Emmvee Photovoltaic Power Limited (EMMVEE) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the MV Photovoltech Power Limited Q1FI 27 conference call hosted by Radhi Kapati. As a reminder, all power spin lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that anything said on this call that reflects the outlook towards the future, which can be constituted as a forward-looking statement, must be reviewed in conjunction with the risks that the company faces. A copy of the disclosure is available on the Investor Relations section on the website as well as on the stock exchanges. Kindly also note that the audio of the earnings call is a corporate material of MB Limited and cannot be copied, rebroadcasted, or attributed in the PR media without specific and written consent of the company. To give you an in-depth understanding of the company and answer all your queries, we have from the management side today, Mr. Manjunatha, D.V., Chairman and Managing Director, Mr. Suhaj Sonti Manjunatha, President and CEO, and Mr. Pawan Kumar Jain, Chief Financial Officer. I now hand the conference over to Mr. Manjunatha, sir. Thank you and over to you, sir.

Thank you. Good evening, ladies and gentlemen. A warm welcome to all our shareholders, investors, analysts, and colleagues joining us today for MVQ1 Financial Air 27 earning call. Thank you for your continued trust and confidence in MV. Financial Air 27 has begun on a strong note for our company. During the quarter, we delivered revenue from operations of 1555 crores, EBITDA of 548 crores, and profit after tax is 380 crores. With a EBITDA margin of 35%, our order group further strengthened to 9.9 GW, supported by fresh order inflows and approximately 1.5 GW. More importantly, these results reflect the strength of our business fundamental. They were driven by improved operational execution, higher manufacturing efficiencies, stronger integration benefits, disciplined cost management, and continued customer confidence. Operationally, this was our best quarter so far. We achieved record production across both solar module and solar cells, with higher cell utilization further strengthening the advantages of our integrated manufacturing platform. This quarter also marked another foundation day for MB. Looking back over more than three decades, we have grown from small solar water heater manufacturing into one of the leading Indian integrated solar manufacturing companies. While our scale has changed significantly, our values remain the same. Quality, innovation, customer trust, integrity, and long-term thinking. I sincerely thank our employees, customers, suppliers, lenders, shareholders, and all our stakeholders for their continued support and confidence in our journey. Looking ahead, we believe India is entering a defining decade for renewable energy. Growing electricity demand, increasing energy security, domestic manufacturing initiative, electric mobility, energy storage, green hydrogen, and data centers are creating a significant long-term opportunity for the Indian solar industry. The implementation of LLM LEAST2 is another important milestone in strengthening Indian domestic manufacturing ecosystem. Can we? Hinted this transition from position of preparedness, our operational top-down cell manufacturing facility and inclusion under LLMGSTU position as well to benefit from the growing demand for domestically manufacturing solar cells. At MB, we firmly believe that long-term leadership will not be determined simply by installing capacity. It will be determined by technology, operational excellence, supply chain resilience. Financial discipline and consistent execution. Our ongoing 6GW integrated top 1 cell and module expansion continue to progress according to plan. Upon completion, our install capacity will increase to approximately 16.3GW of modules and 8.9GW of solar cell significantly strengthen our integrated manufacturing platform. At the same time, we continue to prepare for the next phase of backward integration into ingot and wafer manufacturing. Together with our investment in digital technology, automation, and artificial intelligence, these initiatives will further strengthen our competitiveness and support sustainable long-term growth. As we move through financial year 27, our priority remains clear, execute our expansion and schedule, increase utilization across our existing facility, strengthen technology leadership, maintain financial discipline, uphold the highest standard of governance, and continue creating sustainable long-term value for all our stakeholders. Ladies and gentlemen, this India solar manufacturing industry is on an important inflation point. The companies that will lead this industry will be those that combine technology, integration, operational excellence, customer trust, and disciplined execution. At MB, we remain committed to building exactly the kind of institution. We have started financial year 27 with a strong momentum and we remain confident about the opportunity hired. Thank you once again for your continued trust and support. I will now invite our President and CEO Mr. Swaz Gronki to take you through the operational and financial performance for the quarter in greater detail. Thank you.

Thank you, Mr. Majanata, for your opening remarks, and good afternoon to everyone joining the earnings call for the first quarter of FY2027. We have started the financial year on a strong note, with healthy growth in revenue and profitability, record quarterly production, improving capacity utilization, and continued momentum in our product. Let me begin with the financial performance. Revenue from operations for Q1 FY2027 stood at 1555 crores, registering growth of 51% over Q1 FY26. EBITDA for the quarter stood at 548.1 crores, an increase of 56% year-on-year. EBITDA margin improved to 35% compared to 34% in Q1 FY26 and 33% in Q4 FY26. Despite the sequential decline in revenue, EBITDA was lower by only 4% quarter-on-quarter, reflecting operating leverage, optimizing of expenses, and benefits of increased internal cell consumption. Profit after tax stood at 380.3 crores, registering growth of 103% over Q1 FY26. Fat margin improved to 24% compared to 18% in the corresponding quarter last year and 23% in the previous quarter due to lower finance costs that reduced significantly to 11.1 crores compared to 53.1 crores in Q1 FY26. Moving to our operational performance, both module and cell production reached their highest ever quarterly levels. Solid module production stood at 970 MW compared to 635 MW in Q1 F526 and 952 MW in Q4 F526. This represents year-on-year growth of 53%. Solar cell production increased to 454 MW compared to 360 MW in Q1 F526 and 428 MW in Q4 F526, representing year-on-year growth of 26%. Effective module capacity utilization stood at 45% compared to 44% in both Q1-FI26 and Q4-FI26. Cell capacity utilization improved further to 83% compared to 68% in Q1-FI26 and 79% in Q4-FI26. The continued improvement in cell utilization is an important operational milestone. It increases the proportion of internal manufacture cells used in our modules, strengthens our integrated manufacturing model, and supports better control over product quality, supply availability, and modules. Our current install capacity stands at 10.3 GW of solar modules and 2.94 GW of topcon cells. Our inflow during Q1 FY27 stood at 1484 MW. Consecutively, our order book increased to 9.9 GW of the end of the quarter, compared to 9.4 GW at the end of FY26. The order book provides healthy revenue, visibility, and reflects continued demand across utility scale, commercial, and industrial, and rooftop solar segments. Let me now provide you an update on our ongoing capacity expansion. Work on the 6Gigawatt Integrated TopCon Cell and Manufacturing Facility is progressing in line with our plans. The module line is expected to be commissioned by December 2026, followed by the cell line by March 2027. Commercial sales will commence in line with the respective commissioning schedules, with capacity utilization expected to scale progressively. The total project cost is estimated at approximately 5,500 crores, including hard costs of around 4,600 crores. Debt funding of approximately 3,300 pros has been tied up at the cost of less than 8%. All major equipment has been ordered. Orders representing approximately 60% of the total hard costs have been already in place. Following the completion of this expansion, our total manufacturing capacity is expected to increase to approximately 16.3 gigawatt of modules and 8.9 gigawatt of cells by end of FY27. The implementation of ALMM List 2 from June 2026 is another important development for the domestic industry. The requirement for the use of domestically manufactured cells in covered projects is expected to expand the addressable DCR market beyond the government schemes. We expect DCR demand to strengthen progressively during FI27 as grandfathered non-DCR projects are completed and procurement aligned with the ALMM requirements becomes more broad-based. Domestic supply of high-efficiency top-concells continues to remain relatively tight, which should support the operating environment for established and compliant cell manufacturers. Our existing cell manufacturing capacity, improving cell utilization, plant integration, integrated expansion position as well to participate in this opportunity. We have also outlined our medium term plan to further backward integrate into ingot and wafer manufacturing. The proposed facility will have a total of 9 gigawatt and is planned in two phases, with 5 gigawatt targeted in FI29 and the remaining 4 gigawatt in FI2013. The timings of this investment will remain subject to the final clarity on ALMM List 3 and prevailing market conditions. The capital expenditure for the same is expected to be funded largely through internal accruals. This backward integration is intended primarily to protect margins, reduce exposure to upstream supply chain, volatility and certainly the economics of our domestic selves, and module manufacturing operations. To conclude, Q1 FI27 represents a healthy start to the year. We delivered strong year-on-year financial growth, expanded margins, We have achieved record module and cell production, improved cell utilization, and strong additions to our order book. Our priorities remain focused on increasing utilization of existing capacity, executing the order book efficiently, commissioning the 6 gigawatt integrated facility according to schedule, and maintaining financial discipline as we progress through the next phase of growth. I would like to thank our employees, customers, suppliers, lenders, shareholders, and other stakeholders. For the continuous support. With that, we can open.

Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and 1 on their touchstone phone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking our questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

You may please press star and 1 to ask questions.

The first question is from the line of Rohit from Access Max Live. Please go ahead.

Thank you for this opportunity. First of all, congratulations on a very strong set of results. My question is more to do with the EBITDA per watt in DCR and non-DCR modules that you do right now. How has it fared in this particular quarter? What is the trend like? And what is the outlook over there?

Yeah, I think, thank you for the question. I think EBITDA, both non-DCR and DCR have been in line with what we experienced in the previous quarter, which is also reflecting from EBITDA margin as well. And so far, going forward, also like what we are expecting is a stable kind of scenario. And that is what is reflected as of now.

My second question is more to do with the capacity expansion plans, like 6 gigawatt integrated cell plus module, where you have stated that the module plant will be operational by Q3, and you want to expedite even the cell plant before the beginning of 528. So, when will the order booking start, and what should be the quantum jump in order backlog or order inflow one should look at? Will that be a right indicator to say that things are getting commissioned on track?

See, auto backlog is something that we've already started seeing expansion of, and that is in tandem to our increasing growth as well. Today, we have an order in flow of close to 1500 megawatt, and an order book of close to 10 gigawatt. So, with that, we are looking at almost... That is quite in line with our expansion plans as well. So, yeah, I think we have already started to see that.

Okay. And my final question is more to do with the wafer ingot backward integration. This you have stated that the roll-off will be in two phases. Is the board approval done, and will we hit the ground immediately, or are we waiting for some sort of procedural steps ahead?

There's no procedural steps. The timing that we have planned the commissioning is by mid of calendar year 28. So, you know, that does not require such early actions to our understanding. So, that is something that in line we are planning, because it's quite clear that our priority right now is expanding the cell and module, and ingot and paper is something that we are... Thank you.

I will get back in a minute. Thank you.

The next question is from the line of Subramanyam Yadav from SBI Life. Please go ahead.

Thank you, sir, for the opportunity. Sir, if you can give us a trend or the number in terms of gross margin spread, because we have the production number, and if you can give us gross margin spread on the sales number, that would be helpful.

Thank you for your question. So I think all like we've been guiding more or less on the EBITDA spread rather than the gross margin spread. So probably for the sake of clarity and understanding that we stick to the EBITDA per watt. And EBITDA per watt, what we had guided is around two and a half rupees per watt for This module, and for the cell part of it, of 6.5 rupees per watt. So I think that is something that's in line to the current trends also.

Big move. From Q4 to Q1.

Not much. I mean, it's in the similar stage. It's in similar state. If you see that similar system.

Okay.

Okay.

And also, sir, on the overall mix of DCR and non-DCR, how was it in terms of sales?

This time, the DCR and non-DCR mix have been healthier on the DCR side, which is the output of our increased margin percentage as well. So, we have done, I think, over 50% DCR. Okay.

And sir, how is it likely to be ahead in the next couple of quarters?

So, looking at our module to cell capacity, you know, difference, And the market scenarios, there will be more non-DCR than DCR, but it's not going to be as dramatic as the capacity will look like, because we have some comfortable DCR inventories that we intend to use.

Okay. Okay. Thank you, sir.

Thank you. We'll take the next question from the line of Prakhar Podwal from Ambit Capital. Please go ahead.

Thank you for the opportunity. Also, just one question. After 1st June, how has been the C&I demand in terms of ordering, order inflows? And also, Amy, I understand you have mentioned that from Q4 to Q1, the margins. Have been stable, but in terms of new orders, which maybe will execute the next six months or 12 months, are you seeing margins increasing again because of some tightness from the solar cell side currently? That is the question.

So, thank you, Prakash, for your questions. On the C&I demand order inflows, that's, you know, that's something that we've already started seeing. But, you know, the supply of it is something that you should expect towards later of this financial year and not immediately. But, you know, this is the moment that we have already started seeing in our order inflows. And when it comes to the margins, That is... We've been in a similar state of margin per watt peak, like I said. Both in DCR as well as non-DCR cells in the Q1. And what we are seeing also is like, yes, there could be a slight better, there could be some slight improvements in the DCR side. But I think it's not something to consider. Rather, just assuming the stable levels of margin more confidently is something that you should take back from this.

Sure. I'll just follow up on that because I was hearing some news about same layer specifically in Karnataka requesting the state to push back the deadlines given current unavailability of BCR modules. So anything given your days in Karnataka, anything on that also? Or is the availability in terms of BCR modules totally there and those are the students? Anything on that?

Yeah, I mean, it's important to recognize that the ALMM implementation in reality is coming in a phased manner. And I think companies like Envy are equipping ourselves in that kind of phased manner to be there at the forefront of the industry with the expertise that we have for the last two years of top-con cell manufacturing capability to, you know, deliver the requirements for the thing. For the, you know, for the requirements, for the demand. And I think the... Government is very clear. In fact, their intentions and discussions have now started. Now, we are all looking at the ALMM 3 rather than looking at ALMM 2 anymore. So, I think this is something that's already happened. And now, we need to focus on how do we bring in the ingot and wafer and ensure that that is going to be done.

Sure. And on the current capacity of 2.9 gigawatts, can you expect more run rate increase going forward? So let's say 450 going to 500, 550 that kind of number? Because I understand the capacity is at 11 watt peak, 710 watt peak modules. So just that before the new capacity comes in, can we see more increase in the run rate production?

Yeah, yeah, absolutely. That is something that you should expect to see in this coming quarters.

Okay, sure. Thank you.

Thank you. We'll take the next question from the line of Apoorva Bahadur from IIFL Capital. Please go ahead.

Thank you. Thank you, Tuhasi. And congratulations on another strong quarter. I just wanted to check in our sales mix, have we also sold sales or have we restricted ourselves to selling DCR and non-DCR modules?

Yeah, thank you, Apurvaji. Yeah, our sales mix also includes merchants and sales.

Okay, and is that a meaningful number or is it very small?

It is an increased number quarter on quarter, or probably the highest we have also done in the history of country also. So, I wouldn't say that it's a dominant number, but it's a meaningful number.

Okay, okay, understood. Secondly, when I see the financials, I see a sharp quarter and quarter drop in the cost of raw materials consumed, about 18-19% Q on Q, while the production has increased slightly. What is leading to this sharp decline in cost of raw materials?

Yeah, so see, there are a couple of things. I think maybe I'll let Tawanji add in. But here are the couple of things are that the mix of DCR and non-DCR, when it becomes healthy on the DCR side, you will see the COGS being much more better. And two, like I said, there is also cell sales that is involved in this quarter. So that is also a reason why you...

Okay, so is this trend sort of expected to continue in future quarters as DCR sales pick up even further, or do you expect to be sort of a one-off thing?

No, this purely depends on the mix of the DCR, not DCR, and also the sales. So I think accordingly it will change, so that should not be any guidance that should be taken out of that.

Okay.

But the understanding is that if the mix were to be the same, then yes, it will be similar. I don't see a change.

Okay. Okay. And in last quarter, I recollect where we had a discussion about the inventory position. And so how is it at the end of this quarter? Are we seeing a wind down of inventory or it's still at similar levels?

Yeah, yeah, so inventory, you know, if you see in the PN, there's some interchange in inventory, which is mostly finished good because the production is high. So some inventory has been added to the, some production has been added to inventory. But otherwise, bearing this 74.25 crore of the addition to inventory, otherwise it is in line with our previous quarter's inventory levels.

Okay, and are you expecting, sir, this inventory to wind down and... Next quarter, next one or two quarters, or do we expect to carry this type of finished goods inventory into FY27?

With the order book, you know, heavy order book, and we added another 4.5, 1.48 gigawatt order book, so this will help us to, you know, liquid the inventory also, both in terms of finished goods and raw material also inventory will be used to have an improved production to make the target order.

And added to that, this quarter we have strategically kept little more raw material and the materials reason is of the geopolitical issues what is taking place.

Okay, okay. I understood, sir. And, sir, lastly, I think on the availability of silver, I think government had imposed some sort of restriction on import of silver. Are we facing any challenges because of that, either in terms of securing the raw materials or in terms of the pricing in India?

This is a good question. So we are not facing any difficulties. It is only procedural has been introduced. So what we have to do is now we have to apply well in advance to the DGS&D for what is the import quantity we want to bring it. Then accordingly they are giving approval to the import. So, what MV is following up is we are following up three months inventory what we required. We are applying in one time and we are getting into the approvals in time. And last, by the time of introduction to till date, we have not faced any difficulties. As soon as we are applying, within three to four days, we are getting the approvals.

Okay, and sir, is the pricing in line with the global price, or is there a premium in India in the retail or the spot market?

No, we still, it is in imported only, so it is in line with the earlier prices. There is no changes, because the seller price still, we have largely depend upon imported.

I understand, sir. Thank you so much. I'll get back in the queue.

Thank you. The next question is from the line of Sahil Jinesh Seth from Anandrati Institutional Equities. Please go ahead.

Hi, sir. Thank you for the opportunity. So, sir, just following on a previous question, you said the finished goods inventory was increased in this quarter. But if I were to look at the DCR number from the DCR portal, the model manufacturing and sales data arc is quite in line. So, would it be fair to assume that the slower off-take is only in the non-DCR segment and not as much as in the DCR model segment?

No, this is not the uptake. This is the adder. The non-DCR normally we produce based on the uptake it is only. It is all done. The pickup of this particular quarter is not been done in the last month because of LC establishment and other things, which is the moment is going happening in this month.

This is as per the normal cascading that would be expected.

Because sometimes in those areas, they are not able to pick up the materials.

Okay, sir.

My second question would be, when you previously mentioned that the 50% mix was DCR, does that only includes DCR modules or it also includes your DCR cells in that mix? Both included. That was helpful. Thank you, sir.

Thank you. The next question is from the line of Karan from Neveshai. Please go ahead.

Thank you for the opportunity.

So, I wanted to understand, like, we have a 50% mission revenue for DCR. So, is it similar in our order book as well?

Order book is increased. There has been more and more increasing DCR in the mix of order book. But, yeah, I mean, like, but there is still a good non-DCR portion as well that is there. But, yeah, it will be around similar. Peace.

Understood. And what was your branded realisation for modules currently?

Realisation for module in the last quarter was I think around 15, 16 cents in the module this year.

Does it increase for us because we sold more DCR modules this quarter?

Sir, there is a small increase about, on a blended one, it is going to be about one rupee increases there.

Understood. And one last question, like, what would be our peak utilization that we can achieve in modules and cells, and whether are we expected to achieve for the current facility?

So, peak utilization for cell is around 85 to 90 percent, which we are already close to that. And with respect to modules, it is about, it will be about 65 percent. But with cell, you know, as we are transitioning to G12R, the overall effective capacity is also going to increase. So, you will see a higher production volume, even though the percentage could remain similar.

So, our transition has been completed or is it in process?

Already. We have started this thing, we have already, I mean, so, we have partially completed the conversion, but then the remaining is, you know, we will convert it like sequential.

Understood. Great. Thank you so much and all the very best.

Thank you.

Thank you. The next question is from the line of Meghna from Old Bridge Capital. Please go ahead.

Just to follow up to the original question, in the coming quarters, what is the marginalization that we expect?

I think you can take it on a base case at similar levels. I think that will be a fair assumption to take it.

Got you. And any color on when do we expect to achieve the 65% level?

I mean, we will, like, you know, we expect that, you know, we will increase, we will keep increasing the production volumes. Rather, like, instead of guiding on that, like, what we have stuck to guiding is strictly on the EBITDA, overall EBITDA, you know, absolute EBITDA perspective. And, you know, we're looking at around 2,400 crores of EBITDA, like, you know, closing this up by 27. So, we should be reaching increasing levels of utilization on modules and cells as well.

Thank you. Thank you. The next question is from the line of Karan Gupta from Asit C. Nehta Investments. Please go ahead.

Yeah, hi. So, my question is on the capacity utilization of cell. As you look at the previous quarter's numbers, a couple of quarters the cell capacity utilization We are not getting the backward integration benefit plus the utilization benefit in our EBITDA per watt numbers.

No, you are getting it. One per watt number you will not get because it's again, if your utilization is going up per watt, like your production is going up, but mainly like, you know, it's the ramp up of efficiency and the raw material that's happened. But also absolutely like, you know, you can see that our module production has also gone up. So on a blended basis, it will be difficult to, you know, measure.

If you calculate cell to module ratio, which is, if I assume, let's say, your cells, 100% cells are going into your modules, right? Whatever the cell number you have produced, 100% is going to the module side. So, which is in line, I mean, 45 to 46% historically in a couple of quarters. So, this is the number same, but As the capacity utilization is increasing, so the benefit of backward integration, plus the benefit of your capacity utilization, which is operating leverage, should come into the EBITDA per watt numbers. What's your view on that?

You can see the other operational FCA improvements on these clients.

One more thing, if you see the previous quarter, if 2 for the EBITDA margin is around 32.84 and this quarter is 35.2, so this is also because of the mix and we are getting benefit of a domestic scale produced, so that is also getting reflected in the EBITDA margin.

Okay. What's the number of sell you are, you know, selling to outside or to the merchant? And what is the in-house?

We're not disclosing the sales mix of our sales modules and DCR and non-BCR. Rather, like, there has been a significant increase in sales sales this quarter. So, the understanding that all the sales that we make are going into our modules is not correct. Rather, there is a big mix of both. We are selling separately as well as we are using in our own modules. So, that is why it will be difficult for you to look at it on a bit of a word pick on a blended basis, rather like it is something that you should, like, you know. You know, it is something that there has been that.

Okay, so in cell capacity, we are seeing the operating leverage part when we are selling outside EBITDA per Watt stand alone basis for the cell capacity. So we are seeing the operating leverage part playing out in the cell part.

What was the question?

So for the standalone cell capacity utilization is increasing. So for EBITDA per watt, if you just calculate for the cell portion, the operating leverage playing out when you are selling into the outside market and consuming inside.

No, see, it's not that distinct. We have to also be significantly, like, you know, aware that the changes in the raw material prices, either the silver or with respect to, you know, the other kind of increase in raw materials are not reflected where the EBITDA per word pick is going down. And this is happening only because increased operating leverage. Because our consumptions have been more streamlined, our operating efficiencies have become better, efficiency of the cell has become better, and the consumption has become better. So that is why you are able to see this, you know, stable EBITDA per watt irrespective of the increase in other headwinds that we are seeing. Okay, okay.

So for sell, we are getting better realization in the outside market.

No, realization for cells has been quite stable. So has been modules, so has been DCR and otherwise. So, realizations have been quite stable. It's in line with the movements in your commodities.

Mr. Gupta, I'm sorry to interrupt you. Sir, I would request you to kindly rejoin the queue for follow-ups. We have a queue here, sir. There are those who are waiting for their turn. Thank you so much, sir. We'll take the next question from the line of Dhrov Murchal from HDFC AMC. Please go ahead.

Yes, sir. Thank you so much. So, firstly, on the non-DCR modules now, I mean, non-DCR cell-based modules now, at least the news flows are suggesting that the market has become more limited now because the CNA market has shifted to the DCR cells now and also rooftop anyways was. And probably there could be some margin compression in the pure module business. But based on your guidance, it seems that's not the case. So just trying to understand the guidance that you're giving, 2.5 rupees on modules, is that the blend of DCR modules plus non-DCR modules or just the non-DCR modules?

There has been, sir, like, just for clarity, I think that there are markets operating at different places, but it's important to recognize that there is only limited supply that has been always available for with players who have the bankability and credibility of supplying to the. You know, the IPPs of both C&R and developers. And today, whoever has the grant for the projects are the very, you know, very serious IPP players. So, there what happens is the operating leverage of these, you know, here what happens is that the selectiveness of quality, stability, and bankability becomes extremely crucial. So at that point, you know, players like MV are at the forefront of that, where there is no pressure to operate at every levels. So for us, it's very clear that operate, choosing our markets, choosing our customers in terms of without. You know, making that reasonable return, even with lower utilization, is rather better than making a higher utilization and lower margin. So that's the philosophy we've been following.

Got it. So, but purely on modules, based on your level of volume that you expect, basically, I don't know, I think 50 or 60% utilization on the capacity of module, you believe, despite the change in the market structure, but because of your positioning, you will be able to get to that 2, 2.5 rupee bidda.

Yeah, yeah, in that range, yes, absolutely.

Sure. And so, secondly, just to reconfirm, the sell pricing, for example, the sales that you sell, they are based on dollar pricing. They are not based on INR pricing, right?

Yeah, correct.

For example, whatever you sell to the rooftop market or the Kusum market, whatever, or C&I market, that all happens in the dollar pricing based. So, any, you know, the dollar change, which probably has some implication on your input pricing, but to a large degree, it gets offset because the selling price is also in dollars.

Yeah, yeah, that's correct.

Sure. Sure. Okay, sir. Great. Thank you so much. Thank you.

Thank you. The next question will be the last question for today from the line of Dhaval Popaj from Toys International Limited. Please go ahead.

Thank you so much for your opportunity. My question is, this is regarding particularly passing of the raw material costs. You did say that it moves in line with the commodity. So, is it fair to understand that you are still able to pass on the raw material or at least certain part of the raw material costs to the customers? Like, for example, as silver fluctuated so much, were you able to pass on these costs or how should we read this? If we can show some light on this, if possible.

Yeah, yeah. This we have answered even in the last time also. See, we do two types of, the pass-through will be done in two ways. One is we will do value engineering in the production. If that is there, we will not pass through to the vendor if we can able to make it within in line with our margins. If not, yes. That's why if you see the change in the prices will be there. That's why we always say absolute number of EBITDA will always be considered not on the percentage. Percentage may vary because if my price is high, the percentage will come down. If the price is low, my percentage is low. But my absolute number will remain same.

Okay, that is helpful. And I am sorry if I missed this, but there was should we expect that given prices decline, could we expect recurring inventory losses or that would not be the case or how do you plan to protect inventory losses particularly?

There is no decline in the prices that what we said is non-DCR we normally produce based on the address inflows only, and which is already covered by the advances and the LCs, so which doesn't have any effect. And DCR markets, we know that there is not going to be any change as of today. So as of now, we have not impacted anything on the price variations, because we are strategically, even if you see in the earlier three-quarter calls, also we made very clear. We normally inventory and the dollar as well as the procurement of material based on our inflows of orders.

Yeah, okay. Thank you so much. I hope we can connect offline as well. Thanks for the opportunity. Thank you.

Ladies and gentlemen, we'll be taking one more question for today from Gaurav Birmiwal from Access Mutual Funds. Please go ahead.

Thank you, sir, for the opportunity. I just had one question. So you did elaborate on how the margins are split. But just for my understanding, let's say if you produce and sell itself separately, how much margins will you make there? Let's say a second case, which is you produce the cell, you convert it to modules as well. How much are the margins there? And third is, of course, the non-DCR, wherein you buy cells from, let's say, China, and then you convert it to modules and sell it. So what will be the margins in each of these three cases?

Yeah, thank you, sir, for the question. So, like we said, non-DCR module is about 2 to 1.5 rupees per watt, and then the cell is about 6.5 rupees per watt. So, DCR module is usually like, you know, 8.5 to 9 rupees per watt. So, that's pretty much like, you know, you either sell separately or you sell together, it's pretty much similar kind of margins.

Understood, sir. Very clear. Thank you.

Thank you. That was the last question for today. Thank you, members of the management. Thank you once again for your time and participation. On behalf of MBE Photovoltaic Power Limited, this concludes today's conference. For any questions, please feel free to write on the email IDs mentioned on the invite. We appreciate your engagement. You may disconnect your lines now. Thank you so much.