Strong order book, weak execution—H2 ramp unproven, costs rising

Q2 gross margin 9.2%, verified; but absolute margins thin at 3.7% EBITDA

H1 revenue -11% YoY; 4 Indian + 4 international projects stalled, not yet started

O&M ₹99 Cr confirmed; portfolio growth real; but still only 6.5% of Q2 revenue

Order book verified; but 40% of April 2026 base still stalled, revenue realization delayed

Prior guidance 10-15% ex-Reliance; now 'up to 10%'—this is a downgrade; H1 delivered -11% YoY

Prior call: 10–15% ex-Reliance. This call: 'up to 10%.' Delivered H1 -11% YoY; 4 projects stalled.

Expected project starts in mid-Q2 per prior outlook; now revealed 4 Indian + 4 international not yet started; LOA/NTP delays cited.

Portfolio grew 18.9 GW, up from 13.5 GW in March; O&M grew 48% in H1 to ₹183 Cr; now 50–50 mix with EPC in order book.

CK Thakur acknowledges margin pressure, ALMM/domestic cell constraints, and expects consolidation; smaller players to exit.

4 projects from Coal India/NTPC not signed yet; 4 international delayed by financing. Egypt Minya project moving, NTP received. Q1 was subdued, Q2 also slowed, but Q3/Q4 heavily loaded. International revenue will keep adding.

Recurring overheads ₹79–84 Cr/quarter, almost flat. As % of revenue looks high now, but when revenue increases, leverage will help. Costs will increase when Reliance orders start, but proportionally not burdening overall cost.

4 projects 40% of April 1 order book will contribute. Q3 & Q4 will not be in same proportion as Q1–Q2; they will be heavily loaded. On track. International projects all signed off now.

Yes. Minimum requirement to maintain right. Execution will scale up in second half.

O&M mix: 50% from own EPC, 50% from third party. GP ~20%, EBIT lower due to labor intensity. Cost ₹100k–150k per MW peak depending on scope. International margins 30–40% higher than domestic. O&M steady recurring income with low overheads.

Our range was 10% to 15%. I still say 10%. It's not 0%, not between 0% and 1%. It will be around 10%.

Consolidation will happen. Financial qualification stringent now. Large-order PSUs coming with module prices low. Small players cannot compete. Expect consolidation in Q3–Q4. Industry not ready yet; many policies to implement. Expect healthy outcome once cell capacity stabilizes.

Currently ~5% of total revenue. May grow to 10%. Gross margin ~20%, EBITDA translates with minimal overhead change. Target Africa, Saudi Arabia, Europe (Spain/Italy). O&M pipeline growth 25% this year to 22–25 GW.

Downgraded from prior 10–15% ex-Reliance. H1 delivered –11% YoY; H2 ramp unproven. 4 projects stalled.

4 Indian + 4 international projects yet to start. Reliance timeline undefined. Egypt execution depends on monsoon completion.

Q2 domestic EPC margin tracking low end; international margins higher (30–40% above domestic). O&M margin 23% this quarter, settling to ~20%.

Q2 EBITDA 3.7%; overheads flat at ₹84 Cr despite lower revenue. Margin improvement dependent on revenue ramp.

Current credit line utilization ~70%. New sanctioned lines from Indian banks + South Africa bank for LC/BGs.

4 Indian projects (Coal India, NTPC) + 4 international awaiting NTP/financing. Each month of delay costs ~₹200 Cr potential revenue (annualized). Analyst Sameer Dalal pressed: 'When will projects start?'

ALMM cell constraint drives domestic modules scarce and costly; developers reworking bids, delaying awards. Entry barriers low; PSU orders coming with lower pricing. CK Thakur: 'competitors have bid below cost' in some cases; developers avoiding low-margin bids.

H1 delivered ₹3,118 Cr (–11% YoY). Guidance requires 10% FY27 growth = ~₹1,700 Cr avg per half; H2 needs substantial ramp. But 4 Indian + 4 intl projects not yet started. Reliance timeline undefined. Egypt project monsoon-dependent.

Recurring overheads flat at ₹84 Cr despite lower revenue (5.5% of sales vs prior 4.5–5%). Interest cost increasing due to LC extension + new credit lines. If revenue ramp fails, cost-to-sales ratio will expand, further compressing EBITDA margin.

Indian mandate for domestic cell use (ALMM-II) raises project costs 15–17%, delaying awards. Rajasthan/Gujarat grid constraints curtailing solar output. BESS orders at risk as batteries cost-prohibitive; consolidation expected. Government policies still rolling out.