SOLARWORLD Q4 FY26 earnings call.

Guidance to track

• Management targets ~₹2,000 crore revenue in FY27, representing ~40–45% growth over FY26's ₹1,416 crore, driven by BESS revenue ramp-up (expected ₹800–1,000 crore from BESS) and sustained solar EPC execution.
• EPC margins guided in 8–11% range for FY27 depending on raw material price trajectory. Management noted Q1 FY27 is challenging due to elevated commodity prices (copper +40%, aluminum +50% vs. Oct 2025) and rupee depreciation (₹96/USD). Margins would improve if West Asia situation normalizes.
• Battery energy storage EPC business expected to deliver 14–15% PAT margins at full utilization. 3.4 GWh fully automated BESS manufacturing facility (with CUCAR robotics) is ready with trials underway; projected revenue potential ~₹3,300 crore at full capacity (740 containers/year at ₹4.5 crore each).
• 1.2 GW solar cell manufacturing facility in Nagpur is under construction with approvals received; commercial operation targeted by June 2027, providing backward integration to meet ALMM2 requirements and reduce supply chain dependency.

Risks flagged

• Copper prices surged ~40% and aluminum ~50% since October 2025 due to geopolitical tensions in West Asia, combined with rupee depreciation to ~₹96/USD. These headwinds could push FY27 margins below the 8% floor of guidance if sustained, impacting profitability despite strong order book.
• With ALMM2 becoming mandatory from June 2026, 90–95% of projects post-October 31, 2025 require DCR cells. Management acknowledged a potential 6–12 month cell shortage in the domestic market, which could force developers to either reduce margins or delay projects. Solarworld's own cell line won't be ready until June 2027.
• In Q1 FY26, management guided for ₹1,500 crore revenue with 11% PAT margin for FY26. Actual FY26 results showed ₹1,416 crore revenue (94% of guidance) and 8.5% PAT margin (77% of margin guidance), raising questions about management's forecasting reliability and execution against commitments.
• Management acknowledged that PPA signing delays are occurring after developers become L1 bidders, partly due to DISCOM reluctance and transmission connectivity constraints. This could delay revenue recognition from the ₹2,800 crore order book and extend execution timelines beyond the stated 14 months for solar EPC.

Key quotes

• I would say somewhere between 8 to 11% is where we should lie in terms of overall margin. Q4 for all the companies has been very very challenging. All the raw material prices have significantly increased in the last quarter either owing to the war that is currently going on which has created a lot of headwinds.
• From a competitive perspective we are very well positioned as India's only EPC company that is backward integrated into manufacturing. We are targeting a 60-40 BESS to solar EPC revenue mix which will allow us to partner meaningfully in the country's rapidly expanding storage ecosystem while building a more diversified and resilient revenue base.
• Q1 has been difficult for everybody because of the elevated prices. If these prices reduce we hope to improve our margins as well otherwise we would hope to sustain our margins internally. We expect to grow by around 40–45% this year as well.