Hello,

(Numbers in Lakhs)

• Company reported almost 8x increase in other income in standalone P&L i.e 120 (2023) to 1100 (2024) (in Lakhs)
  as dividend income

  

• Export incentive benefit of 3200

• Company added vehicles worth 200 Lakhs
  396 to 585 (in Lakhs)

• Recently added R&D products under intangible assets worth 1800 Lakhs

• Almost 10000 in CWIP

• Interesting holding by the company – (Dilesh Roadlines Private Limited 464,550 1,239.40)

• Company is stocking raw materials, 1128 (2024) from 132 (2023)

• Anushakti Enterprise Private Limited holds 3.28% of the company, (Could not get any info on this)

• 25% increase in director renumerations, fairly higher than PAT growth

• Xanthine capacity increase proposed from 5,000 to 9,000 MTPA through brownfield expansion and debottlenecking projects.

Disclosure: Not a buy/sell recommendation

Company profile: The company provides EPC and O&M services under turnkey EPC and BoS solutions for utility-scale, rooftop, and floating solar power projects. It also offers solar plus storage solutions. It boasts an EPC portfolio of 19.4 GWp and an O&M portfolio of 8.2 GWp. It has a presence across 28 countries.

a) Q1 FY25 results: The company’s Q1 FY25 revenues stood at Rs 915 crores, up 78% YoY, whereas gross margins stood at 11.1% versus 11.3% YoY. EBITDA stood at Rs 37 crore versus a loss of Rs 34 crore YoY. PAT stood at Rs 5 crore versus a loss of Rs 95 crore YoY. This was the second consecutive quarter where the company posted a positive EBITDA, PBT, and PAT on a consolidated basis. On a QoQ basis, revenue declined 22% due to tighter liquidity conditions and the fact that Q4 is the strongest quarter of the year.

B) Orderbook and order inflows: The company’s order inflows for Q1 FY25 stood at Rs 2,170 crore versus Rs 488 crore in Q4 FY24. The company’s unexecuted order book as of Q1 FY25 stood at Rs 9,396 crore (70% is domestic and 30% is exports) versus Rs 8,084 crore as of Q4 FY24. The company has also commenced a pilot project for solar plus BESS for Reliance Industries at Jamnagar, Gujarat.

C) Debt Status: The company’s net borrowings have declined by Rs 19 crore and the total net debt as of Q1 FY25 stood at Rs 97 crore. Net working capital continues to be negative at Rs 732 crore as of Q1 FY25. Also, the company has no scheduled debt repayments till Q3 FY25. Also, on a net basis, the company will receive about Rs 85-90 crore in indemnity claims from the promoters which will largely take care of the debt repayments in FY25. The balance debt of Rs 328 crore post November 2024 will be paid in installments commencing from December 2024 to October 2026.

D) Outlook for FY25: The following is the outlook provided by the management for FY25:

1. The management has provided a revenue guidance for FY25 at Rs 8,000 crores. It has been reiterated that revenues will start inching up from Q2 onwards with the majority of it being earned in H2 FY25. For context, FY24 revenues were Rs 3,035 crore.

2. It has also provided an order inflow guidance of Rs 8,000 crore (excluding the Nigeria & RIL orders) for FY25. Domestic ordering activity is expected to pick up from Q2 FY25 onwards as Q1 was muted. In terms of bid pipeline, the company is actively pursuing projects worth 23 GW in India and 5 GW in other geographies.

3. Also, low module prices globally make the time ripe for more projects to come onstream.

4. Margin profile for both domestic and international projects largely remain in the range of 10-11% as major international legacy projects are now behind. EBITDA margins are also expected to recover to 4-5% in the medium term due to better absorption of fixed costs with the increase in scale of operations.

5. With respect to the Nigeria MoU (961 MWp along with BESS capacity of 455 MWh, approx. value Rs 12,483 crore), the company expects it to get finalized very soon as the final terms have been negotiated and procedural steps are in progress. Also, there is no risk from regime change in the US as the project is already an approved one in their list.

6. The Reliance pilot project will be completed in FY25 itself. Many new technologies are being tested which would set the base for larger projects with RIL. Also, with respect to the land allocated to RIL at Khavda, Gujarat, the company expects to receive orders soon.

7. Also, the company is making efforts for a credit rating upgrade which will ease the liquidity for the company and increase the fund-based and non-fund-based limits.

8. The company is taking orders on a BoS basis along with the modules. However, it is extremely cautious with respect to the module price risk. It has onboarded multiple vendors for supply of modules.

E) Some key risks: Here are some key risks found in the company:

1. The management has repeatedly emphasized that order inflows could remain lumpy.

2. During the quarter, promoters sold stake in minimal quantities. Also, 37.2% of the promoter holding remains pledged.

3. Arbitrations are going on for certain projects in the US, on which the company will inform stakeholders on any material developments. This is with respect to invocation of bank guarantees worth Rs 400 crores.

4. Nigeria order was to be finalized in Q1 FY25 but has witnessed a delay. This remains a key monitorable.strong text

I am in a similar boat. The average price is 5% higher than the current market price. The current valuation looks really attractive, I am waiting for the budget tomorrow and next quarter’s results.

Its transition to AMC will bring stability, they have also started giving loans and planning to add more financial products in their suite. It looks like a very attractive company for long run with a business model that is here to stay.

Disclosure: Biased and invested

Anyone still tracking this? Since textile sector is gaining momentum, this looks interesting. Business has bottomed out in FY24 and it has capacity utilisation to do around Rs 2000 crs in revenue.

Interesting. Where did you find the Auditors fees mentioned?

Planning on writing a mail to them in case this arises as a concern.
Also, I might visit to their office in case they allow. Would love to see their set up and meet the team which has produced some genuinely high quality work.