Premier Energies Limited — Q4 FY26

Premier Energies Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=VDi2FBHoUug Published: 1d ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Premier Energies Limited Q4 FI26 earnings conference call hosted 0:08 8 seconds by ICSA Securities Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask 0:16 16 seconds questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing start and 0:23 23 seconds zero on your touchstone phone. I now hand the conference over to Mr. Mohit Kumar from ICS Securities Limited. Thank you and over to you sir. 0:32 32 seconds Thank you Ruja. 0:34 34 seconds Good evening. On behalf of ICIC securities I welcome you all to the Q4 FI26 earning score of Premier Energies. 0:46 46 seconds Today we have with us from the management Mr. Chiranju Singh Saluja managing director Mr. Nanakor Kandelwa, 0:56 56 seconds Chief Financial Officer, Mr. Vin Rustagi, Chief Business Officer and Mr. 1:02 1 minute, 2 seconds Sudir Moola, Chief Strategy Officer. We will begin with the opening remarks on the management which will be followed by 1:10 1 minute, 10 seconds Q&A. Thank you. And over to you, sir. Thank you, Mo. Am I audible? 1:20 1 minute, 20 seconds Yes, you are. Please go ahead. So good evening everyone. 1:29 1 minute, 29 seconds Thank you for joining us today for our full year FI 2026 earnings call. 1:35 1 minute, 35 seconds I am Chinjit Saluja managing director of Premier Energy and I am joined today by 1:41 1 minute, 41 seconds my colleagues Mr. NK Kandelwal Group CFO Sudiri Reddi Chief strategy officer and 1:48 1 minute, 48 seconds director and Vine Rustagi Chief Business Officer. 1:54 1 minute, 54 seconds I'm delighted to share that the company has reported a record set of revenue and profit numbers. 2:01 2 minutes, 1 second Our total revenue has increased by 20.7% year-on-year to 8,026 crores. 2:11 2 minutes, 11 seconds The profitability margins have held steady. Operation AITA operation AITA margin is reported at 30.4% and PAT margin at 18.8%. 2:25 2 minutes, 25 seconds Our PAT has jumped 61.1% yearonear to 1,510 crores. 2:34 2 minutes, 34 seconds The most pleasing thing about these numbers is they is that they have been achieved in a challenging overall 2:40 2 minutes, 40 seconds environment with increase in several commodity prices and freight prices. 2:47 2 minutes, 47 seconds Amongst key business updates, we recently completed construction of our 5.6 gawatt module plant at Sitharamur in 2:56 2 minutes, 56 seconds Telangana. This is one of the largest and most automated module plants in India and is expected to achieve full ramp up in the next two months. 3:07 3 minutes, 7 seconds In the last few months, we launched two new products, zero busbar cells and all black modules responding to an evolving market. 3:19 3 minutes, 19 seconds These two products the requirements are showing a strong technical expertise. 3:26 3 minutes, 26 seconds These innovations are already receiving great market acceptance. Our maning plants continue to run at near peak 3:33 3 minutes, 33 seconds capacity utilizations and our top one headline which was commissioned in June 2025 3:41 3 minutes, 41 seconds was stabilized in record time and is now running at 90% plus levels. 3:49 3 minutes, 49 seconds Our proposed acquisition of 51% stake in Transcon is complete. Transcom has reported excellent results with annual 3:58 3 minutes, 58 seconds revenue and PAT of 423 and 45 crores respectively. 4:04 4 minutes, 4 seconds Evida and PAT margins have jumped sharply over previous years to 19.1 and 10.6% respectively. The company is now 4:13 4 minutes, 13 seconds embarking on major growth trajectory with total capacity set to increase 4:19 4 minutes, 19 seconds nearly sevenfold to 16.75 GBA by July 2026 with focus on more lucrative HV and EHV segments. 4:30 4 minutes, 30 seconds As we look forward to the new year, the environment around us is becoming ever more unpredictable. 4:37 4 minutes, 37 seconds But our investments in scale, technology, people, and supplier relationships built over a 30-year 4:44 4 minutes, 44 seconds operating platform are paying off in building a resilient business with profitable growth. 4:51 4 minutes, 51 seconds The Middle East crisis is turning into a moment for renewables as all stakeholders look to rethink energy mix and reduce consumption of fossil fuels. 5:02 5 minutes, 2 seconds We believe this is going to provide a major boost to long-term demand for the sector. 5:09 5 minutes, 9 seconds We already seeing strong demand traction across all segments. New installations in FI26 grew to almost 45 gawatt in AC 5:18 5 minutes, 18 seconds terms. A fantastic 87% growth over FI25 with estimated total module demand of close to 60 gawatt. 5:29 5 minutes, 29 seconds the moment the momentum is expected to carry through into the current year and I emphasize notwithstanding concerns around tendering slowdown and 5:38 5 minutes, 38 seconds transmission delays. This is reflected in our growth order book which currently stands at 14,010 crores up 66% yearonear. 5:50 5 minutes, 50 seconds We are primed to capitalize on the booming solar opportunity with our expanded module capacity of 11.1 gawatt 5:58 5 minutes, 58 seconds and cell capacity going up to 10.6 gawatt shortly. These capacities make us one of India's largest and most integrated cell and module manufacturer. 6:11 6 minutes, 11 seconds FI27 is a year of large capex for us at 5,100 crores to be deployed across cells 6:18 6 minutes, 18 seconds inot wafers, batteries and inverters helping us to transform our business with a diversified portfolio of clean 6:25 6 minutes, 25 seconds energy equipment. At the same time, a major ease of the company is to leverage AI and digital technologies, automate 6:33 6 minutes, 33 seconds day-to-day tasks, exploit process efficiency, and boost productivity to stay competitive in an evolving m 6:41 6 minutes, 41 seconds marketplace. With all these initiatives, we hope to maintain our relationship, our leadership position as the lowest 6:48 6 minutes, 48 seconds cost producer of best-in-class products for the foreseeable future. Thank you. We are now open for questions. 6:57 6 minutes, 57 seconds 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 the touchstone 7:05 7 minutes, 5 seconds 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 7:14 7 minutes, 14 seconds question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 7:25 7 minutes, 25 seconds The first question is from the line of Pravin Sahai from Prau Siad. Please go ahead. 7:31 7 minutes, 31 seconds Yeah, thank you for opportunity and uh many congratulations for a good set of numbers. Uh my first question is related 7:37 7 minutes, 37 seconds to the model. Uh if you can uh clarify like uh the total uh you know Q4 the DCR 7:45 7 minutes, 45 seconds uh uh model volume uh as a percentage of a total volume has sequentially 7:51 7 minutes, 51 seconds decreased uh doubled because if I look at the same yeah 8:01 8 minutes, 1 second because if I look at yeah if I look at the DCR uh you know the website uh It's showing that the 8:09 8 minutes, 9 seconds production of the DCR model for you has been doubled on the sequential basis. So 8:16 8 minutes, 16 seconds uh so as the case for you like uh can you clarify that? 8:21 8 minutes, 21 seconds So in the in the last uh quarterly call also we had said that the DCR website is more a verification portal for traceability and for DCR verification. 8:31 8 minutes, 31 seconds It is not a portal to um um you know arrive at numbers of sales of modular cells. So the number there would not be an accurate number. 8:42 8 minutes, 42 seconds Yeah. You know just to add to that uh prau uh you know uh sorry uh you know 8:49 8 minutes, 49 seconds our sales mix between uh selling sales uh and DC modules uh it changes on a 8:56 8 minutes, 56 seconds quarter to quarter basis. Uh and uh we have an audio book comprising both uh Hello, can you hear? Yes. Yes. 9:04 9 minutes, 4 seconds Both and uh our sale order book comprises both uh sales uh DCR modules and nonDCR 9:14 9 minutes, 14 seconds uh modules but I don't I don't think you should read too much uh into the quarterly changes uh into in this mix. 9:24 9 minutes, 24 seconds Okay. Uh second on the uh the sale realization or the external sales uh 9:31 9 minutes, 31 seconds revenue uh if you can give us some indication that frequency how it is uh setting because you have a higher order 9:39 9 minutes, 39 seconds of a sale uh now in the order book. So how the realization is setting up on the sequential basis. 9:50 9 minutes, 50 seconds So uh in terms of the fell market uh you know uh the fell market overall still continues to be favorable uh the the 9:58 9 minutes, 58 seconds pricing uh has been uh quite stable at between 35.5 to 14 odd cents uh and we 10:06 10 minutes, 6 seconds don't see any change uh in pricing in the current environments. 10:12 10 minutes, 12 seconds Okay. Yeah. Thank you sir. That that's it. 10:18 10 minutes, 18 seconds Thank you. The next question is from the line of Adita Vikram from DB Securities. Please go ahead. 10:25 10 minutes, 25 seconds So hi sir. Uh two quick questions. Uh first of all there is a significant 10:32 10 minutes, 32 seconds increase in purchase of stocks. Could you clarify why is that the case? 10:37 10 minutes, 37 seconds Because it's approximately four times of last year. Is that helping us with the margins? 10:46 10 minutes, 46 seconds Uh so um hi the stock going up is a planned move by us looking at the supply 10:54 10 minutes, 54 seconds chain situation and also uh the new 5.6 gawatt of module line which has got commissioned um which also um you know 11:03 11 minutes, 3 seconds requires more stock to be purchased for the module line. So it's well in line with our plan. There is no in major increase. 11:11 11 minutes, 11 seconds Okay. and and there is also a net debt increase of approximately 660 crores. Why is that? 11:23 11 minutes, 23 seconds So you know that is inevitable because we are embarking on a large capex program uh you know a total capex uh for 11:30 11 minutes, 30 seconds the cell line of 7 gawatt alone is about 3,000 crores. uh and then in addition to that we have already started work on our 11:37 11 minutes, 37 seconds inboard vapor project uh and separately on other projects including aluminium line aluminium frames uh battery storage 11:45 11 minutes, 45 seconds uh and of course uh transformers as well. So I think you will see uh as we have previously said uh we have about uh 11:53 11 minutes, 53 seconds a 12,000 cr rupee capex plan spread over uh 3 years uh starting uh FY26 12:01 12 minutes, 1 second uh and as the capex goes up uh we funding it through a mix of internal acro and debt uh and the debt level uh 12:07 12 minutes, 7 seconds will inevitably go up as well. Uh so we are uh obviously sorry you go on. Yeah, 12:15 12 minutes, 15 seconds sorry just just to cl uh add there I know you have clarified this uh on previous one as well but what is the 12:22 12 minutes, 22 seconds debt to equity ratio which you're looking at or targeting sorry please repeat that question so 12:31 12 minutes, 31 seconds what is the debt to equity considering all the expansions which are in place and which we are planning as a company 12:38 12 minutes, 38 seconds what is the debt to equity ratio you're looking at in next one or two years. 12:46 12 minutes, 46 seconds So through this capex cycle, you know, our endeavor is to maintain our A+ rating uh and we want to maintain the 12:53 12 minutes, 53 seconds debt to equity ratio at about one uh and debt to AIDA ratio at about 1.5 or below. 13:01 13 minutes, 1 second Okay. And and last and final thing uh so we have somehow sustained margin when other uh peers in the same group are not 13:10 13 minutes, 10 seconds able to because of copper prices silver prices increase. It clearly looks like that this time uh the in stock trades 13:18 13 minutes, 18 seconds have helped us right how are you seeing the margin trajectory um in this upcoming quarter again silver prices and copper prices have started 13:26 13 minutes, 26 seconds going up and there is all the war escalations and everything which is happening. So how do you do you see this sustaining in this manner? 13:36 13 minutes, 36 seconds Yeah, I mean you know we can't give up give you any guidance uh on margin. We don't as a company we don't give any futuristic uh we don't make any 13:43 13 minutes, 43 seconds futuristic statements. Uh but uh you know a current order book uh is priced at uh levels which are consistent with 13:51 13 minutes, 51 seconds what we saw uh in the last year. uh yes some costs are going up but at the same time we are also doing a lot of work 13:58 13 minutes, 58 seconds behind the scenes uh to be able to reduce our cost and improve the efficiencies in the overall business. Uh 14:06 14 minutes, 6 seconds we also need to uh you know understand that the scale of the business has grown by almost two times in the last one year 14:13 14 minutes, 13 seconds uh and uh is going to grow by something like two to three times over the next year as all the new uh plants come online and the production uh kind of 14:21 14 minutes, 21 seconds picks up. So the result of this is we're building significant operating leverage in the business uh which is going to give us the advantage of efficiency in 14:30 14 minutes, 30 seconds reduction of the fixed cost base uh the procurement cost should come down as scale goes up. So I think the result of all these things is that yes some costs 14:38 14 minutes, 38 seconds are going up but we believe that we are in a very good shape to be absorbed some of these cost increases uh and uh stay 14:45 14 minutes, 45 seconds profitable. uh what happens to the exact margins obviously depends on a number of factors uh many of which are outside of control. Sure. And just to add to what 14:54 14 minutes, 54 seconds Vine said um there is a favorable shift in the business you know there is more DCR modules coming up as the demand 15:02 15 minutes, 2 seconds increases plus there is the policy shift towards KMM3 um which is an advantage for leading players with strong balance sheets. So 15:11 15 minutes, 11 seconds as V said apart from this our scale procurement efficiencies low cost base we believe it will help us maintain industry leading margins. 15:22 15 minutes, 22 seconds Okay. Thank you very much. 15:26 15 minutes, 26 seconds Thank you. The next question is from the line of Nisha from ICS securities. Please go ahead. 15:36 15 minutes, 36 seconds N please go ahead with a question. your line is unmuted. 15:41 15 minutes, 41 seconds Uh hi. Yeah, thank you so much for taking my question. Uh so my first question is on um is on export. So we've 15:48 15 minutes, 48 seconds seen that export has sort of um you know never really been the focus for the company because of domestic demand. Um 15:56 15 minutes, 56 seconds and now that uh the the tariffs on tar plus the the the anti-dumping duties on 16:03 16 minutes, 3 seconds India are very high. are we uh looking to export uh to the US at all by 16:10 16 minutes, 10 seconds procuring ourselves from Africa or anything like that. 16:18 16 minutes, 18 seconds So u maybe we are looking at if you look at our presentation we feel there's a strong uh uh you know potential of 16:26 16 minutes, 26 seconds exposed to Europe and US both um we are seeing that the demand in Europe will really pick up after the FDA is in 16:35 16 minutes, 35 seconds place and even for the US we are looking at more on cell manufacturing. We had earlier announced our cell manufacturing 16:42 16 minutes, 42 seconds plants in the US and uh we are looking at it positively now because things have settled down. Um and u we feel that 16:50 16 minutes, 50 seconds there is still a good opportunity for exports and we will look at the right opportunity to start exports to the US. 16:59 16 minutes, 59 seconds All right. and and since ALM2 is coming up um you know applicability in June when do we expect realistically the 17:07 17 minutes, 7 seconds demand driven uh purely by ALM2 should actually start picking up through grandfather projects. 17:15 17 minutes, 15 seconds So yeah you want to see both are different projects. 17:18 17 minutes, 18 seconds Yeah. So Nidi I mean you know when it comes to ALM2 we need to understand that there are various market segments with different uh uh rules applying to them 17:27 17 minutes, 27 seconds in terms of application of ALM2 uh the private market uh both rooftop and open access projects for CMI 17:35 17 minutes, 35 seconds customers uh ALM2 becomes applicable uh from June 1 uh and uh the demand is 17:42 17 minutes, 42 seconds expected to come online to come uh to the market immediately uh and that by the way is a very substantial demand 17:48 17 minutes, 48 seconds because now the CNI segment is almost equal in size to the utility scale uh 17:55 17 minutes, 55 seconds segment. Uh so we expect from June 1 onwards the entire market entire solo sector uh except for utility scale 18:04 18 minutes, 4 seconds segment will shift towards LM2 or domestic sales. uh and then when it comes to uh the utility scale market uh 18:11 18 minutes, 11 seconds the demand is going to come I would say towards the end of FI28 uh and uh you know 29 onwards because you know there 18:20 18 minutes, 20 seconds are all these old projects which have been auctioned uh before September uh 25 uh they have been grandfathered uh and 18:27 18 minutes, 27 seconds they can still use imported uh sales but if you look at uh the overall market demand mix you know if you look at what 18:36 18 minutes, 36 seconds we did in the last year out of 45 gawatt uh 30 gawatt uh including rooftop kusum 18:43 18 minutes, 43 seconds and CNI uh is switching on to the domestic cells uh right now and only 15 18:50 18 minutes, 50 seconds gawatt uh will be uh remaining for the utility scale market for FI28 and beyond. So a bulk of the market be uh 18:59 18 minutes, 59 seconds shifts to domestic sales immediately now. 19:05 19 minutes, 5 seconds All right. Uh my last question would be on Koler. Uh so the company recently announced that we will not be acquiring uh Koler anymore. So uh could you let us 19:14 19 minutes, 14 seconds know why that was firstly and second that do we have other um other companies in mind for inorganic growth or is there 19:21 19 minutes, 21 seconds something now that we're looking to to build this piece on our own? 19:27 19 minutes, 27 seconds Yeah. Uh so uh you know in terms of case solar uh look this was uh a uh non-binding term sheet at that time uh 19:36 19 minutes, 36 seconds and the final documentation still had to be completed. Uh obviously there are there's a very comprehensive set of documents uh for any transaction of this 19:44 19 minutes, 44 seconds kind uh and unfortunately uh we could not find uh an agreement on some of these terms and conditions uh in the in 19:53 19 minutes, 53 seconds the set of documents. I think that is the reason why the transaction could not be completed. Uh in terms of uh our 20:00 20 minutes future plans, we remain totally committed uh to the inverter business and indeed are working uh right now to 20:06 20 minutes, 6 seconds expedite uh our plans. Uh we are uh looking at our strategic options in terms of uh a JV partner. We have a 20:15 20 minutes, 15 seconds proposed JV with Selma SGS. Uh and you know that that JV remains a first preference. uh and we are looking at 20:23 20 minutes, 23 seconds other strategic options as well and we will finalize this over the next few months. All right, thank you so much. 20:32 20 minutes, 32 seconds Thank you. The next question is from the line of Kunal Sha from Dam Capital. Please go ahead. 20:40 20 minutes, 40 seconds Yeah, sir. Congratulations on a very good set of numbers first. Uh so firstly you know we've been able to maintain our 20:47 20 minutes, 47 seconds gross margins at a stable level versus most of our peers seeing a very sharp decline right in that sense could you 20:54 20 minutes, 54 seconds just provide some insights on our execution and how are we managing this cost inflation which is ongoing. 21:04 21 minutes, 4 seconds So Kunal I think uh one of the uh you know um significant thing which you see is the utilizations of our cell lines. 21:12 21 minutes, 12 seconds So we have been able to ramp up and utilize our cell lines at optimum level and that is one of the key reasons that we've been able to have the right DPR mix. Um want to add something with it? 21:24 21 minutes, 24 seconds No I think Kunal uh you know this is a question we already tried to answer earlier. Uh yes there's been an increase in some of the costs but uh as the scale 21:33 21 minutes, 33 seconds of the business goes up uh we are also seeing uh a you know significant amount of uh operating leverage and efficiency 21:41 21 minutes, 41 seconds coming into the business. we are uh actually doing a lot of work uh to optimize our operations uh increase 21:48 21 minutes, 48 seconds automation, use all the digital technologies etc uh to reduce our cost base and I think the the what you see in 21:57 21 minutes, 57 seconds terms of the results is basically a mix of uh some of these costs going up but uh uh us being able to reduce costs on 22:04 22 minutes, 4 seconds on some of the other areas of operations helping us to maintain our margins. 22:10 22 minutes, 10 seconds Understood. Uh just a follow up on this now given like the uh like the 7 gawatt line is going to come on stream anytime 22:18 22 minutes, 18 seconds soon right in the next three four months. Now do you see like as you ramp up the line these cost optimization will continue and if you can just quantify 22:27 22 minutes, 27 seconds that and second on the 7 gawatt line would there be like a front-end capex wherein you can do further brownfield at 22:35 22 minutes, 35 seconds a lower cost and what would be the optionality of that capex? 22:39 22 minutes, 39 seconds Yeah. Yeah, sure. So I think uh uh I mean definitely you know 7 gawatt is basically double our current capacity uh 22:48 22 minutes, 48 seconds all in a single line single uh site. So there will definitely be many more efficiencies uh coming into the business. Uh just to give you an idea uh 22:57 22 minutes, 57 seconds you know we currently have uh four different module plants uh spread across uh PA city uh and the new Sarur SA plant 23:05 23 minutes, 5 seconds that we've just uh commenced operations in uh uses 40% less manpower uh on a per uh megawatt basis. So you know that is 23:14 23 minutes, 14 seconds the kind of advantage that we seeing uh in reducing uh our uh cost base uh in relation to you know a potential for 23:23 23 minutes, 23 seconds brownfield site. Yes, I mean I think that is definitely uh a real possibility for us. We have the land and the 23:30 23 minutes, 30 seconds additional infrastructure available for doing an almost parallel 7 gawatt new cell line uh with uh a capex cost 23:39 23 minutes, 39 seconds efficiency of as much as 30 to 40%. So you know bearing in mind that our cap rate for the first 7 gawatt line is 23:46 23 minutes, 46 seconds already uh at about 35% lower than the industry benchmark that gives us a major advantage 23:53 23 minutes, 53 seconds uh in terms of cost and in an ability to scale up and build this line in a very quick time uh assuming that the demand takes off. 24:03 24 minutes, 3 seconds Understood. This is very helpful sir. 24:05 24 minutes, 5 seconds Secondly, in terms of the existing order book of uh 14,000 odd crores, how should we think of the execution timelines of 24:13 24 minutes, 13 seconds the same like the conversion to revenue on this and sir a followup here would be what I mean we know that you don't give 24:21 24 minutes, 21 seconds a precise guidance but the F26 order inflows have been extremely strong for the company like are we confident to 24:29 24 minutes, 29 seconds grow on the order inflows for 27 as well are you seeing that uh market shaping up in that sense 24:37 24 minutes, 37 seconds Yeah. So, uh, Kunal, uh, the execution of the order book, most of this will happen in FI27. 24:43 24 minutes, 43 seconds Uh, I can't give you an exact number, but it'll be, uh, I would say more than 2/3. Uh, and uh, in relation to uh, new 24:52 24 minutes, 52 seconds order intake for the year, I think like we have said earlier uh, you know, there is a uh, very strong uh, demand momentum 25:00 25 minutes in the sector. uh and in fact we are going to see a surge in particularly I would say DCR order intake uh as we go 25:08 25 minutes, 8 seconds forward because uh a large part of the market uh has been sitting on uh uh placing new orders in anticipation of uh 25:17 25 minutes, 17 seconds hoping for an ALM2 extension but you know we believe uh that uh the policy uh is here to stay and there will be no 25:25 25 minutes, 25 seconds further extension as and when you know we approach uh June 1 and that kind of decision line becomes here uh we will 25:32 25 minutes, 32 seconds see uh I would say a big uh rest for orders and I think uh you know FA27 should be equally good for the order 25:41 25 minutes, 41 seconds intake for us and for the industry understood. Uh thirdly sir on the resolution so fundraising resolution for 25:49 25 minutes, 49 seconds this 5,000 crores. Now could you just help with the rational for the same and how are we contemplating on the potential capital allocation here like 25:58 25 minutes, 58 seconds what are the areas that uh we might be thinking about. 26:05 26 minutes, 5 seconds So this this was an enabling resolution. 26:09 26 minutes, 9 seconds Um we had taken this approval from our board. There is no plan for any QIB or fund raise immediately. 26:18 26 minutes, 18 seconds As I as I told you, we're looking at opportunities in Europe, in US. As and when we see that there is an opportunity and we need to do a fund raise, we will 26:26 26 minutes, 26 seconds of course intimate. As of now, there are no plans. It was just an enabling resolution. 26:33 26 minutes, 33 seconds Understood. And last one, bookkeeping. 26:36 26 minutes, 36 seconds There is this sharp increase of inventory. I mean, your working capital is getting blocked. Now could you help like is it because like uh like we 26:44 26 minutes, 44 seconds building up the stock ahead of the module line coming up like crazy 16 by uh it's it's for two reasons one is 26:51 26 minutes, 51 seconds building a stock ahead of the module line and also because of the uh mid east crisis that we have stocked up u uh you know we planned this inventory levels 27:00 27 minutes and stock up understood this is extremely helpful sir all the best uh for the future and I'll 27:08 27 minutes, 8 seconds fall back in the queue thank Thank you. The next question is from the ninth naman jen from KC Institutional Equities. Please go ahead. 27:18 27 minutes, 18 seconds Uh hello. Yes. 27:24 27 minutes, 24 seconds Yeah. Uh my question is primarily on the bus business since it's uh the future is 27:31 27 minutes, 31 seconds solar plus gas and uh there have been multiple reports that uh the government government is going to push for a 50% 27:39 27 minutes, 39 seconds plus localization in best going forward right so seems like more of anmm moment for modules 27:47 27 minutes, 47 seconds uh so why and since you know the cex intensity is pretty low especially for containerized best solution where we are 27:55 27 minutes, 55 seconds not doing sales anymore. Why are we not pushing for a like let's say 12 GT capacity by March 2027 itself? Because 28:04 28 minutes, 4 seconds you know given the asset turns going to be very high. So might be you might you know be one of the earlier players in 28:12 28 minutes, 12 seconds the field and make up uh you know most of the profitability in the space in FI28. Yeah. 28:19 28 minutes, 19 seconds Yes sir. So I mean I think Nan you would have noted if you're following the government announcements uh and the and 28:27 28 minutes, 27 seconds the likely shape of the policy uh any localization road map is likely to become effective only by around FI28 or 28:34 28 minutes, 34 seconds so. Uh and as we speak uh you know there is uh you know the industry is primarily 28:41 28 minutes, 41 seconds basically relying on uh imports from China on which there is no constraint right now. uh and the duty level also 28:49 28 minutes, 49 seconds remains quite low at about 11%. So I think uh over the next one to two years uh we will still see continue to see uh 28:58 28 minutes, 58 seconds a big portion of the demand uh being met from uh imports uh and that is why we've decided to basically pace our uh 29:06 29 minutes, 6 seconds capacity addition program uh for for this business. 29:11 29 minutes, 11 seconds Got it. Got it. And uh secondly since you know we have been able to create sort of a capability where we can expand 29:20 29 minutes, 20 seconds cell capacity quickly and as well as at a lower k um how sure are we in 29:27 29 minutes, 27 seconds achieving uh the 7 gawatt uh capacities as in it sort of indicates that we'll be do able to do it in the half year which 29:35 29 minutes, 35 seconds will probably make it the largest pin cell right so uh is do we see any delays 29:42 29 minutes, 42 seconds or it's sort of like uh we really believe that it's going to happen and what's your expected timeline for stabilization after that? 29:51 29 minutes, 51 seconds Um so no one we had even you know said the same thing in our last earnings call that it's on track and if you look at 29:58 29 minutes, 58 seconds our presentation the um 7 gawatt plant 4.8 June and 2.2 September is on track. 30:05 30 minutes, 5 seconds It takes four to six months um for stabilizing these lines and um as we speak everything is on track. We don't see any significant delays. 30:16 30 minutes, 16 seconds That's it from Thank you. The next question is from the line of Abishek Nigam from Motila Losal. 30:25 30 minutes, 25 seconds Please go ahead. 30:29 30 minutes, 29 seconds Yeah. Hi, thank you so much for the opportunity and you know congratulations on a very good uh result despite all the volatility uh just on in the 30:38 30 minutes, 38 seconds presentation you know there is one slide on global opportunity uh so I was just wondering if you are able to give a little more details in terms of 30:45 30 minutes, 45 seconds specifically is there something that you're looking for either in module cell batteries any specific geographies that you prefer over others so so any any 30:53 30 minutes, 53 seconds thoughts over there that's my first question so on yeah so on solar cell we had announced our j with helen we had put it 31:00 31 minutes on a pause we have reinitiated discussions now we have also started looking looking for sites. Uh so we are 31:07 31 minutes, 7 seconds serious on our US solar cell plans on Europe. We are seeing a a great opportunity. The demand is about 80 31:14 31 minutes, 14 seconds gawatt peranom. Um there's also a mandate in EU for solar cells for inverters. So we are evaluating all 31:23 31 minutes, 23 seconds these opportunities. Um and as and when we are close to finalizing we would update the markets. 31:32 31 minutes, 32 seconds Okay. Okay. Fair enough. I understand. 31:34 31 minutes, 34 seconds And second on the battery side so you know everybody's doing capeex I see you are doing capeex and v is doing and others who are also sort of in the in 31:43 31 minutes, 43 seconds the frame uh markets have expected a localization policy for a while but you know of late there has not been much 31:50 31 minutes, 50 seconds from the from the government or uh from the ministry uh so is there anything you want to you know update us on on what is happening over there and if you expect a 31:59 31 minutes, 59 seconds localization policy could it be you know first half this year second half of this year anything you have over there? 32:06 32 minutes, 6 seconds Yeah. Uh sure Abish. So you know uh we feel that the government is completely committed uh to local manufacturing for 32:14 32 minutes, 14 seconds batteries. In fact uh batteries and all the other clean energy equipment uh be it wind turbines uh you know 32:21 32 minutes, 21 seconds electrolyers and all the other pieces of equipment over a period of time. uh with batteries uh I think uh the government 32:28 32 minutes, 28 seconds has been slightly conservative given that it's a nent market uh and there is a and there is a large need for batteries in the short run. There's more 32:37 32 minutes, 37 seconds than 50 gawatt hours of options which have been completed uh which have which have been done at very very competitive 32:43 32 minutes, 43 seconds prices. uh also uh you know given what the government and the market experience has been for ALM for solar uh the 32:52 32 minutes, 52 seconds government is planning to give uh about a 2year timeline to the industry uh to prepare itself. Uh we feel uh the government is very committed to this. 33:01 33 minutes, 1 second they've already held industry consultations uh and the thought process is very very consistent with what we have seen in LM2 33:09 33 minutes, 9 seconds uh and alm3 uh and we would expect the policy to be announced I mean you know it's very difficult to give exact indicators for government uh initiative 33:18 33 minutes, 18 seconds but you know it could be announced anytime over the next three to four months okay okay uh that's very useful thank 33:27 33 minutes, 27 seconds you so much I I'll come back in the queue thanks Thanks. 33:31 33 minutes, 31 seconds Thank you. The next question is from the line of Kathan Jen from Aendas Park. Please go ahead. Uh thank you. Uh good evening sir. 33:39 33 minutes, 39 seconds Congratulations on a very good set of numbers. Uh I just had a follow-up question from a previous participant. Uh I understand uh we've been able to 33:48 33 minutes, 48 seconds retain uh our margins and uh really appreciate it. Uh but uh h how has the price cost moved uh from January till 33:57 33 minutes, 57 seconds now? uh the bill of module bill of materials for modules how has it moved uh in terms of strength per 34:06 34 minutes, 6 seconds so you're talking about DCR modules you're talking about non DCR modules uh both both just the bill of material how has it decreased how has the cost 34:15 34 minutes, 15 seconds increased so on non yeah non DCR modules we have seen sell prices rising in China u they have gone up from three and a half cents 34:24 34 minutes, 24 seconds level to almost 6.2 2 cents. So it's like almost 80 90% increase on sales. 34:29 34 minutes, 29 seconds But since it's a pass through to the customers um module prices would would go up uh in line with China prices and 34:38 34 minutes, 38 seconds if you talk of DCR modules because of scale efficiencies um and you know the mix uh which is changing so we have been 34:46 34 minutes, 46 seconds able to maintain our margins and we are quite confident that you know going forward long-term margin trends should 34:53 34 minutes, 53 seconds be stable and uh likely even better because the mix is changing. What you need to understand is that the nonDCR 35:02 35 minutes, 2 seconds modules are gradually going to be phasing out and more of made in India DCR mix is going to be brought in as the 35:09 35 minutes, 9 seconds IP also start buying um DCR modules and we are quite confident that with scale and procurement efficiencies um we will be able to maintain um healthy margins. 35:22 35 minutes, 22 seconds uh is is there any increase in the bill of material as well apart from cell uh in uh in in the costing? 35:30 35 minutes, 30 seconds So for glass there has been uh no no increase because of the minimum input price. Uh for aluminium we have seen 35:37 35 minutes, 37 seconds around 11% of the module cost is aluminium there has been slight increase but again with design changes and frame 35:44 35 minutes, 44 seconds size optimization we have been able to mitigate those increase of of aluminium. Um so it's not been significant. 35:53 35 minutes, 53 seconds Understood. Uh so as you mentioned uh there have been a uh you know healthy sales mix. I think around FI25 we would 36:02 36 minutes, 2 seconds have had around 60% of nonBCR and around 40% of DCR. Did did do we maintain the same for FI26? Did we have the same mix? 36:11 36 minutes, 11 seconds So uh we never gave the FI25 numbers and but going forward I can I can give you an indication that every every quarter DCR mix is going to increase. 36:22 36 minutes, 22 seconds Okay. Okay. Uh uh understood sir. Uh thank you and all the best. I'll get back to the 36:30 36 minutes, 30 seconds thank you. The next question is from the line of Jakhar Porwal from Ambit Capital. Please go ahead. 36:37 36 minutes, 37 seconds Um thank you sir for the opportunity. uh just one question again a follow up to the previous participants question we 36:44 36 minutes, 44 seconds talk on um DCR non DCR modules on cells and the last call you mentioned two levels of uh cost saving one is um 36:53 36 minutes, 53 seconds silver reduction in your solar cell and second is hedging that we do for 6 months so uh one first session is on 37:01 37 minutes, 1 second hedging what is the policy right now because given plus 6 months silver prices and remain delicated so is the 37:08 37 minutes, 8 seconds cost increasing on Second, given you filed on the BC as well about zero busbar sales. So maybe there's some clarity u what could be 37:18 37 minutes, 18 seconds approximate production in silver consumption because of that because we've not heard of zero busbar from anyone and any breakthrough that 37:25 37 minutes, 25 seconds globally you are seeing in terms of reducing silver which maybe we can also do in coming quarters. 37:33 37 minutes, 33 seconds Yes. Hi Pakar. So you know on silver we've had extensive discussions uh in the last call also 37:40 37 minutes, 40 seconds uh and uh you know uh we maintain sufficient stock at any given point of time uh and obviously also undertake 37:48 37 minutes, 48 seconds hedging as we said last time. The other thing what we have started doing now uh is that we have started passing uh the 37:56 37 minutes, 56 seconds silver cross risk to uh our customers and all the new orders uh that we are signing. uh so as a result of you know 38:04 38 minutes, 4 seconds all these initiatives uh we are not uh affected uh by uh silver uh costes uh 38:11 38 minutes, 11 seconds going forward I would say uh second uh you know in terms of uh you mentioned about the potential for reduction of 38:20 38 minutes, 20 seconds silver usage in our uh uh production. So the zero phras modules or cells uh they use uh lower silver by as much as about 38:29 38 minutes, 29 seconds 10% reduction uh in silver uh and we believe that you know and uh longer term we have got lot of other initiatives uh 38:37 38 minutes, 37 seconds again as we discussed last time also uh including a potentially a complete replacement uh of silver with copper 38:45 38 minutes, 45 seconds paste or even aluminium paste uh that I would say broadly is about uh 1.5 to two years away but in Meanwhile, we are 38:53 38 minutes, 53 seconds working on a comprehensive program including reducing the silver consumption uh hedging uh and passing the cost to our consumers. 39:04 39 minutes, 4 seconds Sure that is very helpful. Second uh question from the order book if I look at the order book mix 60% sales in 40% 39:12 39 minutes, 12 seconds modules and very rough calculation maybe suggests around four four and a half of module order book. Um so my question is 39:21 39 minutes, 21 seconds given we'll have 11 gawatt order of u model capacity um largely for the entire year. So will that mean reduction in 39:30 39 minutes, 30 seconds utilization levels and how to look at that that is one and second is uh given it is a very big sell order book. So 39:39 39 minutes, 39 seconds does this mean that we're selling to players who are more dominant in the retail category where um we don't have 39:47 39 minutes, 47 seconds that dominance right now and so what are we doing exactly to maybe increase our presence there? Those are the questions. 39:55 39 minutes, 55 seconds Um so just to clarify on the sale order book sometime portion of the order book also goes into FI28. 40:03 40 minutes, 3 seconds So it's not of FI27 itself. uh these are contracts with module manufacturers whom we'll be supplying sales next year also. 40:11 40 minutes, 11 seconds Um in terms of u module utilization we are u uh you know at almost about 11 40:17 40 minutes, 17 seconds gawatt taking a 75% kind of a uh utilization that's about 7 7 and a half gawatt um and then orders we also read 40:26 40 minutes, 26 seconds some um uh you know potential possibilities of getting orders in every quarter. So these are orders which are in the order book which are long-term 40:35 40 minutes, 35 seconds orders. Uh whereas every quarterly there's the order book which also comes up. 40:40 40 minutes, 40 seconds So you know just to add to that uh you know I'll again point to you know if you look at the makeup of the market uh almost half of the market is 40:49 40 minutes, 49 seconds basically coming from the rooftop and the CNI uh segments. uh the rooftop segment uh shows up in our order book 40:58 40 minutes, 58 seconds because those are mainly cash and carry orders uh and they're booked on a daily, weekly, monthly basis. Uh and the CNI uh 41:06 41 minutes, 6 seconds market this is basically about estim estimated at about 15 gawatt. Uh the ALM2 has become uh is becoming 41:15 41 minutes, 15 seconds applicable now and uh with that I think we are likely to see a surge in order placement by these customers. So uh in 41:24 41 minutes, 24 seconds general we are very very optimistic that we will see uh the order pipeline is already very healthy and we will see a 41:31 41 minutes, 31 seconds large uh a surge in order booking by customers uh which will basically uh 41:37 41 minutes, 37 seconds allow us to also uh fulfill our uh or uh fill our production capacity 41:44 41 minutes, 44 seconds and this also just one clarification for the rooftop segment that you created through um the cash and ferry distributor modeling. 41:54 41 minutes, 54 seconds That's right. Yes. 41:56 41 minutes, 56 seconds Okay. Okay. Thank you so much and all the best for the coming. Thank you. Thank you. 42:02 42 minutes, 2 seconds Thank you. The next question is from the line of Adate Vikram from DB Securities. Please go ahead. No, all my questions were answered. 42:10 42 minutes, 10 seconds Thank you very much. 42:13 42 minutes, 13 seconds Thank you. The next question is from the line of Kunal Sha from Dam Capital. Please go ahead. 42:19 42 minutes, 19 seconds Yeah, thanks for the followup. Uh sir on the cell technology now we've been much ahead of the industry uh we were among 42:26 42 minutes, 26 seconds the first entries the D12 ourselves and now zero busar as well so what is the efficiency level in the zero buzzbar how 42:35 42 minutes, 35 seconds are like how how is it getting received by the customer like what feedback are you getting and what would be the timelines for achieving the 25.8% the 42:43 42 minutes, 43 seconds efficient that we sort of highlighted like let answer this question I think on the 42:52 42 minutes, 52 seconds efficiency front is going to be about.1 to.15% higher efficiency this is uh basically 42:59 42 minutes, 59 seconds due to higher exposure area uh but in the zero bus bar uh but that said it has 43:07 43 minutes, 7 seconds other advantages with respect to more robustness to shading and micro cracks that's the main advantage with respect to zero bus bar when we use 25.8% % efficiency. 43:19 43 minutes, 19 seconds We are currently at an average efficiency in the top corn line at about 25.5. 43:24 43 minutes, 24 seconds Uh now that we are getting it stabilize these lines with a 90% utilization uh we expect to move forward uh uh gradually 43:33 43 minutes, 33 seconds over the next few months uh one step at a time. Uh I would say at least it will take us uh couple of more quarters to 43:40 43 minutes, 40 seconds get to that uh kind of efficiency levels. 43:45 43 minutes, 45 seconds Understood. This is helpful. And so just to follow up here now from here on like how do you see this efficiency curve 43:52 43 minutes, 52 seconds panning out like what are the further tech upgradations or improvements that we are working upon you know which has already worked in China and uh it could 44:01 44 minutes, 1 second just provide some insights over there see I think currently uh if you see the efficiency trends in China they are on a 44:10 44 minutes, 10 seconds mass production it's still hovering around 25.6 to 25.8 date even for the Agrade ones what you see these 44:18 44 minutes, 18 seconds announcements around 26 and all are more for the champion cells and not the mass production cell efficiencies uh with the 44:25 44 minutes, 25 seconds topcon technology you hit a bar somewhere around 26% to 26.1%. 44:31 44 minutes, 31 seconds Uh beyond that efficiency improvement uh just at the topcon cell is not possible. 44:37 44 minutes, 37 seconds It will need more innovations uh more into tandem cell technologies uh back contact uh and all these kind of 44:45 44 minutes, 45 seconds newer technologies which will take some more time to mature uh on a mass production scale. 44:53 44 minutes, 53 seconds I think at least couple of more years from two to three years at least from seeing mass produced tandem uh modules. 45:04 45 minutes, 4 seconds Got it. Got it. This is very helpful sir. Second, in terms of the backward integrations, you've talked about aluminium frames. So, are there any 45:11 45 minutes, 11 seconds other verticals also that you're looking or contemplating upon in terms of insourcing of raw materials or anything 45:18 45 minutes, 18 seconds of that sort kunal I think uh you know that remains 45:26 45 minutes, 26 seconds uh a watching piece for us. Uh you know we have to wait and see how the government policy evolves. Uh we know that the government is quite keen to 45:33 45 minutes, 33 seconds start uh getting all these components uh also made in India. Uh but what is the exact policy and what are the timelines? 45:40 45 minutes, 40 seconds Uh we will have to kind of wait to see how that shapes up. Uh and accordingly we will decide uh what is best for the business. 45:50 45 minutes, 50 seconds Got it. And so now lastly on transformers like it's a bit uncal with respect to the upcoming uh 10 GB 45:57 45 minutes, 57 seconds capacity. Could you just give some like how do the milestones look like here in terms of uh getting the required 46:04 46 minutes, 4 seconds certification and especially because it's an HD segment how are we progressing on the talent acquisition as well could you 46:12 46 minutes, 12 seconds just thank you yes sure so uh Kunal in terms of milestones uh this plant is due for 46:20 46 minutes, 20 seconds completion in July this year uh and uh the good thing is that uh because of the strong management agement team in place 46:29 46 minutes, 29 seconds uh and the fact that the company already has existing production facilities. Uh they have already started uh you know producing some of the larger 46:38 46 minutes, 38 seconds transformers and doing p testing uh and certification work which can take uh as long as 6 to 12 months. So I think the 46:45 46 minutes, 45 seconds company is making very steady progress on that. uh in terms of management team uh you know there is already a strong management team as we have shown in our 46:54 46 minutes, 54 seconds previous uh presentations which is X uh Toshiba and some of the other uh majors in the electrical goods industry uh and 47:03 47 minutes, 3 seconds uh we believe that the company is already secured uh uh amongst their first orders. So you know it will take 47:10 47 minutes, 10 seconds about 2 years for the company uh to fully ramp up uh their operations but they are well on track uh uh to uh 47:18 47 minutes, 18 seconds beginning commercial production and achieving certification in this timeline. 47:23 47 minutes, 23 seconds I missed it. Need a clarification who from which like which client have we got the order from? 47:31 47 minutes, 31 seconds If you can see unfortunately I can't give you the client name. uh kunal I missed it. This is very helpful sir. 47:40 47 minutes, 40 seconds Thank you so much. Thank you. 47:44 47 minutes, 44 seconds Thank you. The next question is from the line of Vanitra Banerjee from Nura. Please go ahead. 47:51 47 minutes, 51 seconds Yeah. Hi, thank you for taking my question and uh congratulations for a very good set of numbers. Just wanted to ask one bookkeeping question. So on 47:58 47 minutes, 58 seconds slide number 22 the sales that you have mentioned is 21,751 million whereas in the reported uh 48:06 48 minutes, 6 seconds financials the sales number is uh 22,3 will exceed the revenue from operations. 48:11 48 minutes, 11 seconds So just wanted to understand why the difference. 48:16 48 minutes, 16 seconds Yeah sure. Uh so what you see uh on this slide uh Aritra is only the cell and module uh sales because this order book 48:24 48 minutes, 24 seconds is only for cells and modules. But in addition to this we obviously have the projects and the EPC business. So the rest of the revenue uh is coming from that line which is not showing here. 48:36 48 minutes, 36 seconds Okay sir. Understood. And uh another question I wanted to ask was you know sequentially the share of modules in the 48:43 48 minutes, 43 seconds revenue has gone up but still like the overall margins in cement table. So I understand like the VCR uh share in the 48:50 48 minutes, 50 seconds module revenue has also gone up but uh uh typically like sales have uh sharper margin profile than VCR module business 48:59 48 minutes, 59 seconds as well. So uh going forward even like uh going forward even if the sales uh share in the revenue comes down are the 49:07 49 minutes, 7 seconds margin still expected to remain same or or in other words are like VC uh module uh business revenue and sell uh business 49:15 49 minutes, 15 seconds revenue margins the same could you please share some color on that 49:21 49 minutes, 21 seconds so you know I think unfortunately we can't uh predict the future and we can't say how the margins are going to play out in future. 49:30 49 minutes, 30 seconds uh but you can see uh what is the current uh shape of our order book uh and uh and we've said earlier that the 49:38 49 minutes, 38 seconds order book pricing is consistent with what we have seen uh over the last 6 to 12 months. So you know that gives us a good visibility in terms of the volumes 49:47 49 minutes, 47 seconds as well as as well as pricing and margins. uh but going forward uh the mix is only going to become more favorable 49:55 49 minutes, 55 seconds uh wherein the DCR uh share is going to grow at the cost of the nonDCR market uh which is a much lower uh margin market. 50:03 50 minutes, 3 seconds So overall I think the margin uh outlook for the business is likely to be favorable uh going into the future. 50:13 50 minutes, 13 seconds Understood sir and this uh one last question regarding the A and two implementation. So hypothetically speaking, if it doesn't get implemented 50:21 50 minutes, 21 seconds let's say in June 2026 or it gets uh delayed by someone. So is there any risk of some of the orders in our current order book getting cancelled uh going forward or is that not a material risk? 50:34 50 minutes, 34 seconds No, it's not a material risk uh because none of the orders in our order book um are you know from the uh CNI segments 50:43 50 minutes, 43 seconds which have deliveries in the next two or three months. So if you look at what business is going to come up from 1st June, it is going to be the CNI business 50:52 50 minutes, 52 seconds which will immediately move into the DCR mix and most of the CNI um developers have finished or have completed their installations with the 1 June deadline. 51:03 51 minutes, 3 seconds So the orders in our order book from that segment are post October November. 51:09 51 minutes, 9 seconds So even if the DCR of the implementation get delayed by the quarter, it would not affect any of our orders and um uh we don't see any material risk there. 51:20 51 minutes, 20 seconds Wonder uh thanks for the answers and all the best for the upcoming quarters. Thank you. 51:28 51 minutes, 28 seconds Thank you. 51:30 51 minutes, 30 seconds Participants who wishes to ask a question may press star and one. 51:41 51 minutes, 41 seconds As there are no further questions from participants, I now hand the conference over to management for closing comments. 51:49 51 minutes, 49 seconds Yeah, thank you. Uh so uh thank you everyone for your time. Uh I appreciate it's a Friday evening. uh you know just 51:56 51 minutes, 56 seconds to conclude uh the call uh and how we see the business uh see there is a lot of noise in the market in relation to demand slowdown uh strong competition 52:05 52 minutes, 5 seconds cost and margin pressures etc. uh uh we believe that our performance over the last year has been a very strong 52:13 52 minutes, 13 seconds validation of the company's overall business strategy uh management competence uh and execution. Uh in 52:20 52 minutes, 20 seconds general we are very very positive uh on the growth outlook for the sector given all the initiatives by the government uh and we are now in fact beginning to 52:29 52 minutes, 29 seconds think uh beyond the current plans and looking to next stage of growth uh in terms of products technologies uh and 52:36 52 minutes, 36 seconds geographies. Uh we are grateful for your support and look forward to working with you. Thank you very much. 52:43 52 minutes, 43 seconds Thank you ladies and gentlemen. On behalf of ICA Securities Limited that concludes this conference. Thank you for joining us and email out this connector line.