Vikram Solar (NSE:VIKRAMSOLR) Q1 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to the Vikram Solar Q1 FY 'twenty seven Earnings Conference Call. 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. Please note that this conference is being recorded. I now hand the conference over to from Go India Advisors. Over to you, ma'am. Thank you, Ananya. Good afternoon, everyone, and welcome to Vikram Solar earnings call to discuss q one FY twenty seven results.

0:47 We have the senior management with us on the call. We are joined by mister Sameer, chief executive officer mister, chief financial officer mister Arun Victor, CEO of BSL Power Private Limited, spearheading the company's battery energy storage system business and miss Vinal Shah, general manager corporate finance. We must remind you that the discussion on today's call may include certain forward looking statements and must be therefore viewed in conjunction with the risks that the company faces. May I now request mister Sunil Nagpal to take us through the company's business outlook and financial highlights, subsequent to which we can open the floor for q and a. Thank you, and over to you, sir. Thank you, Sheetal.

1:33 Good afternoon, everyone. As we gather in this auspicious month of Sabha, I extend a warm welcome to all our stakeholders seeking Lord Shiva's blessing for his wisdom, strength and sustained prosperity in our journey ahead. Before delving into the details with respect to the performance of the company, I would like to give a context to the quarter one line. Three things shaped this quarter. First, ALMM-two enforcement stayed unclear for most of the quarter before the mandate was implemented and then deferred to December 2026. That uncertainty held back buying decisions and it showed up in our order flow.

2:23 Second, the ongoing growth conflict pushed up the cost of metal, crude linked raw materials and trade. Third, being the share volume of new module capacity that came on stream industry wide, which made competition intense and did not allow a full pass through of these costs, the impact of which you see in our numbers. The most important story is what we have accomplished because underneath the margin optics, this was a quarter of building and repositioning. This quarter, we clocked our highest ever quarterly volume of 1,006 megawatts, up 32% on the same quarter last year.

3:10 Revenue grew 38% year on year. Let me now talk about our commercial engine where the repositioning is really happening. Our order book closed at 7.9 gigawatts and its composition is shifting towards a diversified customer base, which helps us improve price realizations. The large accounts non DCR order book that includes utilities, IPPs, large C and I customers still constitutes a lion's share of our outlook. On account of the ALM2 government on July 18, these that have been sitting in limbo now are going to move forward. And the 50 gigawatt a year C and I demand that was waiting for policy clarity has resumed conversation.

4:02 To serve the DCR side, the priority has been locking up cell supply. We have now multiple procurement partners for domestic sales and the same reflects in our revenue mix starting this quarter. We have sold 76 megawatt of DCR models this quarter, which exceeds the full year number for the last fiscal. In the subsequent quarters, we expect the numbers to increase many fold. Increasingly, that volume reaches the market through distribution, a channel that used to be supplementary for us and is now becoming strategic. Our monthly run rate has doubled in distribution from roughly 40 megawatt last year, and we now have a network of 119 plus distributors and over seven fifty seven dealers across the country.

4:54 That reach lets us tap into policy driven installations under the PM Solar Tribe and PM Kusin Lodzan. And our presence across 24 states and 500 districts gives us a real structural advantage in getting to those customers. And alongside distribution, we have been reshaping who we sell to, moving deliberately into the mid market, where we have doubled our sales team this year. Vikram Solar has historically been a large account company, the right shape for our market with fewer larger customers. But the market has broadened, mid sized EPCs and mid sized C and I clients are a growing share of the demand pool.

5:40 And we are building the sales force to match where the customers are now. It carries margin benefit too. We expect roughly 50 paisa per watt peak higher price realization from this customer base. Taken together, the DCR supply, the July development, unlocking decisions, the distribution ramp up and the mid market build out. That is why we are confident about Q2, H2 and H2. We are restructuring how this business goes to market and the shifts we are making now are what will carry us through in the next few quarters. This is our domestic picture. Alongside it, we are widening the aperture internationally.

6:27 We are accelerating our global expansion with a dedicated international team. Global buyers are diversifying their sourcing and tightening supply chain flexibility and a credible manufacturer with verifiable India build provenance is exactly what that ship calls for. Having talked about the commercial engine, now let me move to project execution. We have stayed the course on our project expansion commitments. On June 29, the first module rolled out from our Gungai Kodan facility on the date we had promised it would happen. On the cell line, Lunghai Kotan is on schedule. Civil and PV works are advanced. Clean room and MEP plans are on track. The first cell remains targeted for Q4 FY twenty twenty seven, taking us to roughly 70% into backward integration.

7:30 And the cell plant is really one piece of a larger design. We are building all three plants in the paper, cell and module inside a single bench at Gangai Khosan because the design itself is an advantage. The capacity here is modular, ingot and wafer scale simply with the number of pullers and slicers we installed. That lets us face capital precisely to demand and to policy and add capacity quickly once the enabling infrastructure is in place. That's the upstream story. Downstream at the module end, the technology has moved to. We have transitioned our module portfolio from M10R to G12R across the platform. I work per module, lower conversion cost per unit and it flows through per watt economics.

8:21 Both Vallam and Gaglikrai Total are built on substantially more automated lines than our legacy capacity. And the operating metrics already bear that out. Manpower deployment has come down to around by around 40% with a comparable improvement in line cycle time. Taken together, we expect substantial conversion cost optimization at these facilities relative to our older mines. So the same volume that today carries a ramp up penalty will at full utilization be produced at a structurally lower cost per watt than anything in our existing base. Before I close, I will share one recognition from the quarter that means a great deal to us, because in our industry trust compounds.

9:13 Vikram Solar received the Equal Wattice Platinum rating second time in a row, placing us in the top 1% of the 200,000 companies assessed worldwide. It strengthens our standing with global buyers, lenders and it supports the premium position we are building in the market in India, in EU and in The U. S. Let me close. Stepping back from the quarter optics, here is what actually happened in a soft market. Within our first module rolled out of the way go run on the daily promise. Our DCS supply is secured to the ramp up. Wifferringer breaks ground shortly. Cell plant is on track and our go to market engine distribution mid market and DCS and now international is being rebuilt for where demand is heading.

10:07 With this, I will hand over the mic now to Mr. Arun Mittal for an update on our best business. Thank you, Sameer. Let me share the update on BSL PowerHive plan on BEST. So BSL PowerHive has made a master plan of setting up 15 gigawatt of integrated cell manufacturing and best assembly in two phases of 7.5 gigawatt hour each. The update on Phase one is our 7.5 gigawatt hour best assembly plant is getting ready in Chennai. We ordered all the equipments around three months back and the delivery of the equipment is planned in November 26.

10:56 The utilities are under installation. We expect the plant to get installed in the month of January 27. And the target date for commercial operations is from March 27. This is the update on the best assembly plant. We have also made significant progress on the Phase one, 7.5 LFP cell manufacturing plant. So we have shortlisted the land options in two states, and we are in active discussions with both the state governments on optimizing the incentive package. We are confident of finalizing the land and the incentives by September 26.

11:43 We have also finalized the technology and manufacturing partner who will help us in setting up this 7.5 gigawatt LFP cell manufacturing plant. We are looking at LFP Gen two large format cells and not the Gen one format. And the tentative commercial operation date we are targeting is quarter four of financial year twenty nineteen. While all this is happening, also happy to share that we have launched the PowerHive brand for the C and I and the utility scale solutions. And we have also executed our first order of 20 megawatt hour utility scale solution.

12:29 This is the update on the battery business of VLSI Power Ride. I will now hand over to Mr. Ranjan Jindal. Thank you, Arunjit, and thank you, Sameer. So good morning, everyone, again, and thank you for joining us. I'm accompanied by Inal Shah from our Investor Relations team and our advisers, Go India. Our Q1 earnings presentation is available on the exchanges and is also available on our website. Before the numbers, a quick word on the backdrop. The market around us kept expanding. India roughly added 12 gigawatts of solar in the quarter with a record rooftop contribution under PM Sulya Kharajuna and storage building in parallel. The quarter also shaped two big policy steps. The ALMN II sell mandate to CapEx on June 1.

13:17 And on July 18, the ministry issued the operating memorandum on ALM2, giving the C and A segment a calibrated relief. Much of the industry spent the quarter resolving the change and customer decision making moved accordingly. Revenue from the quarter revenue in quarter was about INR $2.66 crores, up 88% sequentially and close to 38% year on year. We dispatched 1.06 gigawatts broadly flat in line with Q4 and up nearly 32% on the same quarter last year, which is a scale our expanded capacity is now delivering. EBITDA for the quarter was at INR 126 crores at a margin of 8.06% and PAT was at INR 19.78 crores. EBITDA is down on the quarter, and I want to be clear about the shape of it because it is not what the sector headlines would lead us to assume.

14:09 This was not a broad margin squeeze. Two things actually went in our favor. Our relation improved and every cost line below the gross margin improved. The entire movement sits in a single line, which is the cost of goods sold. Let me now take a turn of it. Let us start with the relation again because it is a standard for the quarter. Our per watt peak relation rose to 15.02 per watt peak, up 8% sequentially. The driver here is a mix, not the price. As Sandeep mentioned, we got about 76 megawatts of TCR modules in the quarter. And because DCR product carries a highly relation that lifted our overall branded number. With several domestic sales procurement agreements now in place, we expect the DCR mix to rise further in the quarters to come.

14:59 It helps us to see the revenue led. Our IPP and utility business is a base load of the book, large, steady volumes, but at the margins. The foundation, everything else is on. Mid market and the C and I sit above that. Smaller orders that price better and lift the blended margin. And the distribution segment is the fastest moving segment of the three and the richest on the gross margin. It was also our fast growing channel this quarter. As a mix is more towards the high margin layers and towards the product, the realization rises and that is what came through the 15.02 per watt peak realization. Against that, our unit cost for the goods rose by 1.86 per watt peak in the quarter, and that single line is affecting the whole of the gross margin movement. Let me take you through what drove it because the conversion matters a great as to how this unwinded.

15:53 The last part of it was related inflation in base metals. Aluminum and copper prices ran up sharply and those feed directly into our aluminum frames, our bus driven and our interconnect driven, constituting about 35% of the balance of raw materials. With those metals move, onethree of our input basket moves with them. On top of that, the spike in the crude oil went into the EVA, a critical encapsulate, which is about 200% of our balance of raw materials also through an inflation. Then there is cell cost, which hit us in two ways, Chinese cell prices spiked in the previous quarter and because that closed for inventory, it was this quarter that took the run of it. Taken together, the great majority of this cost increase is either input price driven and will ease as metals, crude and sell prices normalize and as older high cost stock works too.

16:46 We are not leaving that to inflation alone. We have a deliberate program underway to bring conversion costs down. Value engineering across the bill of materials and automate vendor procurement strategy to broaden sourcing and lower input cost, rationalizing logistics by aligning inbound and outbound payments to the production plan, moderating discretionary overheads, tightening the inventory cycle to reduce working capital and cut the carrying cost. Scale is what makes this program powerful. Each of these levers is a per watt saving and with our volumes growing at pace as the new lines come in, every rupee takes out per watt multiples across the larger base. So the absolute savings this initiative deliver will be substantial and will build quarter on quarter. Some of this is already visible in the quarter numbers. Other expenses per watt came down to 6% and the finance cost per watt fell over 11%.

17:41 Employees cost stepped up modestly and deliberately as we start the new lines ahead of the volume they will carry that absorbs a utilization basin. These are early needs. Fullest benefit of the program will show through over the coming quarters as initiatives mature and the two ramping facilities fill out. Our balance sheet remains a genuine source of strength for us. We continue to carry no long term debt even today. Working capital utilization came down over the quarter and the net debt to equity is almost negligible. We have not drawn on the sanctioned CapEx activities as a drawdown is sequenced to project milestones. On the build itself, we deployed approximately 500 crores of CapEx this quarter, 80% towards the model facility and the balance towards the cell plant with both programs on their committed time lines.

18:29 Let me now put the capital plan in a single frame because it is the heart of the overall investment case. We are building a fully integrated platform at Gundai Gondal in three stages. A six gigawatt module facility, which is fully funded, a nine gigawatt cell plant currently in built and a nine gigawatt wafer and ingot facility, which received the Board approval for increase from INR 6 gigawatt to nine gigawatt yesterday. We anticipate to deploy roughly INR 4,700 crores of rest of the CapEx in this year. By 2030, the Gourmet Gundam site will be live end to end, a policy aligned margin accretive made in India supply chain from India to module. And because of all three figures sit inside a single fence, four location lets us take a large part of the fixed overhead out.

19:16 One utility base, one shared intra, no transport and no handling stages. All of it stays inside our capital discipline framework. The committed capital does not breach our leverage at peak drawdown. Growth will not come at the cost of balance sheet, let us be rest assured. The integrated side is a compounding asset. Each stage we bring in our captures margin that currently fits with an external supplier and lowers the delivered cost of the stage below it. That is why we are investing now in the energy infra, land, power, water, evacuation ahead of the capacity that sits on it. When the wafer and ingot content made under ALM and are staggered, wafer bag demand comes into the mainstream, we intend to be ready to deploy capital on augmenting wafer and ingress capacity quickly at lower incremental cost and in step with the policy. In effect, we are buying that opportunity now and buying it cheaply.

20:14 We shared a formal outlook for FY 'twenty seven on our May 8 call. Given the shape of this quarter and the ramp ahead of us, we will revisit that outlook at our H1 results again. Let me leave with you four things to take away. One, pricing power in the non diesel market is under pressure, and our answer to that is the mix. We are steadily shifting revenue towards the higher margin mid market and the distribution channels and towards the product. The cost pressure is real, but it is identified, concentrated in one line and largely transitory. The balance sheet is effectively debt free. And the integrated platform we are funding is what converts this year's investment into a structurally lower cost base and compounding returns in the years ahead.

21:00 We have moved through those cycles earlier, and we know the discipline they require. With that, we'll now be happy to take your questions. Thank you. Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone phone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

21:53 The first question is from the line of Deepak Portswani from Swan Investments. Please go ahead. Yes. Hi. Good afternoon,. Thank you for the opportunity. So firstly, wanted to confirm what was the spread per what during this quarter? And secondly, wanted to understand, if I understand correctly from the cost inflation point of view, 88% of our order book had a cost escalation clause with the client. So what led to... I mean, what was the reason this was not passed on to customers? And if you can help us understand this and along with this, ALM...

22:40 ALMC has postponed to the December. With this, are we seeing stabilizing in the price now? And what is the current rate at this point of time? Yeah. Hi, Deepak, and thanks for the question. We shall answer the second part first, which is a critical concern for all of us to think about. Yes. Our our MSS do have the benefit of pass through, but as we have told earlier and just clarified giving our earlier calls, this pass through is only for the sell and not for the bomb. And in my remarks, as I mentioned, with the transportation and the cost of EVA and the cost of metals going up, the impact of increasing cost has also come in the warm part, which was not been able to pass. That is why. And even on the same front with lot of oversupply, it was not fairly easy for us to get fully accommodated with the selling prices of the customers.

23:38 So the increase in cost was not fully considered with the corresponding increase in selling price and the on the margin. Now if I come back to your question one, it's a plain math to show that the EBITDA of 125 crores over the volume of one gigawatt effectively delivered with 1.25 per watt fee. So with this stabilized, I mean, since ALMC has been deferred to December, we understand that now the non DCR demand is again back into the system. So in this context, where we are at current juncture on this straight part, have we seen any hike in this rate? So as we... As I mentioned, with the policy policy visions to get fully streamlined because the decision of the government on July 18 to defer the date till August 31 was March fully in place.

24:39 So let us wait for one more quarter to see as to how the overall margins on the VIKRAMSOLR panel, which will then help us formulate the yearly guidance better. Okay. Second part of the question is on the order book front. Our current order book is somewhere close to, I think, eight gigawatts. How much of this is executable in this year? And if you can also help us understand in terms of the volume for this year, how we are looking at the current juncture now? So, Deepak, again, from the production point of view, as we told on the end of June, we have commissioned model plant. So from capacity point of view, we are fully equipped to deliver 15.5, which effectively can deliver 9% to 9.5% for the whole year. But it will all depend on how the overall market pans out. Obviously, we will not be picking up orders, which will have negative margins. So we'll be conscious to see as to what the overall volume hit the top line.

25:44 Okay. And how much is the order executable in this year? Sorry, Deepak, repeat that for me, please. Can you please help us understanding out of this eight gigawatt order book, how much is the executable in this year and the remaining three months nine months? So it will depend based on the plan, we did have some clarity, but now there are some change the plans of the customers as well. Allow us one more quarter to have a better clarity on the year as a whole, both on volumes and the pricing front. Okay. And thirdly, since we started for the DCR market and there is... There has been some contribution on the DCR market this time, if you can help us whether the spread for our DCR is similar to the non DCR? It is lower than the DCR at this point of time for us.

26:45 Sure. So this quarter, as Sameer mentioned, we delivered 76 megawatts. So it's only the ramp up. We have now started doing... Adding more of volume to the EPR supplies. Yes. The ETR obviously delivers more than what in on ETR. And since we had some two gigawatt kind of external arrangement with some third party, In that context, whether this two gigawatt would be entirely executable in this year and spread would be better than what we have seen at this point of time? Yes. Yes. Okay. And finally, if you can also help us on the cell line point of view, I mean, this... And if you can just update us on the project trend point of view. Are we on track to start the cell line at the end of q four?

27:38 Yes. Sameer here. Sameer here. Yes. We are on track for q four for sellout and commissioning and then thereafter that. And this entire nine gigawatt would come on on stream during q four? No. In that 90 kilowatt may not come during the q four. It may spread over to the next q one. Okay. And during q four, what would be the kind of capacity which which could come on stream? So the nine gigawatt capacity will get commissioned during Q4, but the ramping up may Yeah. Yeah. Ramping up. But from the commissioning point of view, we are on track. Right? Yes. Yes. Yes. We are on track.

28:24 Okay. I have follow-up. I will come in the queue. Thanks. Thanks for clearing that. Thanks. Thank you. Thanks, Deepak. Thank you. The next question is from the line of Praveen Sahai from PL Capital. Please go ahead. Yeah. Hi. Thank you for taking my questions. So some more color on the spread because in this quarter, we had seen a contraction in this spread as well as we had seen a DCR numbers as a contribution also has increased. Also, highlighted DCR has a better respect for you compared to the non DCR. So can you give some more color on that? Because for this year also, are buying from the outside market to sell, and those sell we are looking at the companies, and they are reporting there a very high margin.

29:19 So how differentiation in terms spread or DCR, non DCR for you? Is that a big delta is there or just a few percentage point? So Praveen, as you rightly mentioned, yes, the cell manufacturers do retain the... Most of the the margins. But for us, the presence in the retail market is always important. And maybe I'll repeat, but the will deliver and does deliver margins more than what the would be. Why we are refraining from giving you an annual number or a guidance for the next quarter or the quarters to come is that q one has just seen 75 megawatts of TGR. So TGR volumes will now flow in, which will help us stabilize our EBITDA for what we can have a form on the DCR front.

30:11 And even on the non DCR, as Sameer mentioned that the spillover of the previous quarter's inventory hit the non DCR EBITDA for the current quarter with... And with the war things now getting settled. The... Even on the non DCR front, we expect some rationalization and clarity on the margins better than what we saw in Q1 at least. So allow me to continue with this for the time being, maybe in the next quarter, we will be more than keen to help you with better numbers. Right, sir. One on the positive side, like last two quarters, q four and then now q one, we are... We had done nearly one gigawatt. So, also, we hear the... One of the...

30:56 Another player call, and they highlighted about the influx of a nondCR model in the q one because of all regulation change. So is there any element to that as well reflected in your number, which is expected to normalize in the coming quarters? Yes. So, Praveen, for us, anyway, the split in the revenue mix was due towards the NGCR for this year. Having a C and I, which is 15 gigawatt a year kind of a market, most of their volumes now shifting to non DCR compared to the earlier estimate of DCR would reduce the overall country's consumption of DCR for the year. Earlier estimate was somewhere close to about twenty twenty five. Now that number will look closer to about 70 is our estimate.

31:51 So... And just, you know, I'm just clarifying on the volume side more that there is a rush of the influx of a non discount, and that's led to the very high volume of a one gigawatt. There any element to that? Will this volume to continue or you expect to coming quarters with the normalization will come down? Praveen, our volume per quarter are a function of the backlog... Order backlog that we have, and our module plans are ramping up. So we do not anticipate any slowdown in in that. I mean, the C and I effect is yet to come and yet to be seen in the coming quarters.

32:39 The country's consumption remains on point. We did 12 gigawatt in the last quarter. So it is not a one off. Okay. Nice to hear that. Second question is related to order book. Definitely, like, 7.1 gigawatt is from the large accounts, and it's a mix of a DCR and non DCR. So how you are, you know, anticipating, especially the spread in these particular large accounts? Because if there is a there is a some big element to that of... Which is non... You know, cost is as... You know, sir has already mentioned that only for the sale cost, there is a cost escalation clause not for the other things. So how you are looking at the spread, especially in the 7.1 gigawatt?

33:33 Because the cost is still on the higher side for, you know, the the related acts of the sale as well. So Praveen, before I start, one factor correction. The 7.1 gigawatt does not include any of the DCR business. And as we mentioned, distribution is not part of our order book, and the DCR today is mainly to our distribution. So the 7.1% is entirely non DCF from the order book point of view. On margins holding point of view, again, as we saw that even if we anticipate or believe some margin to be restored there, It will all depend on how we are able to seriously get the cost part to implemented. As we're actually told that, yes, the country is credited with two ten gigawatts and there is lot of oversupply.

34:22 So that is hitting us on the margins to some extent. And again, at the cost of repetition, allow us one more quarter to have better clarity on the margins, both on the and on the. Okay. On the CapEx side, that is... You know, that you highlighted about the 7,000... 4,700 odd crore for integrated facility. Can you give a a, you know, time line like this year, next year, how much is the CapEx plan for you? So what we can do, Praveen, as we discussed that the year as a whole, we'll be delivering the nine gigawatts l nine. The five... The six gigawatt module is fully funded. We can kick start with lower lower commitments on the recurring project to cash the commissioning deadline from that in the February 9. And as mister Mitchell explained, the bill commissioned 7.5 gigawatt module assembly, plus some contribution going towards the 7.5 gigawatt cell plant also.

35:24 All going well this year looks at an investment of about 5,000 crores, of which INR 500 has already gone, of which have not taken any data up till now. We'll start the disbursements somewhere in the end of this month, where the money is coming in from the debt to fund the project. Okay. So 500 crore, you had already Sorry to interrupt. Sorry to interrupt, mister Praveen. Could you please rejoin the queue Oh, yes. For any follow ups? Thank you. The next question is from the line of Sahil Shik from Anandrati Institutional Equities. Please go ahead. Hello, sir. So, sir, just a follow-up to the previous question where you said our entire order book is based on a nondCR order book. I just had a question that since you are tying up to procure external domestic sales, is that those these are models only servicing to your distribution network?

36:22 The DCSELs will primarily service distribution network, but some of it will also go towards mid market in the months going forward. So currently, Anurag? Let me add that once our cell line is commissioned or is closer to commissioning, we will start building order book for the large accounts. Okay, sir. And, sir, on the distribution side, in terms of realization, those DCR modules will be booked on the spot price. Am I correct in understanding that? Yes. That's right. And sir, what would be the difference in margin between your distribution segment versus your large account or market segment?

37:13 Yes. But price realization is ranges between INR to one point is better over key accounts or large accounts. That's all I can say right now. Okay, sir. Thank you. That was helpful. Thank you. The next question is from the line of Bala Murali Krishna from ONUM Investment Advisors. Please go ahead. Hi. Good afternoon. So from the conversation, the margins are hit this quarter. But from the conversation, I think in the next quarter, in Q2 also, it's unlikely to get the margin back to the 16% range. Is it so? Could it be the...

37:59 I think, is it the way to look at the one? Sorry to interrupt. Mister Balajmurali, could you please come closer to the mic? Or if you're hand... Using a handset, could you please fix it? You're not audible. Yeah. Yeah. Is it okay now? A little louder. Yeah. Yeah. And from margin point of view, from the conversation, I think the... Getting the previous margin, 16% is very unlikely in the q two also. Is it the way to look at this one, or do you have any thoughts on that one? So Balaj, that will not be a direct conclusion. But yes, even Q2, we will have some effect of this impact of the prices not getting absorbed.

38:44 But as Sameer explained that the focus towards the channel market with more of VIKRA coming in will help us garner better margins in Q2. So let's wait for ninety more days and hopefully, we'll be having a healthy discussion on that day. Yes. I understand that the element two extension could have caused some issue to the players who are very much strong in the DCS segment. But as we are not in the DCS segment till now, and we are mostly fully supplying to non retail category. So how this could have impacted us very badly as compared to other players where they have reported only one or 2% drop in margins and our margins are almost hit by 50%.

39:32 Could you please explain a little bit more on that? See the deferment has made the C and I segment active again on non DCR procurements. And that will help us increase the volumes in terms of order book and also get a little better price realization on the non DCR segment. That will be the positive for us. Yes, I understood that. That's what I also thought. So it would be helpful for our organization as well. We don't have self efficiency as of now, including improve the non BCR market. This marketing spend, how it impacted this market badly to us as compared to other peers? That's my question.

40:25 So, Bala, if I've understood you properly, you want us to get compared with the peers on the EBITDA margin front. This is nothing but an outcome of the captive sales coming in. So with more of so our focus presently is towards assisting towards the retail channels, which helps us garner more profits. Anyway, we don't have to sell till the end of this year. The next question is from the line of Vishant Shah from Adani Properties Private Limited.

41:17 Hello. Am I audible? Yes. You're audible. So my question is that when can we expect the normal range of EBITDA margin in the coming quarters? When are we and as compared to the peers, what is our future visibility? See, once our sell line is commissioned, I think the two peer comparison will play out only then. Different players are in different stages of their cell line commissioning, and there are also a lot of current model manufacturers who do not have plans to go into cell line. So any peer comparison at this point of time is very difficult to do. Okay. And what about the EBITDA margin now?

42:08 In our sell line comes up, our EBITDA margins will be determined by the non DCR business. And once the sell line commissions and as we get into the DCR order book, the margins will show expansion because then it will capture the sell margins also. Okay. Thank you. Thank you. The next question is from the line of Karan Gupta from Asset Management. Please go ahead. Hello. Am I audible? Yes. Currently, you're audible. Okay. So my question is on the LLM side. How much is the, you know, eligible book size in the industry, which is allowing NDCR?

43:07 Basically, your CI and rooftop thing. See, if you look at the grandfathered projects, which were allowed for non DCR, the estimate was around 80 gigawatt. But now with the extension of the two, the current C and I requirement will also shift to non VCR. So the eligible volume will get topped up. Okay. Okay. So in overall solar industry projects, what is the percentage of this CNI and your rooftop? So that is something that I want to know.

43:53 The order book, which is coming from the CNI and your rooftop, you know, overall project. So CNI as a whole, and that includes the rooftop as well, rooftop CNI as well, is a gigawatt a year kind of a market, of which roughly six to seven, a comfortable rooftop, and the best is through open access ground mounted food. This compared to your overall country's consumption on an AC level of 45 to 50 kilowatts, that's the proportion of C and I as a factor of the entire consumption in the country. Okay. Okay. So on the cell side, can you work down the numbers that what is the cost of sale production?

44:51 And doing backward integration, it will... You know, ultimately, your margins will move up, and then that will be compare... Comparable with the peers. But looking at the peers, consuming the sales in house, the... Whatever the margins right now they have. Right, and and and then when the production of the cell or the facilities or the capacity is increasing, the margins benefit is not coming into the numbers. So what's your analysis on that? And, also, what is the the sale price that you are importing from China right now after the rebate they've, you know, removed on their products or their export?

45:48 What is the sell price right now, imported sell price, and what is the domestic sell price? Let me answer the first part. See Mhmm. Our sites are one of the most modern lines which have been put up. So our cost of manufacturing of cell will be one of the best in it. So to that extent, we will get the benefit of margins based on that cell cost. The DCR module pricing is very different from non DCR, And their margin comes into play because of the pricing impact as well as sale cost in addition to the sale cost. So that's on the DCR side. And on the Chinese sale, if I correct these numbers today, read 4¢ on the credit prices.

46:37 Sorry? I didn't get that. You mentioned the spot price for the Chinese imported sales is 4¢, and over that, there is, of course, the PCD of 27 and a half percent. So that is the procurement cost as of today. The next question is from the line of from Navajo Capital Advisors. Hello there. So my set of question is regarding the whole old supply scenario that's being, you know, popped out. There's one set of argument that's being said where, you know, the most backward integrated players will be the ones who stand out, and there'll be a supply shortage wherein, you know, the... Only the most backward integrated player right from, you know, the silicon wafer is who... Who's gonna contribute to the, you know, future supply. So I just want some light of, you know, you on the whole industry set... Scenario that's going on, how it's gonna pan out. And second thing, what is your plans on your backward integration? Do you plan to integrate all the way till polysilicon where the industry leaders like VARI and Premier are planning to?

47:51 Just want to get some light on it. It will be really helpful. See, the whole backward integration and making India is driven by policy. As policy progresses, we will keep pace with it. At this point of time, our cell line will get commissioned in Q4, as we have said. We will announce next month groundbreaking for our wafer and input capacity for which Board has already given us approval. This will be nine gigawatts. So nine gigawatts and nine gigawatts wafer and 15.5 gigawatt of module is where we are at this point of time. As the policy evolves, we will keep pace with the policy. And I agree with this with what you said, given the way the policy is taking manufacturing in India, those who are not able to backward integrate that capacity will get consolidated or rationalized.

48:49 And as we move forward, we expect much smaller capacity to serve Indian market. By smaller, I mean, adequate enough to serve Indian but not a very, very significant overcapacity as we are experiencing today. It's a transition which should get settled over next few quarters. Understood. So that's pretty much, and wish you all the best. Thank you. Thank you. Thank you. The next question is from the line of from Prosperity Wealth Management Private Limited. Please go ahead. Thank you for the opportunity. You mentioned about the raw material cost increase in EBITDA margins. So your outlook on margin for the remaining quarters of the year, ROE is 6% margin of 8% approximately during this Q1 to continue for next three quarters of the year till the time as our sale line would only come in Q4?

49:47 And also in line with that, if you could comment on the FY 'twenty seven EBITDA guidance of 1,500 to 1,600, that's what we have given. So with whatever I could gather, you are expecting us to give some clarity on the guidance. So as I mentioned, let us reconnect again in a bit of this year with more clarity on the detail pricing with more of penetration into the distribution market and the policy framework, which now has allowed now this year to get absorbed up to December 31. So that I think will be a better way of consolidating us the whole year FY 'twenty seven. So if I may add, why we are saying that give us time that we have seen a policy getting implemented and then getting deferred because the reality of where our cell manufacturing is as a country was very different from what was the expectation.

50:49 These conversations are still ongoing. There is further discussion going on if any further extension of the ALM-two timelines is required or not. So till those discussions get settled, we do not know how policy will work. And that is the reason we are little waiting and to get clarity on this topic so that we can make better guidance for you. Okay. Understood. But if the current situation continues, so then can we expect a similar sort of margin 8%? Or do you expect the margin to go further down also? This quarter has been impacted, as we said, both by ForEx, by Middle East war, cost escalations, etcetera.

51:35 Some of these factors are continuing, some are moving. So we will have to if there is no change in any of the environment and competitive intensity remains where it is, We expect it to go down, by the way, because of the extension. So margins should broadly trend in this space, but could we get better? Okay. Okay. Okay. Thank you so much. Bye bye. Thank you. The next question is from the line of Mohammed from Tata Capital Management. Please go ahead. Hi. Good afternoon. Thanks for the opportunity. So my very first question goes to in Q1 FY 'twenty seven, the total saleable module stands to around one gigawatt.

52:26 In q four FY twenty six, management has given a guidance for the production of module to reach around seven to eight gigawatt in FY twenty seven. And so do we still follow that guidance only or if management will like to slightly change the guidance as per the current scenarios? So that's the very first question of mine. Yes. See, this... As I... As we have explained, this to policy changes have made our customers little tentative in terms of when they want to procure the modules. As I said, there is a grandfather list of projects, which we will procure non DCR.

53:12 They have two issues. One issue is around this policy changes, make the prices in the market little more volatile. So they wait and watch. Second is they are facing their own challenges around the infrastructure, clarity, land, evacuation, etcetera, which is making the procurement a little slow. They are all working towards making it as fast as it can go. We are also watching to see how that pans out. So combination of these two factors, we are not updating any guidance at this point of time. We are waiting for clarity to emerge. Okay. Got it, sir. The second one from my side is, as part of what sales realization as I see in q one FY twenty seven stands to around, I think, 15 rupee per watt, north to 15 rupee per watt. That's really good when you compare to the whole financial year '26.

54:14 So what's the reason for this good sales realization as well as in FY '27, if you like to give any revenue or sales realization for what electric which kind of stabilized by the end of the cycle this year? So Mr. Sari, with what this is the realization of INR50 per watt peak for the quarter is a blend of DCR and non DCR both, wherein DCR, as you know, has stretched about 21, 22 plus. Going forward, it will all be as to how the penetration into the distribution market will work out to be to see as to what the overall blended ASP for Q2 and the quarters to come would be.

55:00 And I would like to add that we expect our TCR business to grow two to 2.5x every quarter. So that's the frame we have put together. Okay. So that's really good. Sir, the next one is on the EBITDA side. As we see that in Q1 FY 'twenty seven, EBITDA per watt decreased significantly, and you told the reasons for the same, and it's really fine. But if you can give some light onto what EBITDA per watt we can achieve by the end of FY twenty seven before the cell plant comes and accordingly, what the capacities we have as of now? Yes, Anhari.

55:51 As you mentioned, you'll have to bear with us for another ninety days for this. So, let's have a clarity on overall business. Okay. So, for EBITDA per watt by the end of FY 'twenty seven, maybe next quarter we can get a better idea for this one, I hope. Sure. Sir, the very last question from my side is about the cell plant. As you already said that cell plant might be coming by the end of FY twenty seven. So let's say if the cell class gets commissioned on time, so what can be the capacity utilization in f y twenty eight for the cell client if you can give? Yeah. So assuming the six months ramp, which is the standard industry practice for the full year, the entire nine meter was available to us.

56:49 The utilization that we are targeting is about 40 to 50% for the first year, where six months will be spent in ramping up the line. Okay. Great. So 40 to 50%, we can ex... Expect for self pay and annual Right. For the full year, obviously. Ma'am, the very next ten years, let's say we have a DCR order book of around two gigawatt as of now. And for the sale, we have partnered with one of our domestic player to supply, sell to us for to come... For the completion of that order book. So I need to understand that if you can tell me what cost per what or the... At what cost per year we are working Sorry to interrupt. Could you please... Hello. Yes.

57:38 Could you please get in the queue for any follow-up questions? Okay. Sure. Thank you. Sure. Thank you. The next question is from the line of from Kingsman Wealth Fund. Please go ahead. Good afternoon, everybody. My first question was obviously on the margins, which has already been answered by the management. I just want to understand, you know, what distinguishes Vikram Solar from peers that may struggle through this downturn, And why are you confident that the company will emerge in a stronger competitive position? Sure. So as we know that first thing is that the policy framework will guide which companies are successful in terms of which companies are able to adapt to the policy emerging policy framework. But if I have to share what are Vikram Solar's key pillars, which we believe will help us succeed in a competitive environment, I will say there are four.

58:47 One is best in class products. I mean, have been in this business for twenty years. We have always been ahead in technology compared to the industry and we plan to continue that way. Second is the integrated world class manufacturing. We have already shared our integration platform integration plan. The module lines we have recently commissioned are all latest and India's best and most efficient and same will be followed through in sell and wafer and input. Third, will say is cost efficient structure. We are very cost sensitive company and we are making sure that as we expand the cost efficiencies are kept in mind the way we grow.

59:32 Fourth, I will say is diversified customer base. We have spoken about it during this call. We want to work across spectrum of customer base on large accounts, mid market and distribution. And I think that mix will help us both with stable volumes base and better utilization. So a combination of these four will set become solar apart from rest of the players. The next question is from the line of Prashab Modi from Ajai Agarwal Family Office. Please go ahead.

1:00:20 Good afternoon, sir. I have only one question. What was the volume of modules we have produced in Q1 FY seven? Sorry, Abhay, you have to repeat. I'm asking what was the volume of modules that we have produced in Q1 FY seven? Production volume for this quarter also has been around one gigawatt, 1,085 megawatts to be exact. Okay. So, like, we have sold it 100% of it.

1:01:07 Yep. We sold... Oh, yeah. Very close to that. Yeah. Very close. Okay. Okay. Thanks. Thank you. The next question is from the line of from Swan Investments. Please go ahead. Yes. Thank you for the follow-up opportunity. So just wanted to confirm from the ramp up point of view, as you mentioned, our sell line will start from q four onwards. If you can also help us understand, have we started taking the orders for this BCR, or we will take it at a later stage as and as we progress near to the commissioning of the plan? Yeah. So at this point of time, we are not taking orders for the different modules, which has made in our own plants.

1:01:56 That process will start maybe a couple of months from now depending how the progress on the cell line execution is. So closer to once the cell lines are shipped and post that we will start taking orders. Okay. And how does the pricing mechanism work in this DCR market there? The DCR market pricing depending on the customer segment is varying distribution which is the highest margin, highest price and large accounts, which are talking in large volumes, their pricing is different. It's an evolving situation depending on the policy and the sale capacities coming on stream in India.

1:02:42 So we will that's the reason why we are not taking orders at this point of time. It will take few months from now. And from the price escalation, raw material escalation point of view, how does it have closed until you say? Since we are not taking the DCR orders yet, I cannot answer that question. Maybe in the next quarter, will be able to say something on this topic. And finally, if you can also help us understanding overall demand environment across the categories that is utility and then CNS segment as a whole, and then on the retail side on the PM Kusum and PM Surrey across the category for how...

1:03:29 I mean, in the utility, whether the tendering start... Has started picking up or not. What is the kind of annual absorption we are looking it out? You can just give a broad background about each of these categories. That would be really helpful. Sure, Deepak. So all the fresh tendering that has happened after the threshold date of August 25 has been to the tune of 35 to 48. What they are in different stages, some tenders have already been submitted. These are tariff tenders that I'm talking about, which will come up for execution twenty four months hence... Eighteen to twenty four months hence. So the procurement decision for these large tendered quantities will happen in possibly h one and h two of fiscal twenty eight.

1:04:19 So that's the utility. So utility, we are very confident as a mix of the order backlog, the grandfather backlog of non DCR plus the DCR that comes up for execution is a 30 to 35 gigawatt AC kind of a market as of this year. C and I, like I mentioned, would be 15 gigawatt that, you know, crosses across rooftop as well as round mount. PM plus combined would be to the tune of 14 to 15 gig. And, I mean, eventually, from the growth perspective, where do we see this retail segment that is PM, Kusum, and Surya Karushna shaping up over the next two, three year perspective?

1:05:11 So we are still hearing chatter of PM Surya Karushna two point o, PM Kusum two point o. So we will have to see how that plays out. So policy driven installations are directly linked to what the government outlay is going to be. However, on the other side, on the utility side, there are a lot many levers that have panned out. A lot of states have announced data center policies, UP, Gujarat, Rajasthan, and AP to name a few, which is going to lead to setting up of data centers to the tune of 25 to 26 gigawatt in the next five years. And that directly translates... I mean, if you assume 70 to 80% of solarization of the node, That is the time five multiplier of solar demand that is created.

1:06:04 So from the consumption point of view, I don't think we should view Indian market purely basis or the tendering activity that is happening. C and I data center plus green hydrogen combined is going to now anchor Indian demand in the next decade. Okay. Thank you. Thank you for answering the question. Wish you all. Thanks. Thank you. Thank you. The next question is from the line of from Wealth Management. Please go ahead. Yeah. Hi. Thank you for the opportunity. Just figured one small clarity. We have enhanced our referring capacity from six gigawatt to nine gigawatt.

1:06:52 And previously, we were talking about 12 gigawatt of referring capacity. So... And that too. That was in two phases, which is six kilowatt and then I think in the '29, again, a six kilowatt capacity would come up. So right now, we are increasing the six kilowatt capacity to nine. So is it part of the same 12 kilowatt, or are we actually increasing the capacity to, like, nine plus six to 15 gigawatt? So just wanted that. It is part of the same 12. We have just changed the phasing and re re... Resize it for the. Okay. And what will be the total CapEx for the total 12 k or Sorry to interrupt, mister Akshay.

1:07:39 Could you be a little louder? Yeah. So can you just... Can you put us at CapEx? The total CapEx that would be required for 12 gigawatts capacity? No. As Sameer explained, we have trimmed down the plan originally of 12 to nine. We have also kept the cell at nine. So for the nine gigawatt wafer ingot, the project cost will be about INR 5,600 crores. Okay. Okay. Thank you. Thank you. The next question is from the line of Saharshay from Anandrati Institutional Equities. Please go ahead. Yeah. Thank you, sir. So, sir, I just wanted some clarity on our CapEx plan. Earlier, we were going to commission a nine gigawatt cell plan by December and three gigawatts by March 2027.

1:08:35 But now we are commissioning a nine gigawatt cell line in March 2027. And if you can give clarity on when the next phase of the three gigawatt cell plant would be commissioned? So our plan was for the three gigawatt was always in FY 2028, not on '27. So that's the case. So the three gigawatts would be commissioned in FY 2028? Yes. Three gigawatt, I will explain to you. Three gigawatt, we have kept for upgraded technology. Once we have settled down this nine gigawatt, that is the time when we will start to work on the next phase of three gigawatt, which will be at net level of technology and not the same top on.

1:09:25 Okay, sir. And sir, if you can also share how the CapEx phasing would be across for our sales, modules and best combined over FY 'twenty seven, 'twenty eight and flow over to FY 'twenty nine, if any? So as I said, for FY 'twenty seven, we'll be spending about INR 5,000 crores. We'll see similar numbers in FY 'twenty eight as well. And majorly, this will be back with debt coming in, financial close of which is in losses. Okay, sir. And how much level of debt are we expecting to fund this CapEx? So the plans going forward would be at INR 75 crores, 25 But with that asking to be in place, we will end up with a debt equity of 70 crores.

1:10:16 Got it, sir. Yeah. Thank you. Thank you. Thank you. The last question is from the line of Vishant Shah from Adani Properties Private Limited. Please go ahead. Hi. Good results so far. I just wanted to check one thing regarding your... If you can just give us wider margin in terms of the DCR versus non DCR sales in terms of EBITDA margin? So, you see, at the quarter one, are you saw any volumes on the VCF front? It was only 75 megawatt out of one gigawatt.

1:11:02 We'll see more of VCF coming in Q2 and the quarters to come. With more volumes coming in, that will help us understand the clear segregation of margin for both these products separately. So if you can just guide. No. This year, obviously, we'll deliver more than what the non this year module. Okay. Sorry to interrupt, mister Vishant. Could you please adjust your handset or mic? Your voice is coming out with a lot of disturbance. Yeah. Is it audible now?

1:11:48 Yes. Please go ahead. So just if you can just provide a very wide sort of volumes where you feel that the margins can stabilize or move this segment? Can you please repeat the question? At what volume you foresee that this margin the margins can stabilize for these two segments in terms of your expectations? Not about the volumes. It is about once our cell capacity comes in, then only the industry is going from non DCR to DCR over next couple of years. So there is no stable volume of non DCR and DCR we can predict at this point of time.

1:12:37 This is a policy driven matter. Thank you. Thank you. That was the last question for today. I now hand the conference over to the management for closing remarks. Over to you. I would like to thank everyone for joining us for today's call. We look forward to talking to you again next quarter. Thank you. On behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.