Solarworld Energy Solutions Limited Q3 FY26 Earnings Call Summary

Summary

Solarworld Energy Solutions Limited - Q3 FY 2026 Earnings Call Summary Wednesday, January 28, 2026, 4:00 PM IST

Event Participants

Executives 4 Kartik Teltia (Managing Director), Mukut Goyal (Chief Financial Officer), Rishabh Jain (Whole-time Director), Varsha Bharti (Company Secretary)

Analysts 8 Deepak Patil, Dhruv Mishra, Heer Haria, Homeyar Irani, Lokesh Patil, Ravindra Singh, Ravindranath Naik, Sarang Joglekar, Shivaay Narayan, Udit Sehgal

Financials & KPIs

Geographic & Segment Commentary

• Solar EPC: Strong execution on a 376 MW NTPC project and 272 MW NHPC project in Khavda, both targeted for completion by May 2026. Management guides for long-term EPC margins of 9%-11%, noting that previous higher margins were outlier results from difficult terrain projects.
• Battery Energy Storage Systems (BESS): Formally entered the segment with an ₹800 crore BESPA for a 200MW/400MWh project. The company has secured nearly 1 GWh of orders and is targeting both the utility-scale and Northern India C&I market for diesel generator replacement.
• Manufacturing (Roorkee): Commenced solar module operations with 1.552 GW ALMM approval. The facility is ramping up from 50 MW/month in January to a target of 80-90 MW/month by March 2026, focused on high-efficiency G12R modules.

Company-Specific & Strategic Commentary

• Backward Integration: Construction of a 1.2 GW solar cell facility is underway with commercial operations targeted for June 2027 to capture ₹7-8/watt manufacturing margins vs. ₹14-15/watt market costs. A junction box manufacturing line is also expected to be operational by March 2026 to improve cost efficiencies.
• BESS Strategy: Solarworld is utilizing a “cell-to-battery-pack” approach, importing cells at 5-6% duty compared to 22% for full containers. This enables the company to offer integrated EPC plus storage solutions with domestic after-sales support.
• Structural Shift: Management is pivoting toward “Firm and Dispatchable Renewable Energy” (FDRE) and Round-the-Clock (RTC) tenders, as DISCOMs move away from pure solar due to grid stability requirements.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

BESS Profitability and Pricing

• Question: How do current BESS bidding rates and margins look? (Udit Sehgal)
• Answer: Market prices dropped from ₹2.21 lakh/MW/month to ₹1.77 lakh recently, but have since corrected upward as reality on cell costs ($60-65/kWh vs expected $40) set in. Solarworld’s margins remain strong and better than EPC levels (Kartik Teltia).

SJVN Arbitration Status

• Question: What is the financial impact of the legal issues with SJVN? (Heer Haria)
• Answer: There is no negative financial implication expected. The company is seeking arbitration to recover retention money and maintenance expenses for the material already supplied but stalled by SJVN’s 24-month land delay (Kartik Teltia).

DCR and Manufacturing Strategy

• Question: How will the Domestic Content Requirement (DCR) affect margins? (Suyash K)
• Answer: DCR is mandated from June 2026. While purchasing DCR cells from the market currently costs ₹14-15/watt, our own cell line (operational June 2027) will manufacture at ₹7-8/watt, significantly boosting future margins (Kartik Teltia).

EPC Margin Sustainability

• Question: Why have EBITDA margins dropped from 20%+ in FY25 to ~13%? (Homeyar Irani)
• Answer: FY25 was an outlier due to a high-contingency project in the Northeast. Sustainable EPC margins are guided at 9%-11%, which is considered “good” for the segment (Kartik Teltia).

Key Takeaway

Solarworld Energy Solutions delivered a robust Q3 FY26, with revenue surging 184% YoY to ₹578.23 crores, supported by aggressive utility-scale EPC execution. The company is successfully transitioning into a vertically integrated player, having operationalized its module line and secured ALMM approval for 1.552 GW. Strategically, the firm is pivoting toward the Battery Energy Storage System (BESS) market, securing nearly 1 GWh of orders to hedge against a cooling pure-solar market plagued by grid connectivity issues. While rising silver prices and a ₹11 crore initial loss on the manufacturing line pressured PAT margins this quarter (8.4%), management remains confident in exceeding the ₹1,500 crore annual revenue target. The focus now shifts to commissioning the 3.4 GW BESS assembly line by March 2026 and completing the cell facility by mid-2027 to capture the full value chain. Solarworld appears well-positioned to benefit from the national shift toward firm, dispatchable renewable energy (FDRE) tenders.