM list to compliance. The tenders which have been bid have 18 months and they would look at buying modules at least 12 months post the tendering date or post the PPA signing date.
Understood. This is very helpful. Second, on the CapEx towards your ended pay for project. Right. Given it's a large CapEx now, could you just help? Because on the understanding bit, would we need some sort of policy tailwind here in terms of DCI benefits, et cetera, and are we seeing any developments there? Also, I don't know if you have clarified this on the previous calls, but could you just help the cost of production of wafers and how competitive these would be versus, let's say, Chinese imports?
Yeah, sure, Kunal. I think in terms of the policy, the good news there is that we are in active discussions with the government, which is trying to assess the market landscape and is considering a very comprehensive policy combining incentives, duties, and ALMM kind of measures. It is in anticipation of that policy that we have announced, for the time being, only a 2 GW wafer plant, and most of the development of the remaining 8 GGW or 10 GW capacity is going to be back ended towards the end of FY 2027, FY 2028. That will be after we have more clarity on the policy front. In terms of the cost of manufacturing ingots and wafers, I think it's kind of too early to say because the local ecosystem is not really developed.
Based on all the discussions we have had, once we have scale and we can develop domestic vendors for some of these products, we believe that we can reduce any cost delta over the true cost of Chinese manufacturing to a very, very manageable level.
This is extremely helpful. Thanks a lot, sir.
Thank you very much. Ladies and gentlemen, we'll take this as the last question for today. I would now like to hand the conference over to management for closing comments.
Thank you. I think overall there is a little bit of volatility in the market in relation to, for example, supply of raw materials and prices in China, the U.S. duty structure, et cetera. From our point of view, we have been very, very focused, one, on making sure that our profitability remains intact. Second, that execution of a new project which is going to more than double our capacity and impact on revenues and profits to make sure that the execution remains on track and on cost. That is where we are focusing on. As said, our main objective here is to be one of the leading players in the entire manufacturing space with scale, vertical integration, and latest technology. We believe that given the initiatives that we are undertaking, we are well poised to remain at the forefront of the sector.
With growing demand and a growing business, I think we can expect very good results from the company in the coming years. Thank you all.
Thank you.
Thank you very much on behalf of ICICI Securities Limited, t hat concludes this conference. Thank you for joining us, and you may now disconnect your lines.