Ladies and gentlemen, good day and welcome to the Fujiyama Power Systems Q2 FY 2027 earning conference call hosted by Motilal Oswal Financial Services Limited. 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Yash from Motilal Oswal Financial Services Limited. Thank you, and over to you, sir.
Thank you. On the call today, we have the management team being represented by Mr. Pawan Kumar Garg, Chairman and Joint Managing Director, Mr. Yogesh Dua, CEO and Joint Managing Director, and Mr. Prashant Gupta, CFO. We will begin the call with key thoughts from the management team. Thereafter, we will open the floor for a Q&A session. I would now like to request the management to share their perspective on the performance of the company. Thank you, and over to you, sir.
Good afternoon, everyone, and thank you for joining Fujiyama earning call for second quarter and first half of FY 2027. With me today, Mr. Yogesh Dua, our CEO and Joint Managing Director, and Mr. Prashant Gupta, our CFO. I would like to use my time a little bit differently today. The numbers are in the presentation, and Prashant will take you through them. I want to talk about what kind of company Fujiyama is and why we believe this business keeps compounding. I also want to answer few FAQ, the dip in margin this quarter and increase in inventory. Let us discuss half year in a short. In the first six months of FY 2027, Fujiyama did INR 2,652 crore of revenue. That is practically similar to the INR 2,655 crore we did in whole year of FY 2026.
EBITDA for the half year is INR 478 crore, up 129%, and normalized PAT after tax, profit after tax is INR 2 98 crore up 128%. In Q2, revenue grew 130% to INR 1,307 crore and EBITDA grew 116% to INR 223 crore. We can say double the business in a year during this period. We have done that while putting money into plant, people, and reaching for next targets. Let us discuss who we are. Sometimes we are grouped with solar module manufacturers. We are not pure solar module company. Fujiyama is consumer company in household energy. More than 85% of our revenue comes from retail, household, and small businesses who buy from a dealer in their own town.
Fujiyama is a listed company in India that is built exclusively around the rooftop solar solutions for retail customers and that also makes every core part of the system itself: solar cell, solar panel, inverter, and batteries. We do this across all three system types: on-grid, off-grid, and hybrid. Our range has a wide range of SKUs in different ranges from 40-watt panel to 120 kVA online UPS. Why does this matter? A household does not buy a panel, it buys an outcome, a lower electricity bill or power when the grid fails, or both. Each customer has a different requirement. For example, a family in Eastern U.P. needs backup above everything else. A family in Gujarat wants to export power to the grid. A shop in Madhya Pradesh wants both.
A company that makes all these types of systems can sell each of them the right solution through the same dealer with one brand, one warranty, and one service promise. That is our one-stop shop advantage, and it is very hard to copy. The business was built brick by brick. Our roots go back to 1996 when we started with inverter and UPS. We were selling off-grid solar in small towns of India long before the current subsidy existed. In the last five years alone, we have sold more than 1.4 million inverters, including about 4.5 lakh in FY 2026. Every one of those homes is a relationship for life. It will need batteries, panels, upgrades, and services. Let us discuss five strategic moats that are hard to replace. First moat, distribution and deep retail reach.
We have more than 10,200 channel partners, distributors, dealers, and exclusive UTL shops across more than 25 states, union territories. More of these relationships go back 15- 25 years. We are now going deeper into new states. On the map on page 18 in our presentation, we are covered in 13 states, growing in five and running special focus programs in four. 14 more states and UTs are still largely in front of us. In this half year, we added more than 100 distributors and more than 1,000 dealers. Odisha and Uttarakhand moved into the fully covered category. This expanding network provides unparalleled customer proximity in tier two and tier three markets, supporting rapid product delivery, installation, after-sales service. Our vision is to expand the number of channel partners in a single way. Second moat, service on the roof and R&D feedback loop.
The hardest part of this industry is not making panels. India today has far more module capacity. The hard part is mounting the systems on millions of roofs and keeping them working for 25 years. Fujiyama now has more than 1,000 on-roll service engineers, up from about 650 in March this year. They are our own employees, not outsourced, and they support dealers in person for on-sales and installation. Every complaint they log goes back to our 80% R&D engineers. That feedback loop is how we developed products such as our patented rMPPT hybrid inverter technology, as well as combo UPS and online PCUs. Third moat, technology that scales service, UTL AI. Serving millions of households across thousands of small towns is a data problem as much as a field problem.
Our board member, Mr. Sunil Kumar, an IIT Delhi alumni with more than 24 years in software development, including at Google, has guided our in-house team in building UTL AI. It is one platform that runs our sales, service, and dealer network through WhatsApp and voice chatbot, operating 24/7 in local languages. An intelligent service bot registers and resolves complaints around the clock. The platform also predicts which spare part each region will need, guides our service engineers to visit our dealers along with their routes, and uses data to pick up the next district or dealer to add. All of it is built in-house. In simple terms, it lets us grow sale and service quality without additional cost growing at the same pace. Fourth moat, backward integration, regulatory compliance, and data security.
Today, we have manufacturing capacity of 1 GW of solar cell, 3.5 GW of solar panel, 4 GW of power electronics, 545 MWh of lithium-ion batteries. Inside our inverter, we make sheet metal cabinet, heat sink, wiring harness, transformers, and coils. We do our own PCB assembly, meaning EMS in-house. Inside our lithium-ion battery, we make our own BMS cards, communication boards, and busbars. In the first quarter, we raised our stake in Zayo Energy and Zayo Cables to 50%. In the next financial year, these companies have a plan to make frame, ribbon, junction box, and cable, and EVA sheet for solar module. This extensive backward integration insulates us from import price volatility, protects gross margin, and builds a cost moat. Furthermore, regulation is moving heavily in our favor.
Since August 2026, MNRE has required inverter suppliers under PM Surya Ghar to keep their app servers and data strictly in India, alongside mandatory M2M SIM data loggers. The Central Electricity Authority new cybersecurity regulations, July 2026, push the whole sector to the same way. We have confirmed our full compliance to MNRE. Our dongles, data loggers, and monitoring system are made in India, and our data sits in India, Indian servers. As new regulations strict unveil foreign hardware and cloud platform, our compliant domestic platform become a key competitive moat. Fifth moat, brand equity and dual brand strategy. We deploy a powerful dual brand strategy. Surya Kumar Yadav represents Fujiyama Solar, and Anil Kapoor represents UTL Solar. UTL carries close to three decades of trust in tier two, tier three India. Our panels carry 25 years performance warranty, and our on-grid inverters carry up to 10 years product warranty.
In a category where customer is buying promise that last decade, brand equity and warranty trust are core drivers of pricing power. Let us discuss capacity. What is coming next and why it adds to margin? In August, we commissioned 2 GW of power electronics facility at Ratlam. Ratlam now runs both solar panels, which started in May, and power electronics. Three more additions are coming. Lithium-ion battery at Ratlam. We have upsized our facility from 2 GWh to 3 GWh and expect it come online in coming quarter. That will take our lithium-ion capacity to 3.5 GWh. Tubular batteries at Hathras, Uttar Pradesh. A new 1 GW plant that replaces Bawal capacity lost in May fire is expected to be commissioned in coming quarter. TOPCon solar cell at Ratlam, 1.2 GW is on track for Q1 FY 2028. It will take our cell capacity to 2.2 GW.
We are pushing hard for an earlier launch. Adding TOPCon cells with existing PERC cell manufacturing will significantly enhance our efficiency and competitiveness to DCR market. The important point is each of these plants replaces something we buy from outside today or tomorrow. Since the Bawal fire, we have been buying tubular batteries from outside suppliers, and we buy every cell for every panel beyond our 1 GW capacity. Our lithium-ion requirement also exceeding our current in-house capacity. The demand for these products already exist in our own sales, so this new capacity adds to margin from its first unit. It does not have to find new customers. It replaces external purchases. Beyond this, we are evaluating ingot wafers ahead of ALMM List-III , which starts in June 2028, as well as sodium-ion or any other advanced chemistry battery.
We are also gaining experience in battery energy storage through 5 MW pilot at Dadri and planned 10 MW installation at Ratlam. Concerns, margin, and inventory. Let me take the two FAQ post our results and answer them directly. On margin, our EBITDA margin was 17.1% in Q2 against 18.9% in Q1. Though our gross margin is similar in both the quarter-on-quarter decline is mainly from seasonal softness, which is normal in rooftop solar industry, as absorption of operating fixed cost continues in quarter. Additionally, overhead rose because we staffed and ran the Ratlam facility before its full volume arrived. That is the cost of building ahead of demand. These overheads are largely fixed, so as Ratlam fills up, they get spread over much larger revenue base. Selling and distribution overheads also increased. Two more items are temporary. The first is Bawal fire.
Until Hathras starts, we buy tubular batteries from outside, which means lower margin. The second is deliberate front-loaded expansion in our sales, marketing, and service footprint across new states, reflecting the company's investment in brand visibility, including targeted campaigns, especially tier two and tier three cities and rural market. Because of war situation, inflation was on a higher side, which is normalizing now. On half-year basis, our EBITDA margin was similar to last year. On inventory side, inventory rose to INR 1,230 crore in September from INR 910 crore in March. But the business has doubled in the same period. As mentioned on page number six of our presentation, when measured against COGS, inventory days actually fell from 123 days to 99 days. If we will see in respect to sales, it will be less number of days. Overall net working capital days fell from 83- 59.
Receivable days are just 10. We are not pushing the stock into channel on credit. We keep the stock ready in our warehouse and dispatch fast to our channel partner. The buildup normal and sometimes deliberate as explained below. Normally inventory days range as one and a half month raw material, 15 days as semi-finished goods, and one month as FG. The second point, the domestic cell switch on 1st January 2027. From the date, every net metered rooftop system in India, subsidized or not, must use panel made with domestic cell listed under ALMM List-II . Cells are very important as June 2026. Country has about 35 + GW of cell capacity against 200 GW of module capacity. We own our cell and we are positioned DCR panel and complete system ahead of this switch. New products from Ratlam.
When we add new product lines, raw material adds for initial time, which takes some time to be normalized. Let us discuss PM Surya Ghar and demand beyond subsidy. PM Surya Ghar: Muft Bijli Yojana has been remarkable program according to national portal. It has covered more than 60 lakh households, installed more than 19 GW, and released over INR 36,000 crore of subsidy as on October 31, 2026. About 5 lakh households remain to be covered in this current phase, which runs until March 2027. The next phase, PM Surya Ghar 2.0, is under government's consideration. Reported proposals include support of battery storage, incentive linked actual generation, and shared rooftop solar. If storage support comes, it plays directly to a company that makes the panel, the hybrid inverter, and battery under one roof. Let me be very clear, our business does not depend totally on subsidy.
We build our off-grid business over decades without one, and economics now stands on their own. Electricity bill keep rising. Several states, including Madhya Pradesh, Jharkhand, Chhattisgarh, have raised the tariff for FY 2027. Household consumption keeps growing with air conditioners and appliances. In many tier two, tier three towns, supply is still unreliable, so backup is necessary, not a luxury. On-grid solar cannot keep lights on during the power cut. A solar system with a battery can do this. Government data shows that more than 20 lakh households under PM Surya Ghar now report zero electricity bill. That kind of word of mouth sells the next system with or without subsidy.
The runway is very long. India rooftop solar capacity has grown from about 12 GW in March 2024 to about 26 GW in March 2026. Against an estimated rooftop potential of 67 GW, that is less than 5% penetration.
Worldwide data show that there is huge potential in India for rooftop solar, as distributed solar is double the efficiency than ground mount solar and distribution losses. Let us discuss on solar overcapacity. About overcapacity in India solar, it seems real, but it is in modules that hurts companies that sell modules as a commodity to project developers. Our panels go into our own captive system and are sold through our own channel. So the module price is not what drives our economics. The complete system and service behind it are. Within the solar chain, the important part is cell, and we own them. Also important is trusted brand with distributor in every district and an engineer who reaches to the roof. We have spent close to three decades in building it. When an industry consolidates, market share moves to the companies with brand reach and service.
We intend to be one of them. Outlook. Supported by our expanding distribution, newly committed capacities at Ratlam, and upcoming battery plants, we remain fully confident of achieving our robust growth targets while maintaining our margin discipline. Thank you. I will now hand over to Prashant for financials, after which we will be happy to take your questions. Thank you.
Thank you, Pawan ji, and good afternoon, everyone. I will cover the quarter and the half year, then explain the margin and working capital movement, and close with the balance sheet. All figures are standalone and in rupees, rounded off to the nearest crore. When compared to Q2 FY 2026, the company has delivered strong growth in Q2 FY 2027. Revenue from operations was INR 1,307 crore, up by 130%, and EBITDA was INR 223 crore, up by 116%. Hence, revenue and EBITDA both are more than double compared to Q2 FY 2026. This was driven by significantly higher sales volume, supported by our pan-India network of on-roll service engineers and a conscious strategy of passing on cost benefits to the customers through competitive pricing to expand market share.
The Q2 FY 2027 results also absorbed overheads at the Ratlam facility, incurred ahead of the production ramp-up of our recently commissioned panel and inverter division, which contributed to the moderation in EBITDA margin to 17.1% from 18.1% of Q2 FY 2026. Profit after tax was also doubled to INR 133 crore, up by 111% at a margin of 10.2% compared to 11.1% in the corresponding period last year. The movement in PAT margin was largely in line with the moderation in EBITDA margin. Moving on to the half year, revenue for the half year was INR 2,652 crore, up by 127%. EBITDA was INR 478 crore, up by 128%, and the EBITDA margin was 18% compared with 17.9% in first half of FY 2026. Reported PAT was INR 191 crore.
This includes the exceptional loss of INR 143 crore before tax or INR 107 crore after tax from the Bawal fire, which we recognized in the full in quarter one. Excluding it, normalized PAT was INR 298 crore, up by 128% at a margin of 11.2%. The insurance claim has been filed for the full carrying value of the damaged assets. Salvage disposal has already done. We expect resolution and realization of the insurance claim in this financial year, which will provide additional working capital cash inflow. Moving on to the working capital. Net working capital days improved to 59 days in H1 FY 2027 from 83 days in FY 2026 on an annualized basis. Receivable days come down to 10 from 15 and inventory days to 99 from 123, while payable days were 50 against 55.
In absolute terms, inventory rose by about INR 320 crore to INR 1,230 crore.
As Pawan ji explained, that is positioning for the second half and for the domestic cell transition. In the first half, operating cash flows before working capital changes was about INR 490 crore, which shows the earnings are converting to cash. We invested about INR 661 crore in working capital to support a business that has been doubled in size and spent about INR 184 crore on investing activities. Moving on to the balance sheet. As of September 30, 2026, total assets increased to INR 2,907 crore from INR 2,344 crore as of March 2026. Total equity increased to INR 1,466 crore from INR 1,273 crore. Total debt was INR 851 crore, while cash and cash equivalent stood at INR 52 crore, resulting in net debt of INR 800 crore, with net debt-to-equity ratio of 0.55 x.
The increase in the net debt is to finance working capital and capital expenditure in the plan. With respect to return ratios, we want to clarify that in slide 23 of our earning presentation, ratios are half-year non-annualized figures. Current half-year bars are shorter than last year. On an annualized basis, our return ratios will be better when they will be presented annually. Going forward, our focus will remain on operational discipline, optimizing working capital, ramping up Ratlam, and sustaining robust profitable growth. Thank you. Thank you, everyone. We are now open for your questions.
Thank you, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue settles. A reminder to all, you may press star and one to ask a question. We have the first question from the line of Prithvi Raj from Unifi Capital. Please go ahead.
Yeah, hi. Thanks for the detailed introduction. I just have a couple of questions. One, you had a very strong H1 revenue growth of almost 125%. So how should we look at second half, given that only 66 lakh households have benefited versus 1 crore target? Should we expect similar 100% revenue growth in second half, or should we see second half to be lower or higher?
Hi, this is Pawan. Can you repeat once more this question?
On the revenue growth, how should we look at second half of this year? Should we expect similar like H1 wherein you will double your revenue on YoY basis, or can it be higher or lower?
This question is very difficult basically, because we have given some guidance and we want to revise the guidance after Q3 results. Basically, I want to skip this question, sir. Sorry, first question I am skipping because this will meant something guidance again, basically.
Just to add on what Pawan sir is saying, there's lot of variable factors are prevailing in the market. Since ALMM List-II is also on the door, with this ALMM List-II, the market might further shift to the DCR cells, and since the shortage is still continuing on the DCR cell side. PM Surya Ghar 2.0 is also under the discussion, and it is be very important to see that how government and by when government will give a clarity on that thing. That's why Pawan sir wants to wait for another quarter, and we will cover the guidance for the Q4 once we will declare the results for the Q3. Because we believe in the coming quarter, some clarity will further come on a PM Surya Ghar 2.0 and the deferment, if still there on the chart on the MNRE list about the implementation of ALMM List-II.
Hope this clarifies, Prithvi Raj.
Okay. Let me put it another way. Your revenue guidance for the full year has been, I think, 70%. H1 alone, you have done a very high number. Would the full year revenue growth be higher than the guidance, or how shall we look at it?
We will review it, sir, during the Q3 results. We have taken the stand that we will not revise the guidance this time, sir.
Okay. Fine. Moving on to your margins, given the backward integration that you have been doing across various categories, how should we look at margins? Will it be around 18%-20%, or will it be 15%-17%? How should we look at overall EBITDA margins?
It will be sustainable, sir. Basically.
Okay.
It will be sustainable as per our last guidance, basically.
Oh, which is 18%-19%. Got it. Finally, on this news that Chinese government is looking to ban technology transfer with respect to solar, how are we positioned with the new cells plant? Will there be any issue with respect to execution there?
Machines already received, and we don't see any challenge, basically.
Okay. Thank you, sir, for the information.
Thank you, sir. Thank you, ma'am.
Thank you. We have the next question from the line of Himanshu Bisani from PinPoint X Capital. Please go ahead.
Hi, sir. Thanks for the opportunity, and congratulations on a great set of performance. Sir, our peers, solar cell manufacturers report a margin of north of 30% on EBITDA, and our margin is close to 17%-19%. Is it just because that our other components of the kit, your batteries and inverters, are a lower margin business, or is it because that we are still yet to completely integrate our captive consumption? Just want to understand how should we think about the EBITDA margins as cell integration ramps up, and also considering the fact that as supply has increased, the cell prices have gone down. How should we think about it?
So, definitely, we will try to maintain the margins that we are having currently now. First answering to the first question that you asked. 30% generally are not there uniformly in all the solar panel manufacturers. The biggest differentiator between us and the rest of the players are that the sudden rise in margin for the players who are having competitive advantages in the form of DCR solar cell might be temporary, and it has been seen in this quarter as well that for the other B2B players, there is a slight dip in the margins that we have seen. Whereas in our case, we are strongly positioned that as the first thing that we are into B2C space, where the margin increase will not be sudden and high.
So, that's why in B2C, it is comparatively more easy to sustain the margin than a pure B2B player, which is more dependent on any government policy or a sudden spike in the demand. We have built this model in the last 30 years so that the revenue growth is also sustainable and whereas margin growth is also sustainable. Coming to the margin profile mix, definitely in our kitty, we have more than one product of pure solar panel. In solar panel, there are DCR and non-DCR. In batteries, we have lithium and tubular. In inverter, we have all three kind of inverter, be it off-grid, on-grid, and hybrid.
So, your second point is correct that we have a margin profile of consumer-based product, and that's why we are able to give a consistent margin compared to the last half year that we have given in this year of 18%.
So, sir, when you say that it is a B2C and more sustainable margin front, as the integration from the new TOPCon facility, naturally our margin should increase, right? Is that the understanding?
See why we don't want to be aggressive on that side. As I said that some part of our business is also linked to the government policies in form of implementation of ALMM List-II. So, right now, the condition is that this DCR cell shortage is still there because the current run rate of DCR solar cell production is only 2 GW if you compare to the last month, 2.2 GW to be precise in the last month. Whereas the demand is much higher than that. So, that's why if this ALMM List-II comes up from January 1, then again, we believe that this prices of DCR solar cell might further go. Having said that, if it defers, then definitely a different story can come up because of shortages of DCR solar cell currently.
Apart from that, as I mentioned in the previous answer, PM Surya Ghar 2.0 is also still yet to be clarified from the government front. That is why raw material prices are also included, geopolitical things are also there leading to the increase in fuel prices. That is why though we have advantages of currently 1 GW Mono PERC cell line, we have announced additional 1.2 GW TOPCon solar cell line. But we want to be on a conservative side, that is why we do not give any aggressive guidance to it because the variability is much high in terms of raw material pricing and government policies and the shifting of the market demand.
Understood, sir. Sir, continuing on the government policy, Surya Ghar 2.0 with something of the BESS was mentioned in the previous con call. I know you said that there is yet clarity to come from the government, but what kind of opportunity we are looking at, what is expected? Is it much bigger because of the opportunity size in the market?
Sir, this battery-based system we are doing from last 30 years. So, it is our business mode basically. If this policy comes, it is directly suit us basically, because we are doing this business from long time and we think we will get more better share in the market basically.
Okay. Lastly, sir, as there are a lot of solar companies which are seeing that the rooftop market is growing so fast and are planning to enter it, also see the larger module manufacturers are coming up with their own inverters and kits, what kind of competitive intensity you see in the industry and how are we placed into benefit from it?
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Got it, sir. Thank you so much and all the best.
Thank you. We have the next question from the line of Shweta from iThought PMS. Please go ahead.
Hi, sir. Good afternoon. My first question is basically out of the DCR panels that we sold in H1, how many of those use our own cells versus bought-in cells?
For mono, we have the in-house capacity, but there is a good demand for the TOPCon as well. Just to give you a rough estimate, you can say around 70%-80% is in-house and 20%-30% that we have sold DCR is from outside.
Got it, sir. My next question is roughly what percentage of our H1 revenue came from the PM subsidy customers?
Right now, more than 50% of our revenue is coming from this on-grid and DCR-based market.
Okay. So, 50% is from the subsidy customers. Is that the rough split?
Yes.
Got it, sir. Thank you so much.
Thank you. We have the next question from the line of Sagar Shah from Spark Capital. Please go ahead.
Yeah, good afternoon, management. First of all, happy Diwali and happy New Year to the entire management of Fujiyama Power Systems. Prashant ji and Pawan ji, actually [Non-English content ] in regards to this oversupply that you referred to, [Non-English content ] in regards to the oversupply [Non-English content] next year [Non-English content ] because we have a capacity or industry capacity of 210 GW, whereas the demand is anything around 40-45 MW on the higher side. [Non-English content ] means how much you can say that [Non-English content ] module prices [Non-English content]?
Because [Non-English content ] if [Non-English content ] our [Non-English content] own capacity [Non-English content ], when we take our capacity into consideration, [Non-English content] we also have something like a 3.5 GW of panels, and I am talking of FY 2027 [Non-English content ], FY 2027-2028 [Non-English content ]. [Non-English content ] our [Non-English content] in-house cell capacity [Non-English content ], [Non-English content] 2.2 GW [Non-English content], Ratlam and Dadri [Non-English content ]. So, [Non-English content] realization [Non-English content] correction [Non-English content ] your [Non-English content]? That is my first question, sir.
[Non-English content] DCR use [Non-English content] ALMM List-II [Non-English content] January [Non-English content] 100% [Non-English content] requirement [Non-English content] shortage [Non-English content] cell [Non-English content] capacities [Non-English content] 3.5 GW [Non-English content] 2.2 GW, [Non-English content] 100% [Non-English content] highest 85%- 90% [Non-English content] around 70% [Non-English content] captive consumption [Non-English content] over capacity [Non-English content] next year [Non-English content]
Got your point. Sir, second question was related to other expenses [Non-English content] regarding actually. [Non-English content] gross margins [Non-English content] stable [Non-English content] quarterly result [Non-English content] H1 [Non-English content] stable [Non-English content] as compared to H1 last year [Non-English content] quarter [Non-English content] expenses [Non-English content] INR 112 crores [Non-English content] that is much on the higher side. [Non-English content] year-on-year [Non-English content] compare [Non-English content] double [Non-English content] reason [Non-English content] sir? [Non-English content] margins [Non-English content] 17.1% margin [Non-English content] quarter [Non-English content] reason [Non-English content] Can you please specify?
So basically, [ Non-English content ], absolute term [ Non-English content] if revenue double [ Non-English content ] then definitely [Non-English content] expenses double [Non-English content] . How we see it as a percentage of revenue, [Non-English content] what you are seeing, [Non-English content] basically [Non-English content] two-three broad reasons [Non-English content] . First is that our Ratlam [Non-English content] fixed overheads [Non-English content] , our inverter [Non-English content] recently [Non-English content] capitalized [Non-English content] , August [Non-English content] commissioned [Non-English content] , so its increased overheads [Non-English content] .
Apart from that, [Non-English content] a little bit [Non-English content] selling distribution [ Non-English content] overheads [Non-English content] increased [Non-English content] and that's a conscious call because we want to target tier two and tier three cities. [Non-English content] we have run some one-off campaigns [Non-English content] advertisement [Non-English content] . If you take feedback [Non-English content] from the market, you will see that our brand visibility has increased significantly, even in tier two, tier three cities and the villages.
[Non-English content] is an investment for us to increase our brand visibility for the coming quarters. Similarly, [Non-English content] freight [Non-English content] because you know because of this geopolitical crisis, petrol-diesel [Non-English content] rate [Non-English content] increase [Non-English content] if you compare it with the last year in Q1 itself. These are the few two-three reasons, [Non-English content]
[Non-English content] sir, [Non-English content] guidance next year [Non-English content] infrastructure, [Non-English content] service infrastructure [Non-English content] number of service engineers [Non-English content] infrastructure [Non-English content] future [Non-English content] investment [Non-English content] future [Non-English content]
Okay, got your point, sir. So third question, sir, [Non-English content] expansion [Non-English content] , follow up on that existing question. [Non-English content] expansion [Non-English content] investment [Non-English content] , [Non-English content] South [Non-English content] South [Non-English content] aggressively plan [Non-English content] next year [Non-English content] . South [Non-English content] expansion [Non-English content] status [Non-English content] shops establish [Non-English content] , dealers establish [Non-English content] South [Non-English content] expansion [Non-English content] experience as a market?
South [Non-English content] states [Non-English content] Kerala southern [Non-English content] already [Non-English content] Tamil Nadu [Non-English content] better [Non-English content] states [Non-English content] , Andhra [Non-English content] Telangana [Non-English content] next quarter [Non-English content] better [Non-English content] efforts [Non-English content] results [Non-English content] , sir.
[Non-English content] South [Non-English content] revenue sir, South [Non-English content] Out of the INR 1,307 crores [Non-English content] clock [Non-English content] quarter [Non-English content] South [Non-English content] revenue [Non-English content] sir?
[Non-English content] sir, [Non-English content] question MP [Non-English content] MP [Non-English content] Maharashtra [Non-English content] cover [Non-English content] Maharashtra [Non-English content] gain [Non-English content] sir, [Non-English content] recently basically. [Non-English content] Maharashtra [Non-English content] sale, [Non-English content] Gujarat, Maharashtra [Non-English content] MP [Non-English content] cover [Non-English content] Chhattisgarh [Non-English content] MP [Non-English content] cover [Non-English content] sale volumes [Non-English content] South [Non-English content] sir calculate [Non-English content] figures [Non-English content] immediately.
Okay.
[Non-English content] next call [Non-English content] response?
[Non-English content] I will take it offline. My last question was related to cash flow, sir. [Non-English content] cash flow [Non-English content] quarter [Non-English content] negative [Non-English content] six months [Non-English content] inventory [Non-English content] higher side [Non-English content] reasons [Non-English content] Ratlam [Non-English content] expansion [Non-English content] sir.
So, any plans on [Non-English content] debt [Non-English content] reduce [Non-English content] cash [Non-English content] increase [Non-English content] inventory [Non-English content] rationalize [Non-English content] demand [Non-English content] inventories [Non-English content] cash [Non-English content] burn [Non-English content] debt [Non-English content] Balance sheet [Non-English content] heavy [Non-English content] .
So, related to that [Non-English content] suggestion [Non-English content] one suggestion was [Non-English content] breakup [Non-English content] next quarter [Non-English content] panels, sales, power electronics [Non-English content] individual revenue [Non-English content] investor presentation [Non-English content] investors [Non-English content] clarity [Non-English content] as a company Fujiyama [Non-English content] diversify [Non-English content] . It's not just a pure solar producer, but it's an integrated company actually with all solar solutions actually, not a solar products. [Non-English content] suggestion [Non-English content] , sir.
[Non-English content] slide add [Non-English content] bifurcate [Non-English content] issues [Non-English content] , basically [Non-English content] Sir, [Non-English content] issues [Non-English content] slide add [Non-English content] next time [Non-English content] complications [Non-English content]
Okay, [Non-English content] related to debt, sir?
Debt [Non-English content] , sir.
Debt [Non-English content] the increase in debt is close to INR 100 crore is for the Ratlam expansion [Non-English content] CapEx [Non-English content] incur [Non-English content] Plus, as you have rightly pointed out [Non-English content] inventory [Non-English content] because [Non-English content] revenue [Non-English content] double [Non-English content] . According to the inventory has increased. So, INR 300 crore [Non-English content]
[Non-English content] rationalize [Non-English content] , sir?
Sir, [Non-English content] inventory [Non-English content] definitely we are working [Non-English content] what are the ways we can optimize it. Apart from that, [Non-English content] Bawal [Non-English content] INR 80 crore [Non-English content] inventory [Non-English content] almost [Non-English content] damage [Non-English content] impact [Non-English content] which is contributing to this. [Non-English content] Q4 [Non-English content] INR 140+ crore [Non-English content] loss recognize [Non-English content] , if it comes [Non-English content] expected [Non-English content] financial year [Non-English content] , it will also help us in the cash on the cash front.
On the debt side, I think as market is already aware that we are taking a resolution on the QIP side. [Non-English content] board [Non-English content] approve [Non-English content] , maybe we can also plan for the debt repayment from that.
Okay, fine sir. Thank you so much and all the best. I will take it offline about the south numbers and Happy Diwali to the entire team.
Thank you, sir. Thank you.
Thank you. A reminder to all the participants, you may press star and one to ask a question. Ladies and gentlemen, that was the last question and with that we conclude the question and answer session. I now hand the conference back to the management for the closing comments. Thank you and over to you, sir.
Thank you. Thank you once again for joining us today and for your continued interest in Fujiyama. We appreciate your confidence you place in our company. If you have any additional questions, please feel free to reach us or our investor relationship advisors, Churchgate Partners, and we will be glad to assist you. Thank you very much for the time and support. Thank you. Thank you very much.
Thank you members of the management. On behalf of Motilal Oswal Financial Services Limited, we conclude this conference. Thank you everyone for joining with us today and you may now disconnect your lines. Thank you.