Waaree Energies Limited (WAAREEENER) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Wari Energies Ltd. conference call hosted by MUFG InTime India Private Ltd. 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 continues. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Nikunj Jain from MUFG Inter-India Private Limited. Thank you and over to you, Mr. Jain.

Thank you, Michelle. Good afternoon, ladies and gentlemen. I welcome you to the Q4 and F26 earnings conference call of Wari Energies Limited. To discuss this quarter and full year's performance, we have from the management, Mr. Jignesh Rathor, Whole-Time Director and CEO, Mr. Abhishek Padek, Chief Financial Officer, Mr. Varun Goenka, President, Growth and Strategy, and Mr. Neeraj Vinayal, Vice President, Investor Relations. Before we proceed with the call, I would like to mention that some of the statements made in today's call may be forward-looking in nature and may involve risk and uncertainty. For more retail disclaimers, kindly refer to the investor presentation and other findings that can be found on companies' websites and stock exchanges. Without further ado, I would like to hand over the call to the management for their opening remarks, and then we will open the floor for Q&A. Thank you, and over to you.

Thank you, Nikush. Good afternoon, ladies and gentlemen. This is Jignesh. Thank you for joining us for the Q4 and full year financial year 26 earnings call of VARI Energes Limited. I shall be referring to the investor's presentation that has been uploaded yesterday on Stock Exchange. If you have the presentation handy, it will be great to follow the conversation. Let's start with the slide number 3. I am delighted to share that Wari Energies Ltd. has delivered yet another year of record-breaking performance, this time across the full fiscal year. Our revenue from operations in this year has recorded a growth of approximately 84% year-on-year. Reaching 26,537 crores. Operating EBITDA grew 117% to 5909 crores with an operating EBITDA margin of 22.27%. And our Fed for the year doubled, growing over 101% to 3,884 crores. I want to highlight that our reported total EBITDA of 667 crores, 17 crores. It has surpassed our guidance range, which has given earlier 5,500 to 6,000 crores worth of financial aid 26, which reflects the strength and consistency of our execution. Moving to slide number 4, which highlights our capacity leadership and the scale we have achieved. Our total module manufacturing capacity now stands at approximately 26 gigawatt, making Wari the largest non-Chinese module manufacturer in the world. Our cell manufacturing capacity continues to be fully operational at 5.4 Gigao, the largest cell manufacturing facility in India. Our order book continues to remain robust to approximately 53,000 crores. We have planned a capex of approximately 30,000 crores across verticals to fuel the next phase of our growth. And I am pleased to share that we continue to maintain a very healthy ROC and ROE for 32.4% and 29% respectively. On slide number 5, we show the strong production ramp-up that has powered our results. For module manufacturing for the year, full year has reached to record 12.6 gigawatt. It's approximately 2 crores module, that is 56,000 modules every single day we have produced. This is the growth of 77% over the financial year 25. We sold approximately 12 gigahertz of modules during the year. Our revenue mix remains healthy and well-diversified. Utility, IPP, C&I contributed at 34.7%, overseas at 33%, retail at 20.8%, and EPC at 11.6%. I want to particularly call out our retail segment, which delivered revenue of 5,515 crores in financial at 26, a growth of 84% year-on-year. The traction in our B2C business continues to be very strong, and this is a segment we are very excited going forward. On slide number 6, we look at the Q4 more closely. Module production stood at 4.2 gigawatt, 104% increase year-on-year. Cell production for the quarter was 0.7 gigawatt, and we sold 4.1 gigawatt of modules in this quarter. Our order book, as I mentioned, Stands at approximately 53,000 crores, up from 47,000 crores at the end of Q4, financially 25. The current order book does not reflect the retail portion, which is nearly represents approximately 20% of our revenue contribution. Our record pipeline remains robust at 100 plus gigawatts. Moving to slide number 7, I am pleased to walk you through some of the key strategic initiatives we have undertaken during the quarter. On the growth and investment front, we completed the acquisition of a strategic stake in United Polysilicon, Oman-based company, securing a long-term, fully traceable, non-Chinese supply of polysilicon. This is a very important step for us from a supply chain de-risking standpoint. Our subsidiary WRTL has announced the acquisition of approximately 55% stake in Associated Power Structures Limited. for approximately 1225 crores. This marks our entry into the transmission and distribution segment, which is natural adjacency for us. Our board has approved a capex of 3900 crores PV glass manufacturing for capacity of 2500 TPD. Glass accounts approximately 23% of module cost and 75% of module weight. So this backward integration will significantly strengthen our cost competitiveness and supply chain independence. On the capacity side, we have commenced construction of our 10 gigawatt ingot wafer facility at Nagpur, which is with a capex of 6,200 crores. We have commissioned an additional 3 gigawatt module manufacturing capacity in Samakhyalikach. A large part of our module manufacturing capacity has now moved to G12 and G12R technology. Of course, it's TopCon, which is the latest generation of the cell and module formats. And all our plant capacity expansion in batteries, solar cell, ingot wafers, inverters, and green hydrogen electrolyzers are progressing as per schedule. We are very much on track on all the projects. On slide number eight, we talk about what makes WARI different, the winning gauge. Our integrated business model provides full-stack vertical integration. Starting right from polysilicon to ingot, wafer, cell, module, and all the way to EPC and O&M. We are also pursuing horizontal integration across energy storage, inverters, transformers, green hydrolysers, electrolyzers, and many more. Our speed of execution remains a key differentiator. We have expanded our module manufacturing capacity multi-fold to 25.8 gigahertz within 7 years. We built 1.6 gigawatt greenfield module manufacturing capacity in U.S. in just 12 months, amongst the fastest of its kind. We are also on track to expand our U.S. manufacturing capacity to 4.2 gigawatt over next 6 months, ensuring local supplies in U.S. Our financial discipline is well established. We have maintained a debt-to-equity ratio of less than 1, despite heavy capex cycles for an earlier decade. Our capital allocation follows a simple principle, book and belt, which means every rupee we deploy is backed by confirmed demand and a clear path to returns. That's our commitment, growth with discipline. We continue to de-risk our business by ensuring no single customer, market, or segment define us. Today, our retail, service, and overseas segments contribute 60 to 70 percent of revenue. A testament to this approach. And we are taking it further throughout online sales, market expansion, and strategic technology tie-ups, continuously broadening our revenue base and reducing concentration risk. If you see slide number 10, that is where I want to spend a moment to talk about a bigger picture of where Wari is heading. We are emerging as India's only fully integrated energy transition player. We call it this our journey from Wari 1.0 to Wari 2.0. With approximately 3.5 billion of committed capex, we are building our capabilities across the entire energy value chain. Post completion of all the committed capex, VARI 2.0 will have approximately 28 gigahertz of module, 15.4 gigahertz cell, 10 gigahertz ingot wafer, 20 gigahertz hour of battery, which includes the cell, bag, containers, 4 gigahertz of inverters, 1 gigahertz of green hydrogen electrolyzer. 20,000 MVA of transformers, 2,500 TPT glass, plus smart meters and D&D capabilities. Our integration across the entire energy value chain, along with structural demand, is expected to expand total addressable market by four times, from approximately $1 trillion today to approximately $4 trillion by 2035, our end-to-end integration unmatched scale. An ability to deepen client wallet share position us uniquely to lead India's green revolution and serve as a comprehensive solution provider to our customers globally. All in all, last year has been landmark year for Wari. The results are exceptional. Our execution is on track across all the projects and runaway ahead of us continues to expand. We look forward to a very exciting financial 27 all be on. With that, I would like to hand over to our CFO Mr. Abhishek for his remarks.

Thank you, James, sir. Good afternoon, everyone, on the call. I will now take you through the next set of slides, which cover our adjacent businesses, demand outlook, quality credentials, and retail engine, all of which together are building the foundation of VARI 2.2. Let me begin with slide number 10, which our CEO has briefly introduced. This slide captures the full picture of our translation. Today, VARI is not just a solar model company. We are systematically filling out every critical component of the new energy value chain. From entire solar value chain to VESS, electrolyzers, inverters, transformers, solar glass, smart meters, and T&D, we are constructing an energy transition ecosystem that no other company in India offers today. We are deploying three and a half billion dollars of capex over the next two years to scale core capacity, expand into adjacent value pools. This position has to capture a TAM that is expected to expand roughly four times from approximately a trillion dollar today to $4 trillion by 2035, a decade-long journey with a clear runway, translating into a multi-year runway of compounding revenue growth. The strategic logic is very simple. Every new capability we add deepens our volition with existing customers and also opens up new customer segments. Let me now walk you through each of these adjacencies in detail. Slide number 11, which covers our inverter business. Invertors are the brain of any solar installation. They control power flows, capture critical user data, and are increasingly becoming central to energy management. The global solar inverter market is currently approximately $16 billion annually and is expected to grow at roughly 11% CHER over the next decade, reaching approximately $46 billion by 2035. In India, this market stands at approximately $1 billion today and expected to reach $1.6 billion by 2035. What is important to note here is that India is emerging as a reliable alternative to China for U.S. and EU buyers, driven by geopolitical stability and free market compliance. Energy security and data localization are becoming key drivers and under the Digital Personal Data Protection Act. Having India hosted, data builds significantly stronger customer trust. Our positioning in this segment is strong. We have planned capacity of 4 gigawatts at our Sarudhi facility in Gujarat, with a capex outlay of approximately 180-odd crores. Phase 1 of 3 gigawatts has already commissioned. Remaining 1 gigawatt shall be operational in current financial year. What makes this particularly exciting for us is that we are capitalizing on our existing retail outreach to provide a one-stop solution. Modules, inverters, and certainly going ahead, storage, all under one brand. There is no incremental go-to-market build required for this. The channel is already in place. Moving to slide number 12, we talk about transformers. Transformers are backbone of grid expansion. And with the massive build-out of renewable energy capacity, the demand for transformers is only going to accelerate. The global transformer market is currently approximately $68 billion annually, moving at roughly 7% CGR, expected to reach around $130 billion by 2035. In India, the market is approximately $3 billion today and projected to reach $6.5 billion annually by 2035. Under the revamped distribution sector scheme alone, the total outlays are approximately $33 billion. There is a huge supply gap. Approximately 5.9 lakhs distribution transformers have been sanctioned versus only 1.7 lakhs installed, which tells us the scale of this opportunity. At Gwari, we are current transformer capacity of around 4,000 MVA, and we are adding up another 15,000 MVA of capacity, taking total to 20,000 MVA in current financial year, with an KPEX outlay of around 192 crores at our Alwar facility in Rajasthan. We are expanding the product portfolio to include distribution transformers, inverter duty transformers, extra high-voltage transformers, all under one roof. We continue to build out order book in this segment and have already secured orders from global MNCs, which validates our quality benchmarks and global aspirations. Slide number 13. It covers what I believe is one of the most important growth segments for us. Battery energy storage system. BEST is emerging as code enabler of grid stability and renewable integration, and the numbers Global annual best edition is expected to reach approximately 1TWh by 2035. Right now the number is 247GW in 2025. Almost 4x growth. India's best install capacity is expected to increase from around 1GW in 2025 to 236GW by FI32. That means, India is expected to add around 80 gigawatt hours annually between 27 to 35. This is primarily driven by BESS and the EV segment. Grid stability concerns and containment issues are accelerating this demand. With the mandatory requirement of minimum 2 hours by the Government of India for PV tenders, this policy framework is now firmly in place to support large-scale adoption. Our best capabilities are being built out with a plant capacity of 20 gigawatt hours. Out of that, phase 1, 3.5 gigawatt is expected in the current financial year, and phase 2 of 16.5 gigawatt by next financial year. The total capex outlay is approximately 10,000 crores. This facility will emerge as India's largest integrated advanced cell chemistry cell and batch manufacturing hubs. Our offering will include LFP cells, battery packs, and containers, and we are also pursuing further background integration to indigenize the large part of the value chain. We are targeting data centers, utilities, CNI customers, and the residential segment altogether. Moving on to slide number 14. Middle East prices have only highlighted the importance of energy securities by alternate means, with hydrogen blending, offering a de-risk infrastructure. Infra light entry into the green molecule economy with predictable demand visibility and government bargaining incentives. All of this positions early movers in electrolyzers, blending stations, and hydrogen-related turbines and pipeline retrofits to capture the outside returns as energy transitions shift from volume 3 to existential. At WARI, we are targeting a capacity of a gigawatt at our DUMD facility in Gujarat in current financial year and a plan capex of 676,000 crores. We have secured the electrolyzer PLI for 444 crores and hydrogen PLI for across 510 crores. Our strategy is very clear. We are starting with electrolyzer manufacturing, moving to build-on operate projects, and then transition to green derivatives. Our target segments include refineries, fertilizers, chemicals, steel, plants, specialty chemicals, and mobility. On slide number 15, we are playing out our path to solve land and connectivity-related issues that at times slow down the renewable power adoption in the country. In last 12 to 15 months of time, we have signed TPS-1713 megawatts with credible utilities and global CII customers. We have also secured connectivity for developing approximately 8 gigawatt of projects comprising solar, wind, and wells across central and state transmission networks. Our total commitment in this segment stands at 3,250 odd groups, and we are building a serious value-driven portfolio for our marquee clients, which creates long-term order visibility across all the manufacturing segments within the group. Moving to slide 16, we talk about PV glass. This is, again, an exciting story. Glass accounts approximately 20% plus of our module cost, and one of the most critical components in assessing the module quality, efficiency, durability, and yes, the cost. India's PV glass supply has a gap of across 5,500 ton TPD as of now, and over the next five years, this is going to increase. At Wari, our board has approved 2,500 TPD capacity, which is enough to produce approximately 15-17 gigawatts of modules per annum, at a planned capex of 3,900 crores. Captive demand for COC-compliant PV glass, which secures off-takes from day one because of our U.S. presence and U.S. facility. And at target yields, our landed cost undercuts at Chinese supply, building a structural margin cushion into the current pricing. We are converting a dependency into a pricing power, and that is opportunity, which we are excited about. Slide 17. We got our EPC business, which is fully integrated already, from concept to commissioning to long-term O&M, all under one roof. The model is already proven to the ground. We have executed more than 5 gigawatt worth of projects and under execution around 3 gigawatts. And currently, our acquisition of EPSL is ongoing, with which we will be extending the same discipline into transmission and distribution EPC as well. This gives us nearly 3x revenue visibility ahead of us in a market that generally lacks reliable, large-scale EPC partners. Now, moving to slide 18. This is where our long-term confidence truly stems from the demand outlook. Globally, solar capacity reached across 2.5 TWh in 2025 and expected to reach 8 TWh by 2035, making solar the single largest contributor to renewable power growth. Globally, solar additions are expected to grow from around 700 GW in 2025 to 860 GW in 2030 and around 1 TWh by 2035. Again, a large opportunity. Domestic front, India adds 44.6 gigawatts of solar capacity in FY26, taking cumulative solar capacity to around 150 odd gigawatts. India's solar additions are expected to grow from 38 gigawatts in 25, 44 gigawatts in 26 to around 72 gigawatts by 2030. And our estimate is to grow 100 gigawatts annual capacity deployment in 2035. The evolving geopolitical landscape has only strengthened the energy transition imperative, and Wari is at the center of it. Moving to slide number 90, at Wari, solar is the core, and from that core, we are building the entire energy value chain. Upstream, we are integrating all the way back to polysilicon, and on downstream, we are extending into storage, electrolyzer, inverter, transformation, transformers, GND, etc. One integrated platform owned end-to-end, built to capture value wherever the transition flows. On slide 20, we talk about something that is not always visible in the financial numbers, but absolutely critical for sustained competitiveness. Our quality and bankability leadership. These are not just one-time certifications, but reflect a continuous, multi-year journey of product performance, Process Optimization, Field Validation, and Financial Strength. With over 50 plus global and domestic certifications, we have built entry barriers that are hard for others to replicate. Moving to slide number 21. Again, something that I am really proud of, India's deepest solar radial engine. We have built a scalable unified distribution engine that covers today 27 states. 200 districts and more than 600 franchises over 2,500 authorized service partners. Huge number. We have deep presence across solar demand clusters in India. Our strong last-mile access through our installers and franchise network gives us the ability to influence customer decisions is a point of sale, and the channel leverage is enormous. The same distribution engine that's just modules today can enable rapid rollout of kits, bells, inverters, and future products with no incremental go-to-market build-out. Every additional product we push through this channel, it reduces our customer acquisition cost further. This is why I feel that we are building something large. And finally on slide Number 22, the result speaks for themselves. Wari is India's number one solar retail brand with highest national share in calendar year 2025. Around one in every six installations in the country carries Wari name. A persistent action in brand building from regional advertising to partnership with cricket teams on ground awareness and digital marketing that are translating direct entry into the market penetration and brand visibility. The engine has been built. And Moot is establishing. Now I will quickly brief upon financial numbers. For a full year, our consolidated revenue from operations stood at 26,536 crores, reflecting a healthy growth of 83.7% year-on-year. Operating EBITDA came in at 5,998 crores, registering a growth of 117% with margins improving to 22.27% versus 18.84% in the previous financial year. Profit after tax was 3,884 crores, moving by 101% compared to last year. ROE for the year was 29%, while ROCE was 32%. Turning to Q4. We closed the quarter with revenue from operations of 8,480 odd crores, marking year-on-year increase of 111%. Operating EPETA for the quarter stood at 1,576 crores, up by 70% margins. Profit after tax for the quarter was 1,126 crores, compared to 644 crores in Q4 of 525. I now hand over the call back to our CEO.

Thank you, Fishek. Looking ahead, our priorities are very clear. Continue scaling capacity in line with the demand, deepen integration to improve the cost competitiveness, expand across markets, and keep investing in technology and innovation. To sum up, financial at 26 has been a year of strong progress. We have delivered on growth, strengthened our position, and built a solid platform for future. With strong industry tailwinds and a clear strategy, we remain focused on consistent execution and long-term value creation. We continue to remain upbeat on our growth prospect and guiding for operating EBITDA of 7,000 to 7,700 crores for financial at 27. Thank you for your continued trust and for being with us on this journey. With that, I would now like to request the operator to open the floor for questions.

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 touchtone 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. The first question is from the line of Arun Kailasin from GeoJit Investments Limited. Please go ahead.

Yeah, hi. Thank you for, you know, letting me to ask these questions, and, you know, congratulations on the numbers management. So, I just wanted to know, like, why there was a very steep decline in the operating EBITDA margins in this quarter versus in the previous quarter? And that would be my first question. And if you could also give us a color on the realizations of the current run rate of realizations for the DCR, non-DCR modules as well. Thank you.

Thank you for that question, Mr. Arun. So on a question about the margins this quarter compared to last quarter. Over last quarter, we have seen two things which one has envisaged, the war in the Middle East and the crisis of commodity prices. Over last quarter, the biggest impact which has taken up was the impact of silver pricing and copper pricing, which has, in a way, taken some bit of our margins. Also, more important to note here, because last quarter, there was also some impact on logistics cost. There was a limited moment of ships inbound as well as outbound. Out of that, the cost of rate has gone to the roof, like never before. And the mix of the sales again adds up to this. If you look at our mix of sales of last quarter compared to a quarter previous to that, you will realize that our revenue from the overall overseas operations, overseas operations, has come down compared to Q3. So, three put together has impacted the margin. But one thing I would like to add here, since market has normalized already now, we have started practicing, customers have started practicing the increased price in the new commodity levels already. So, we really foresee the implication that price have adjusted for the higher commodity prices already at this peak. The another question of DCR, non-DCR market, like currently if we look at the non-DCR market for us, there are two segments in non-DCR. One is utility and another is our retail segment. Utility segment of prices ranges between 15 to 16 rupees with the, I would say, addition of the higher commodity price and now the retail prices go with an incremental rupees per what we claim to us. The DCR pricing ranges in the range, basically, the Monopark or Topcon, between Rs.21 to Rs.22. Hope that answers.

Okay. Also, I just wanted to know, like, you know, granted that, you know, worry is considerably shielded from the impact of any of the anti-dumping duties, per se, in the U.S. market, But do you think that, I mean, do you see any sort of panic negotiation with regard to changes in pricing or even different deliveries in that particular market?

So, thankfully, ahead of time, we were able to start our production in the U.S. itself. The 1.6 gigawatt facility started last year has already jammed up, and another 2.6 gigawatt worth of new facilities are going to go live over the next six months of time. So, we will have approximately 4.2 gigawatt of U.S. local capacity for distributing in the local U.S. markets. So, that insulates us from the impact of import duties on panels. At the same point in time, if you look at the export market also from India, since we have already established our supply chains ahead of time to alternate markets, including the markets from Africa and Europe, where we are sourcing ourselves from, that again insulates us from the duty on solar cells originating from India. So that's how we have been able to sail through the entire duty scenario, and I think we are in best position today with local 4.2 gigawatt capacity within the next six months of time. Okay.

I was also wondering...

Sorry to interrupt you, sir. Sir, I would request you to kindly rejoin the queue for follow-up questions. Sir, I would request you to kindly rejoin the queue. We have a long queue today.

Okay.

Thank you.

Thank you, sir. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to only one per participant. Should you have a follow-up question, please rejoin the queue. The next question is from the line of Abhishek Negam from Motila Loswal. Please go ahead.

Yeah, hi. I wanted to check on the G12R transition which you were doing in the last quarter. So, my understanding is there was a bit of a shutdown on some of the lines in the last quarter. So, is that complete or there could be some spillover in the first quarter as well?

Yeah, so we have converted three lines to G12R. So, currently, 11 lines are working. Three lines are monoperge. Three lines we have converted to G12R. It is in ramp-up phase. And five lines continue running into the M10R TopCon.

Okay, so these five will probably get converted in the first quarter, right?

Yes, yes, phase manner. Once the three lines will get stabilized, runs fully, slowly we are ramping.

So, I mean, it could be one queue, it could be two queue, depending on when this goes through.

Yeah, yes, one quarter. But at the end of the day, Abhishek, for you to take a note of one thing which is very important here is we are expecting to go back to the CWF that you achieved in the month of Jan 330 megawatt of monthly number in next two years, two months' time. In fact, since we are shifting to G12R now, we will have the upset of higher efficiency and higher realizable value from the same set of cells. So you can expect in terms of megawatt and in terms of realization, the higher number by 10 to 12% out of the current transition which has happened. Hope that clarifies.

Okay, that works. Thanks. I'll come back in the queue.

Thank you. The next question is from the line of Ravid Haramshi from ValueQuest. Please go ahead.

Yeah, hi. Thanks for taking my question. Just want to understand why was the export mix so low in this particular quarter, and would that still be the case going forward, and also a little bit on the outlook for order book accretion on the exports front?

Hi, everything. So, the question of export being lower this quarter. So, last quarter, between Jan to Feb, you know, we have seen a lot of impact on the logistics delays all across. So, ships are getting delayed. These tax to load material on ships are also getting lower because of the congestion of these large ships in the Middle East markets. So, because of that, what has happened is a lot of lots which have been manufactured and prepared for the export market could not be shipped. If you look at our balance sheets also, you will realize that the inventory overall has gone up largely because of the logistic issues. And the same is going to get converted within the current quarter. So that has not allowed us to do as much export as we generally do every quarter and change our revenue mix as well. In terms of the order book question, like we have mentioned that we have got 53,000 crore worth of total order book already. In terms of the order book detailing how much is exposed, so for us, it is not. Export-export, it is overseas revenue because we have around 1.6 gigawatt capacity in US, which will be 4.2 gigawatt in existence of time, wherein we are delivering and manufacturing and delivering both in US. Some bit will continue as exports from India. In the total order book of 53,000 crore, around 65 to 70% is from the overseas long-range order book to be delivered over next 3 to 4 years of time. And what is not accounted in this 53,000 crore order book is the retail business, which is across 20% of our total revenues.

Thank you. Just one follow-up question. What is the purpose of the fundraise?

So, we have taken the enabling resolution to raise up to 10,000 odd crores. We will soon also be laying out the request for approval from the shareholders for raising this capital up to 10,000 odd crores. That request will also cover up all the objectives of the Federation.

Thank you.

Yes. Hi, Ravi. This is Varun here. I just want to clarify on this fundraise. I think the WALI 2.0 transition that Abhishek and Jinesh Bhai spoke about essentially means a much bigger opportunity, both in terms of the core module and the adjacencies that is opening up, both in terms of India demand and global demand. Now, for us to both in terms of increase the customer wallet share, de-risk our supply chain, localize our bomb, our entire materials, and the support of government in terms of policies. For example, the glass manufacturing is essentially an outcome of the duty protection now that the government has introduced that you would be aware of. So the margins earlier were much lower, but now the margins are very high and ROCs are very healthy, which essentially has encouraged us to take that CAPEX. So this fundraise is to deepen our entire platform journey, both horizontal and vertical, and also to embark on The entire materials backward integration. This will lengthen our growth curve, protect our margins in ROC over a much longer period. Thank you so much.

Thank you, sir. We'll take the next question from the line of Aritra Benerji from Nomura. Please go ahead.

Thank you for taking my question. My first question is on the glass manufacturing side. I just wanted to understand what benefits we can expect from the glass manufacturing side in terms of manufacturing cost and will it help in any sort of boost on the margin front?

Thanks for the question, Mr. Banerjee. I think before I jump off on the commercial benefit, the more important element here is, first is that for our entire supplies in the state's market, we require FUC-compliant material. This glass manufacturing will ensure that we have continuous supply under control environment from India, which will enable the U.S. glass feed-in for the factory. Secondly, for our India factory also, since we have PLI benefits from the government. The localization of glass is going to ensure that we start getting our PLIs soon. And thirdly, the current ROCs and ROEs in glass because of the cost curves and local manufacturing benefits, including the protection by the government through duties of long-term. This is making a lot of sense. Glass is around 20% plus of the total cost that we have. And if we are able to in-house the glass and ensure that we, apart from cell, also control the cost curve of the second biggest component in the bill of material, it will ensure that we are completely independent of these movements, the glass. Like in recent example, last quarter, glass was one of the cases wherein prices rise sharply because of some problem or some trouble in the marketplace in China. So, that way, we are going to leverage on our capabilities to consume the entire glass that we manufacture. In fact, the capacities announced are much lower than what we will be requiring for our own food in stock. So, we will continue to even buy out from markets and also have in-house sourcing of glass self-production. Hope that helps.

Yeah. So I have just two more questions regarding the best business.

I'm sorry to interrupt you, sir. I would request you to kindly rejoin the queue. There is a long queue for waiting to ask questions. I would request you to kindly rejoin the queue for follow-ups. Thank you. We'll take the next question from the line of Shweta Jain from Anand Rati Shares and Stockbrokers Limited. Please go ahead.

So, I just wanted to understand two things. One is, how would the cost matrix change if we're importing sales from Ethiopia or any other African market versus Indonesia?

Hello.

Announcement of duties by U.S. government, my chairman has addressed this question, although I am repeating here. So, it depends on the U.S. duties onto each country. So, in U.S., the solar module is based on the solar cells where it produces. Where the junction has been produced, that country will be considered as the origin of the solar modules. So, Ethiopia cells will have a 10% duty on US, wherein Indonesia is having 34 plus 10, like 44%.

Yeah, so for you to understand in a way, Shwetha, I think I'll try to make a little easier for you also. For example, if you're importing from Ethiopia versus, let's say, from Indonesia, you will end up paying duty on the entire product if you can use the product that sells from Indonesia. Similar is the case currently with Indian cells also. If you can use Indian cells for manufacturing in the U.S. or either export from Indian market, We will have to pay up the recent announced duty of 123 odd percent on India, while European cells will not have those duties.

So what I'm asking this question is, in the recent ADD order, the anti-dumping duty, apart from the CVD that came in earlier, the ADD specifically mentions India and Indonesia. So with that into perspective, this cost dynamics would have really changed. You know, the last, I think, what we recall is the sell imports we did was majorly from Ethiopia and then Indonesia. So are we looking at new markets considering this cost cap would have increased, what, like, 10 percent or 40 percent, but Indonesia is now more than 100 percent with ADDs at least.

Indonesian sales we are not using for modules shipping to USA that we are using for India. Ethiopian sales we are using for the US market.

In fact, Shweta, to add up to the context, if you look at the current build-out of capacity, you will see that there are some bit of capacities which are building out in the Middle East also, wherein there will be new cell capacities. For example, in Oman, we have acquired the PolySilicon company's stake, right, strategically. Therein also, in Oman, also we see some capacities are coming up for cell. So, there are cells available from Oman, we import in India, manufacture, module, and export to U.S. The duty will be applicable is what duty would have been applicable from Oman, which is 10%. So, that way, as we move on deeper in the supply chain, we keep on diversifying our source of cells for the exports in U.S. or manufacturing. We keep ensuring that our supply chain pocket is expanding. And we have been doing this all through day and night.

Got it. Thank you. I'll come back in the question queue. Thank you so much.

Thank you. The next question is from the line of Sabri Hazarika from MK Global Financial Services.

Yeah, good afternoon. So just wanted to get some more color on the guidance that you have given, 7,000 to 7,700 crores. So looking at what you have mentioned that the cell will take probably one or two quarters to convert fully to G12R, And I think module capacity also, we are, like, close to 26 gigawatts, which will probably go up by another 2 gigawatts. So how does, I mean, how does, how does we, how do we achieve this 20, 30 percent growth, break up between how the revenue would be, how the production volume should be, what kind of margins, some color on that. Thanks.

So, hi, Sabri. Thanks for the question. I think for someone to understand how it works is, like, FI26 are operating EBITDA about 5,908 crores. The guidance is 7,000 to 7,700 crores, so a range of around 20 to 25% of growth on the absolute level of EBITDA numbers. In terms of the cell production, the current, as our CEO just mentioned over call, that in a quarter's time, the cell production will not just normalize to what it was a quadro bag, it will actually have an effect of upside of 10-15% as well. Additionally, in H2, our 10 gigawatt cell is also going live, which means in... Second half of this year, our capacity, which will be given in itself for our own model production, is not 5.5 anymore. It is 15.5 gigawatts, more than sufficient for every module that we manufacture and sell in this country. So, which means the impact of margin expansion, because of the regulatory and DCR reasons, will start coming in big way in H2. H1, we will see a transition from 5 gigawatts to 15 gigawatts. And that's how the number will also play out.

Okay, so you're expecting cell to be adding, and ingot wafer would be in FY28, right?

Yeah, ingot wafer will be in FY28. Also to further clarify here, since we have given you the consolidated guidance of EBITDA, this number also factors in the pre-startup cost of many of the projects which are under construction and going like this natural year. For example, We are starting a 3.5 gigawatt battery energy solution plant, which includes the cell manufacturing, pack manufacturing, and maintainers in Gujarat this year. We have deployed majority of manpower, white-collar, as well as blue, already in the shop floor. So the manpower, which is not on the construction side, largely on the business development side, is already on the board and is a cost to us. Similarly, the case is there for all other businesses which are going to go live. Currently, the existing revenue is also taking care of the businesses wherein the assets are going to sweat starting from H2 this financial year. Hence, you will really start seeing the VARI 2.2 results from H2 this year and going to a different level in FY28 when every asset is ready, is functional, is delivering result and going at full throttle. Hope that clarifies.

Got it. Thank you so much.

To add what Abhishek is saying, what essentially what we're saying is the core solar module stack, which is module manufacturing and cell, the entire KPEX will get completed in the FI27 financial year. The ingot wafer and part of battery will get completed in FI28. This 27 and 28 will complete large part of the Capex, and 29, you will actually see the entire WARI 2.0, the benefits of all operating businesses now getting seeded, starting to reflect in the financials.

Got it. Thank you so much. Thanks.

The next question is from the line of Prakhar Podhwal from Ambit Capital. Please go ahead.

Just one question on margins. I want you to understand, like you have mentioned, 4.1 gigawatt of modules sold. I understand exports mix have gone down to 21% from last quarter at 32%. Is the margin moderation also a reason, another reason maybe that your DCR mix has gone down in India because your cell production, if I see which is 700 megawatt, so largely is it safe to assume that that would be your DCR mix or would you also be buying a lot of cells from outside to cater to that segment from basically other cell manufacturers in India?

I think we have hit the right at the center. The understanding is very clear that at the higher model production level, the cell, BCR cell or local cell production has not gone up. And hence, there is some moderation because of this mix as well. Yes, there are customers for which we have even to buy out cells from the local markets just to ensure that we are delivering to our customers on time. But when you do that, you are putting the money on the table to the other side where you are procuring the sales from.

Understood. Okay. Thank you, sir.

Thank you. The next question is from the line of Deep Sanghvi from Dalal and Rocha, Stockbroking Private Limited. Please call.

Hello. Am I audible?

Yes, sir. Please proceed.

So, first of all, thank you for the opportunity, and congratulations on a great set of numbers for the quarter as well as the year. So, my first question was regarding the gap between the EBITDA and the cash flow from operations, with the CFO conversation declining, I think, around 100 plus percentage to about 27.5, I guess, around that number. So, could you help me understand the key factors behind this revolution?

So, if you look at our cash flow statement also, you're pointing out very right that the cash flow operations percentage has significantly come down. As I mentioned in my earlier reply as well, that because the inventory built out has happened in Q4, largely because a lot of material has kept on the shores, could not be shipped out because of the logistics issue. Had that been the case, we could have realized the cash into our balance sheet. That would have changed the number altogether. The inventory levels in the balance sheet also reflect the same. If you keep the levels of inventory at normalized levels, the same number will go back to the normalized level of 70% to 100% conversion of cash from current 27%.

Yeah, okay. And just a follow-up, so could you explain the

cash conversion cycle?

Please rejoin the queue for follow-ups because we have a long queue. Participants are waiting for that. Thank you, sir. We'll take the next question from the line of Kunal Shah from Dam Capital. Please go ahead.

Yeah, hi, sir. So, just could you give some color on this entity, Wari Semicon, and how are we thinking of this business? And what would be the status of this entity in terms of, let's say, talent acquisition, government PLI, CAPEX timing, and also the rationale to get into this segment? Thank you.

Well, I think I would really want to take this opportunity to clarify to all. The company that you saw yesterday, Wadi Samircon, is a company which is going to only manufacture to start with the components which we are consuming in the inverter manufacturing at our facility in Suruti, in Gujarat. So, right, we are manufacturing inverters at our facility and we are getting the complete lockdown and we are building the inverters in our factory. We require diode for the same. This company is going to build out diodes, preclude diodes globally, and get the localization of diodes within the umbrella of Wari Power, and hence the corporate structure has been kept in a way that this company is a whole new and subsidiary of Wari Power Private Limited, which is the electronic manufacturing arm of Wari Energies.

Sorry, just to clarify, but there would be like an OSAT business in this entity, right?

This is a recently incorporated entity with the tie-ups which are underway already. We believe that it is most critical for the electronic manufacturing to have this business or this backward integration under its own corporate structure, and hence this decision.

Thank you. Thank you, sir.

We'll take the next question from the line of Praveen Sahai from PL Capital. Please go ahead.

Yeah, thank you for the opportunity. My question is related to the order book. Sequentially, if I look at it, there is a 7,000 crore of order decline. So, can you give some color? Is that some order domestically because of the challenges related to the procurement order? As you had highlighted, you had domestically also sell, procure. There is some depletion in the order book domestically?

So, if you look at the order book, around 53,000-odd crores, we have delivered more than 8,400 crores of revenue already. So, on a quarter-on-quarter basis, there's an intake of orders, but then the ship-out of orders is much higher than the build-out. So, last quarter, largely because of the disruption in the Middle East, the new order from the overseas market have deferred from maybe a quarter to a quarter's time. Similarly, there's a lot of dispatches which are happening in the local market, and in the local market, if you see, there is an element too, which is coming up. So, many decisions in the CNI sector largely are held up because of the few people are fighting that maybe there could be some extension, etc. So, decisions are getting deferred. I think government has clarified a day before. That at which point in time they will be able to use the earlier shipped out panel under a LMA 1 category to the site so that they can actually use even after that date. I think that clarification is already under progress by the government. So because of that, many decisions were pushed out to next quarter. And hence the net of take from the local market also was slowed down.

Thank you. Thank you for the clarification.

Thank you. The next question is from the line of Nidhi Shah from ICICI Security. Please call me.

Yes. Thank you so much for taking my question. So, my question mainly pertains to our supply in the U.S. So, we already know that because of the... It's because of the... The restriction on Chinese cells, we cannot use that in the US. But my question mainly remains on other components of the solar module as well, which is the solar glass, the junction box, the wafer, and any other components. In order to satisfy the UFLPA guidelines, do we have to also procure those from non-China sources?

No, accept sales, no need.

Okay, do you think that this could come in the future?

No, we don't think so, but as a matter of principle and policy, we are not using Chinese polysilicon wafers for USA. And this is all from India to US, where in US manufacturing, we have to procure all the material from the non-FEOC countries.

So, what that means for you, maybe, is that if you are going to supply components to U.S. market, let's say for manufacturing in U.S. also, be it glass, be it cell is already restricted. So, apart from, say, glass, junction box, EVA, flagship, everything and anything, it has to come from a non-FOC source starting this April 26. So, which ensures that our build-out of, let's say, glass will have its market from day one as non-FUC country. This non-FUC clause, if I would take one minute just to clarify further, is an enabling factor for non-Chinese players to build out capacity outside of China and Russia and create the entire value chain for shipment to U.S., either for distribution in U.S. or manufactured in India and then shipped to U.S. Both the ways are open. But FUC is ensuring the non-Chinese supply chain get a great traction in the U.S. starting this approach in 2026. That's how you also see a lot of new orders coming in the U.S., from U.S. to U.S., because of the FUC requirements as well. And this is bound to increase only.

All right. Thank you so much.

So while there is no way for us to quantify the ex-China market, which is very, very large today, but it's safe to say that it's growing at a very high growth. U.S. has already become local sourcing or FEOC compliant. Domestic market in India is already becoming completely dependent on local manufacturing. But even Europe has announced its intent to become an ex-China sourcing market. So, needless to say, it's difficult to quantify, but the ex-China market is a very high growth trajectory for several years now.

Thank you, sir. The next question is from the line of Akshay Gattani from UBS. Please go ahead.

Hi, sir. Thank you for the opportunity. So, a question is related to VFIRs and includes. There has been some revision, both in revision to the cost of KPEX and timelines also, like KPEX has been moved up to 62 billion versus 51 billion earlier, and timelines are now FY28 versus FY27. So, why there's a change, like some technology-related change, or is there any other reason to this change in both KPEX and timelines?

So, if you look at the plan now, we were originally putting up 6 gigawatts worth of facility versus now setting up 10 gigawatts of facility. Because of that, and other reasons, we also shifted our locations as well from earlier mentioned locations in Odisha to now Gujarat and Nagpur. So, that's how some delay in the overall timeline, but this revised timeline is for the 10 gigawatt facility altogether, including the earliest 6 gigawatt and the additional 4 gigawatt. Hope that helps.

Got it. Thank you, sir. And what will be your timeline for glass manufacturing plant?

So, we have mentioned in our disclosure also that we are expecting the glass production for the next 24 months of time.

Got it. Thank you.

Thank you. The next question is from the line of Amitoj from 361 Capital. Please go ahead.

Yes. Thank you, sir, for taking my question. A few questions. First, on the copper and silver commodity pricing, I think the silver and copper pricing has been on an upward trend since the past year, but the margin impact has been very severe this quarter, 590 pips decline. So is there any other factor? Now, of course, you mentioned that we have been also procuring DCR cells from other third parties domestically to cater to a DCR order book. So that could be the main reason for our EBITDA margin decline, or is this more structural and we should see EBITDA margins at 20% levels compared to 25% seen in the previous quarters?

So, as we have said, one thing we already covered, that the overall cell production or the cell dispatch, to be precise, has been in line with last quarter, but overall production of modules was way higher. Hence, the percentage-wise, the number was lower. And, in fact, in that as well, since we had to procure some cells and supply to our customers, that also diluted the number. This is in over and above the addition of the impact of commodity price. At the same time, I mentioned in my earlier reply as well that the change in overall sales mix from the overseas revenue to more of utility also had an impact and some dilution in the margin overall.

Okay, thank you. So, should we see this as a structured trend, or the margins are expected to bounce back from Q1 onwards? Any software ideas?

As I mentioned, like H2 onwards, since our 10 gigawatt cell is going to go live, our full-throttle cell execution, 15.4 gigawatt, production and dispatcher shall start. So that will lead to a point wherein our entire requirement of sell for the Indian market be manufactured and sourced in-house. And that will give a fillip to the overall margin profile that we have today.

Okay. Thank you. And just one last bookkeeping question.

I'm sorry to interrupt you.

Thank you.

Thank you. The next question is from the line of Raman KB from Sequent Investments. Please go ahead.

Hello, sir. Can you hear me?

Yes, sir. Please proceed.

Yeah. So, I just have two questions. One is more or less like a clarification with respect to the margins. You have guided the EBITDA level to be around 7,000 to 7,700 for the financial year at 527. So, can you just, if possible, can you just let us know whether, are you speaking to your initial guidance of maintaining the EBITDA margin of 20%, one of that, and a follow-up on that is, due to the increase in commodity prices, have you taken any price hike during this quarter, or are you planning to take any price hike in the future quarters?

I think I'll again re-emphasize on our earlier calls also, and as mentioned by you, that you've been guiding over all that on a long-range basis. If you really wish to see what is there in for the next 5 to 10 odd years, the safest assumption there will be is your 19-20% margin consistent for a decade long at least. Secondly, because of the effect of cells in H2 and more cells coming up in quarter beyond that, the margin profile compared to this quarter could be different because there will be more cells manufactured and shows in-house. So that completely uplift the overall margin profile. So, certainly, there could be quarters wherein the margin could be much higher because of the change in mix of DCR, non-DCR. Same point in time, relevant play also comes from the export book and export revenue. In a particular quarter, if the overall overseas revenues are higher, that also gives a belief to the overall margin profile of the quarter. So, two to three KPIs to monitor will be how much DCI are manufactured and shipped out in-house. Second, how much overseas revenue. How much revenue is there in the quarter. Thirdly, how much revenue are we also generating from our retail arm? Because these three put together takes care of 70-75% of market. And if you also look at the EPC business, which is doing phenomenally well, that also help us to work out on our overall margin profile.

Understood. Understood, sir. Sir, and my last question is, I'm

sorry, so I would request you to kindly rejoin the queue for follow-up or new questions. Thank you, sir. We'll take the next question from the line of Divya Patni from NVS Brokerage. Please go ahead.

Hello. So, firstly, congratulations on the great set of numbers. Could you explain the current margins in your module and sell business and how we expect them going forward? And also, there are concerns about the overcapacity in the module segment. So, how do you see the demand versus supply shaping up? And are the government policies like ALMM and PLI supporting in demand and pricing? That's it.

Let me take up the second question first to answer. The definition of supplies in the country is changing. With ALMM2 coming in place, the real available supply for the sector asking for DCR is not, let's say, 160 gigawatt of ALMM1 approved module. It is rather ALMM2 approved solar cell capacities integrated with module capacity. So, relevant capacity to note is 30 gigawatt today for new regulations kicking in from June 26. While the demand, like in last financial year, you have seen, 50-55 gigawatt of modules were consumed to install 44.5 gigawatt worth of AC side of solar installations. Going ahead as well, there is another regulation, ALM3, which is kicking in from 2028, which means that the cell manufacturers will have to integrate further with backward invert and wafer manufacturing over the next two years, three years of timelines. So, at that point in time, the, again, definition of supply will change over of integrated ingot, wafer, seren, and module capacity as a total capacity. So, we really don't foresee any scenario, any time next by 10 years of time, will be the supply is going to be much higher than demand. Yes, we foresee a balance between supply and demand. Anything that you export will be over and above, but the demand and supply largely equates with the regulations coming in at the right point in time, aligning with the capex by the serious players in the industry.

Okay, let me do some interpretation to this capacity numbers. There are multiple numbers out there with respect to module capacity. It could be 160 gigawatt, it could be 200 gigawatt. There is no way to ascertain clearly, but I'll just offer my bit. One is capacity, which is nameplate, but one has to adjust for the wafer input adjustment. So there is a 17% adjustment factor there. The other is utilization, not the theoretical utilization could be for everybody different, but the industry operates from the smaller players are much lower utilization, the more efficient players are at 75-80% utilization, so there is that utilization factor. The other is the efficiency factor, which is the cell efficiency. So what Abhishek is trying to say is, Let's say for utilities who are looking for high-efficiency modules, which have to perform for 25, 30 years, the supply is not in excess, right? There could be oversupply in the lower-efficiency modules, but that's not where VARI plays, right? Another interpretation of the EBITDA margin, and I think a lot of you have these questions around EBITDA margin. One, EBITDA margin is a function of the proportion of module and cell, and every company will have different proportions. So, VARI's module volume and value is much larger being an industry leader, and that's why module by design is higher value, and margins look lower. To give you an example, a company with no module sales and only sell will seem very high margins, but the value of sale will be much lower, right? What we emphasize from H2, the entire cell manufacturing will also be complete and operational. Then Wari will have the right proportion of module to cell, and that's why margins... Are poised to rise. There is a transition period. So please be aware of these two factors, one with respect to industry capacity, and the other is the module to sell mix. Margins are an outcome. Just one more last point on EBITDA per watt peak is the right way to look at it rather than percentage EBITDA margin, and maybe, Abhishek, you can explain one bit on that, why percentage margins actually change.

So, I would further take this on from where I just lived, and then if you look at the... Pricing, so there are different pricing for different markets. Let's say, if you're shipping out an export product, the pricing is in range of, let's say, 25-26 cents per watt peak, FOP basis, while a domestic utility product will be around 15-17 cents, so there's a price delta. In the exports, let's say if you're earning around 4 to 5 cents per watt peak, your margin will be in range of around 80-80%. In domestic utility, even if you are running 2.5 cents, you are still good to earn 15-16% of margin, while the EBITDA per watt peak profile is completely different from same panel which is manufactured. So, more important to follow is... How well is your sales mix coming out? Is it only going to one particular market which takes care of the overall revenue and margin mix? Or is it segregated to various pockets where you can really play out on the margin and also de-risk your customer segments? If there's a disruption in one market, you have alternates to deal with and supply with. Hope that helps.

Thank you, sir. Thank you for answering those questions. We'll move on to the next question, which is from the line of Partsha, an individual investor. Please go ahead.

Hi, I wanted to know what are the timeline of fundraisers and what are your plans for Indo-Solar, VARI Indo?

So, as we mentioned that we are going to come out with the objects also in the notice for the shareholder. Same point in time, we would also want to clarify on the timelines. However, right now we are taking the enabling resolution to do this fundraise for the next couple of months. We will be soon coming out with the clarification on the amount, etc. Second question on the endosolar, I want to clarify since this is the call for VARI Energies Limited. I think we can take up endosolar questions separately through the chat.

The next question is from the line of Donatella from VT Energy. Please go ahead.

Good morning to the management team, and thank you for taking our question. I'm talking on behalf of Mr. Volpe. We are speaking as an early investor who has believed in worry since 2009. First of all, congratulations to Mr. Itasdosh and the entire board on closing a phenomenal financial year, achieving nearly 6,000 crore in EBITDA and reaching almost 26 gigawatts of capacity is an evidence of your execution path. Today, our primary reason for speaking is to give a very warm and official welcome to Mr. Jignesh Rathard in his new role as CEO. Having known Jignesh since his days leading the production division, we know as long-term shareholders, first of all, his technical brilliance and his dedication to this company. The transition from Phase 1.0 to Worry.2.0 couldn't be in better or more capable hands. We see the market reaction today, but as partners, since 2009, we look at the fundamentals. The vertical integration into glass and the TND acquisition are the right strategic moves, according to us. So congratulations again, Mr. Doshi and Mr. Jignesh Rathod. We remain proudly by your side for this next chapter of growth. And now the question is, as you may know, the Italian government is trying to limit the usage of PV modules made in China. In Italy, 11 gigawatt of photovoltaic projects have been approved to be built with known Chinese photovoltaic modules and known Chinese sales. These projects could use Wari modules made in India, which would certainly lead to an increase in Wari's order book. Have you considered the Italian and European markets in your development plans? Thank you.

Hi, Ms. Donatella. Good afternoon. Nice to hear you after a long time. Give my regards to Mr. Walsh and the whole family.

He's online. He's online as well.

Okay, great. Yes, Italy is always close to Mr. Doshi's heart and entire Wari. From where we have started, our first line is from Italy with the capacity of 30 megawatt way back in 2007. And we love Italy. So, yes, it is in our growth plan. We have built an export team dedicated to Italy with three people, and two more are joining. We are addressing our supply chain from Southeast Asia and India for Italian market. And we are very much ready to restart the Italian market, which has been stopped since 2015 onwards. And we are absolutely ready for entire Europe as well.

Okay, thank you.

Thank you. The next question is from the line of Pallavi from Samiksha. Please go ahead.

Yes, sir, thank you for taking my question. I wanted to know what would be the efficiency of the G12 R line right now and what is expected in second half when we are full 15 gigawatt.

25.4% is the normal efficiency with Corona for sales.

Right. And you mentioned about the savings, right, the 10 to 12% savings. Is that the primary right now of this coming from the efficiency of the savings?

No, it is from Z12R, we can make 650-watt modules. M10R was 580-watt modules. So, increase of the wattage resulting into the savings, the realization of the profit.

Right.

Thank you, sir. Thank you. The next question is from the line from ACMIIN. Please go ahead.

Yeah, hi. This is Karan Bhogta from ASIPC Metha Investments. My question is the revenue mix. I just want you to understand what is the revenue mix geographically, and the question is related to how much we have exported to U.S. and Europe countries. And then something to DCR cell production, why the DCR cell production is so low as compared to the peers, which is something close to double the, you know, basically the production of cell. So these two things are co-interrelated. So first is your geographical mix in terms of revenue and the sales production.

In terms of the geographical mix in the overall overseas revenue, since we have manufacturing in U.S. itself, and we are also exporting from India as well, so our overall revenue from overseas, more than 90% shall be from U.S. markets alone. The remaining is from markets when we have started to explore and also started to ship out materials. However, over the next few months, we see a great amount of opportunity coming in from European markets and African markets as well. In fact, in the Middle East market also, we have started to receive the enquiries for build-out of large firms over there for a difference. So, that means not just U.S., there are three markets which have U.S. equivalent potential to consume overall renewables, be it Africa together, European markets, or Middle East. So, we really foresee a very diversified overseas market as well going ahead. Answer to your question number two around lower production on DCR, as we have explained in the earlier questions as well. That since we have been transitioning now from M10 to G12R size of cells, hence there have been some lag in the production of cells, but this will have benefit starting from a quarter down the line, wherein we will see 10-12% of higher production from the same lines, resulting into higher realizations for the long term.

Okay, okay. Utility Retail EPC, Polar Domestic.

Sorry, I couldn't get that question.

Utility, retail, EPC, all are domestic revenue mix.

Yes, yes, yes. In the revenue mix, yes, you're right. Okay, okay.

Thanks, thank you. Thank you. Thank you, sir. We'll take the next question from the line of Abhishek Negam from Motila Loswal. Please go ahead.

Yeah, hi. Thank you so much for the opportunity again. Just, I know this question was, I think, you know, it came up a little earlier in the call, but just on the cash conversion cycle and the working capital days, if I look at numbers in the last year, FI25, overall working capital cycle was around 45 odd days, which is now closer to 90 odd. So is this what we should sort of, you know, build and go ahead? And do you think that, you know, it's a sign that there is more sort of capacity in the industry? And so, the working capital is, you know, getting a little favorable in terms of the customers, or how should we think about it now?

So, there are two areas to look at to understand this better. First is the effect of inventory, higher inventory, which I also explained in my early reply, that in the March ending quarter, the overall inventory has gone to the roof because of lower shipments for the overseas market. Number two, the advance from customers has remained steady and strong, given the levels are also similar, but because the overall run rate of production has almost doubled in a year's time, while the absolute number of advances were same, Hence, the effect on the working capital cycle. So, despite the high advance from customers, even today, but because of higher sales numbers, the dilution in terms of working capital days. I hope these two put together explains the effect of cash conversion in the cash flow.

So, just one clarification on that. So, the percentage of advance, let's just say, assume, You were asking for, say, a 5% advance earlier. Is it still 5% or has it, say, gone down to, say, 2.5% or something?

In fact, not 5%. We have seen when we have been getting advances to that year now of 10% to 20% also in few cases, and in other few cases, 5% also. The trend isn't the same. However, because of geopolitical reasons, the tendency to be higher upfront advances for long-term contracts in the same set of customers has moved towards more advance at these. Time when you start the production or start the raw material procurement. So you won't get that much of higher advance on the day when you're signing off, but certainly you continue to receive advances before we start the dispatch or the production also. So our overall cash remains in the same environment of no credit policy. But yes, this will have an effect in the number of days of advance from customers. So, okay. I think that qualifies you.

Abhishek, just to add to, while you're right on asking about the working capital, but we shouldn't take our eyes off the main true north is ROC, and we see despite the rise in working capital, our ROC remains truly top quartile.

Thank you, sir. The next question is from the line of Nitesh Mehta from Locked Up Investment Group. Please go ahead.

Good evening and congratulations for a great set of numbers.

Most of my questions have been taken up, but I am keen to know how companies are planning for non-US and non-Indian market. That's what we said. Europe is our next big destination, Africa and Middle East.

Okay. So we can expect, say, some 15-20% revenue three years down the line from non-U.S. and non-Indian market?

Three percent down the line, yes, but it is post-loading.

Three years down the line, yeah.

Thank you, sir. The next question is from the line of Aritra Benderjee from Nomura. Please go ahead.

Thank you for picking up my question again. I just wanted to understand, you know, regarding the BHS business, what are the kind of unit economics and margins that we can expect and what will the contribution from FY29 of that BHS business to Wari's total revenue and EBITDA?

For someone to understand best business, I think I'll fall short of time if I start trying explaining what the economy is, but what I can do for you is make it a little easier. On the best business, the basic conversion plus the raw material that we will require for manufacturing of sale plus the BS cost. Our ROCs and ROEs are falling in the current range of delivered ROCs and ROEs over the historical numbers. To explain it further, you expect the business to generate around 18 to 20% margins without any support from the policy perspective or any mode of regulatory inculcated. If at all, there are policies which are more conducive for local manufacturing, which we are certainly hopeful as we keep hearing from the government as well that they are going to support Make in India for the entire value chain. I think the numbers could change, but the basic business economy is considering the ample demand coming from state's market and now from Middle East market also, wherein customers are asking for alternate supply solution for energy storage. I think this is the time to do the manufacturing deployment so that we have enough capacity available.

Yes, understood. And any thought of, you know, revenue color for FI 29 or any timeline that you have in mind for revenue contribution from BES?

I think it is too early to comment on any guidance around the revenue in FI 29. But if you wish to calculate anything, you can take up the total capacity that we are setting up, 20 gigawatt hours. You can also take an exemption for market around the average price per megawatt hour for these pairs in India and the U.S. The average would come around $110 to $120. I think you'll get some sense of the numbers that can come out from this business. But right now, I'm too early to comment.

Thank you.

I think we'll all agree that BESS is one of the biggest enablers of the entire energy transition. It is the most critical component for even solar to accelerate during the non-solar hour, because whatever surplus energy that gets created during solar hours can now be stored, and that gives new wings. to solar manufacturing. With respect to revenues and all, obviously, we can't put a number, but the industry number is that India would need anywhere close to 60 to 80 gigawatt hour of VES annually. And the cumulative number that is put out by Niti Ayo and MNRE is that India needs to get to 300 gigawatt hour of VES. Over the next five to seven years, VARI's 20 gigawatt hour is just a beginning. I think the runway of growth and capacity is multi-decadal in this segment. So let's be patient about how best segment plays out that has the potential to create a new VARI in itself. It would take a few years to get there.

Thank you, sir. The next question is from the line of Sushir Chokhti from Indus Equity. Please go ahead.

Sir, congratulations for very stable numbers. What do you forecast as your self-production in second half for the year and next year on established capacity which you have highlighted?

So, if you wish to get a sense of cell, difficult to give exact number, but I can give you some range, like on the existing cell capacity of 5.4 gigawatts, you can expect in the H2, because there are six months, I'll cut down the capacity from 5.4 to 2.7 effectively, you expect at least 90-95%, 95% of production in second half action. For the new build-out 10 gigawatt capacity in H2, since the ramp-up will happen over 3 to 6 months of time, we can expect some bit of number from that capacity as well.

Can you just give an indicator number for, let's assume for FY28, forget 27, and secondly, what is the total production increase you are estimating from existing capacity line which you are converting?

All right, for FI28, you know, we have entire 15.4 gigawatts cell capacity available for complete 12 months. The safe exemption could be to assume 85% utilization on the full year scale for FI28 on the cell capacity.

How much will you use for DCR and schemes like Kusum and Surreal are out of that?

Sir, our cell that we are going to manufacture largely is right now planned for the domestic markets only. So that means, not majority, in fact, almost 90-95% or maybe 98% shall be used for the local DC market only. Unless there are, like, we keep hearing now from Italy, Italy market, from French markets that the requirement of non-Chinese supply chains are coming a big way. If at all that also opens up, we may use something in those markets but too early to comment.

Entire, Europe market is open for replacement which has implemented between 2005 to 2010. So, is Europe market likely to fetch you a better price or domestic BCR? And second thing, the top-punk price and mono-punk price, what is the price differential as on today?

So, for us to see a comparison between European bargain and DCR market, right now the pricing in DCR market are fairly priced. In the European market, the orders are even coming for the full-stack solution, not just the panel. So, good news for us, a player like us, wherein we not just supply the panel, we give the entire EPC solution, transformers, T&D services. The number is very exciting. Let's say if we are constructing a solar farm in India with TND, if the cost is coming around 3.5 to 4 crores per megawatt, same set of plant in Europe would cost around 20 to 30 percent higher. So for us, the realizable value for same set of megawatts on an overall system basis is very high when we go outside of India, be it U.S. markets or be it European markets. That's why Y2.0 is very essential for us if we really wish to take out larger pie of the cake, which is there for next decade. And hence, all the segments which are going to set their assets starting H2 this year and big way in 528, we will really see numbers moving.

Can I assume that in FI28, first half will be lower number at 50-60% of the new capacity and second half would be at 80-90? On a blended basis, it would be at 80.

Sir, I think difficult to comment exact percentage, but you can reasonably expect that 15 gigawatts cell capacity will be used reasonably the next financial FI28. 28 gigawatt of module capacity, global capacity, including 4.2 in U.S. and another 24 gigawatt in Indian markets, will be used at full throttle. Some weight of base capacity, which is coming this year, 3.5 gigawatt, will be used for entire next financial year. 20,000 mW worth of transformer capacity will be consumed throughout next financial year. Electrolizer capacity of 1 gigawatt, yes, available for entire year. 4 gigawatts of inverter capacity, yes, available for entire year. In fact, on top of it, the EPC company, with an acquisition of transmission and distribution arm, APSL, will be also available to capture a good amount of share in the market of EPC in India and overseas as well. So, answer to you is... So, the answer to you will be, next year, FI28, WARI 2.0 will start showing its results, the compounding of assets that we are trying to create over years, and the impact of large-scale deep integration and penetration all working together to build a new WARI.

Do you, the current year which went by... Sorry to interrupt.

Sorry to interrupt. Mr. Chokhsi, may we request you to return to the question queue. There are participants waiting for the adjourn. Thank you. The next question is on the line of Abhishek Kansara from AXI Asset Management, Private Limited. Please go ahead.

Hi, good afternoon. Thank you for taking my question. So my question was, how much will be the model production from our US arm and how much will be the IRA rate that we have received this quarter? Whether this IRA debate is included in the revenue number or our other income number.

So, in the U.S. markets, the overall revenue in last financial year was 1 gigawatt plus, wherein around 85-90% was manufactured locally from our own factory. We have been getting IRA for 7 cents per watt peak against per watt peak of panels sold. There are some costs to incur when you convert that into cash. So, we factor around 87-88% only of the eligible IRA. So, last financial year, roughly around $40 million was our community benefit from IRA. However, this year when we start another 2.6 gigawatt facility in UOS, and the earlier line also runs at full throttle, the overall effect in IRA will be multifold naturally.

Thank you.

Thank you. Thank you. The next question is on the line of Rahul Rohit from Ambit Wealth. Please go ahead.

Hi, thanks for the opportunity. So, it would be really helpful if you could throw some light on ALMM2. There's a lot of ambiguity in terms of when will the ALMM2 demand actually kick in in India. So, you know, if you could give some on-ground reality on this, it would be really good.

Very difficult to answer with government also not able to answer so much. Speculations are going on, but I think within a week we will have a clarity from government.

I think the intent is absolutely clear that the government wants to transition to as much local manufacturing of cell, eventually ingot wafer, power electronics, everything. The question is about three months here and there and the timeline. If you see ALM1, ALMM1, now is successfully and fully implemented, adopted by the industry. Thank you. Self-manufacturing-related K&M2 is just about, you know, almost formalization. First June, it comes into effect.

Got it.

Thank you. The next question is from the line of Shweta Jain from Anandrati Shares and Stock Brokers Limited. Please go ahead.

Thank you for taking the question again. Just wanted to understand, in our erstwhile comments, you've mentioned that the higher commodity prices have now been started reflecting in our realizations as well. I wanted to know, the current order book obviously is at the last quarter's numbers or reflecting the price hike that we've taken to factor in these commodity prices?

Thanks for asking this question, Feta. I think I've tried to clarify in my earlier answer as well that the effect I started to see on the ground in terms of pricing conversion. However, there were not many intake of orders because of decisions on policy and clarity. Also, in the overseas market, because of the global tension, the intake was comparatively lower. So, yes, we can rightly assume that now all the existing pipeline, all the current order we are going to intake are going to factor in the price naturally.

So, that will be reflected…

I want to interrupt, Shweta. May we request that you return to the question queue? There are participants waiting for their turn.

Shweta, just to acknowledge the report that you released. I had very good industry insights, especially clarifying on the overcapacity issue, nuancing this high efficiency and areas. I think that was very well covered in your industry report.

Thank you, sir. The next question is on the line of Rajesh Kapadia from Raj Investments. Please go ahead.

Hello.

Yes, Rajesh.

Yes, sir. Thank you for taking my question and congratulations on good set of numbers.

Sir, this is question regarding our subsidiary Indosolar. Will you answer that question?

No. So, we would request that we can get that question right into the IR team of Endoselar. We shall get back to you over there. Okay. Okay. Thank you.

Thank you. The next question is on the line of Harshit Jain from POJC. Please go ahead.

Yes, sir. Sir, I am R1. Yes. Yes. Sir, that currently with the large KPEX announcement we have done across the new verticals, are these business expected to deliver high ROC and ROE with the current level, or should we expect some dilution at the company level as the scale-up?

In fact, in the earlier calls, in our presentations, we have tried to communicate this. That the decision-making for allocating capital by the board is vastly driven by the decision of return on the capital, which is a very essential metaphor. So, historically, we have seen the projects of ROCs and ROE to the tune of 20% to 25% have been approved. Same is the case with current projects also. So, you can reasonably expect to get delivery of similar set of return on capital. from the investors that we are making.

Sir, my second question is that, or will the...

Sorry to interrupt, Mr. Jain. May we request that you return to the question queue that are participating in the question.

Sure, ma'am.

Thank you, sir. The next question is in the line of Sarang Joglekar from Vimana Capital. Please go ahead.

Yeah, hi, thanks for the opportunity. I just want to understand the demand supply scenario in the non-DCR market. I mean, you've addressed this before, but just a clarification because now that ALCM is also there, some speculations on that getting deferred. Do you see any pressure in this non-DCR market now?

As covered in the other question, that yes, because of some speculations, some decisions, especially on the CNI and mid markets, are being deferred, basing the assumption that there could be some changeover in the timelines. But I think we should wait down and wait for the developments, the regulatory developments.

I understood, but do you see any supply pressure because of that? Any pricing competition?

So I think we're not clear about your question, but the mood promises that the entire market will move to DCR as soon as A&M 2 is instituted, right? And with respect to supply, cell supply, do you mean about that, that there's a shortage of volume?

No, I mean that if that is ALCM is deferred and there's already a lot of module supply, do you see a scenario where the smaller module players would be much more aggressive in pricing

to, you know, take advantage of that deferred period?

So you may expect some cases wherein the players who are in the race or mode of survival may even get down to any point of price. That can't be ignored. But fact here is, the buyers, the CNI, the utility, anyone, are looking for suppliers who are able to demonstrate warranty servicing over the next 30 years. So, someone struggling for survival, supplying at the cheapest price, majority of CNIs always take this precaution. In fact, the banking institutions also now have started to acknowledge the fact that they are funding those projects wherein the visibility of the OEM to continue catering the warranties for next 25 and 30 years is reasonably well. Going ahead, the maturity of financial markets, the banking fraternity, acknowledging more for large-scale quality suppliers who have ground performance track record. Bare minimum certifications, all in line of what has happened in the Western market, is something that we are waiting to watch for. And this is, I think this is going to reward those players who are continuing to perform, supply, and are also now able to do platform integration in line with the government's expectations of ELMM, 2, 3, and maybe many more to come. Got it. Thank you.

The next question is from the line of Akash Shirwaz, an individual investor. Please go ahead.

Thank you for the opportunity. Sir, actually, I want to know your view regarding green hydrogen. Sir, just want to know that whether, when green

hydrogen can become commercially viable on a large scale, and what scope do you see for the green hydrogen and its derivatives such as green ammonia and green methanol in coming years?

Thank you for asking this very relevant question in current context, wherein the entire Middle East market and the markets dependent for gas supplies on this particular chunk are waiting to see an alternate fall. The Indian market has started to see traction towards green hydrogen and ammonia and other derivatives out of it already. We are in discussion with many clients and customers who are asking us to commit supply of long-term contracts for hydrogen for their manufacturing capacities, those who are in the chemical sector, those who are in the steel plant manufacturing, and many more players. Similarly, there are discussions where the blending of hydrogen could be allowed in the gas system. So once the decisions by the regulators come in for blending of hydrogen and other localization of green ammonia in the urea, etc., I think there will be a gold rush towards getting hydrogen and green ammonia in-house in the country. Sir, one more question.

Sorry to interrupt, Mr. Shirwat, that was the last question we could take.

Sir, last question.

Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Jignesh Rathod for his closing comments.

One more point that. Bari has pivoted to multiple areas of growth consistently over the years. It was primarily a domestic company four or five years back or before, and then came the exports opportunity. And today we're talking about retail being such a large part of revenue and being a new additional gloat lever. We're talking about global manufacturing out of U.S. Being additional growth lever, we're talking about new business segments emerging. So I think given the challenges, which could be geopolitical, which could be supply chain, which could be domestic regulations, Wari has always found its way to scaling and finding new areas of growth. I think what Abhishek and Jignesh Wai alluded right in the beginning, no single channel, no single market, no single customer or business segment will dominate, and over time, it will de-risk both horizontally and vertically.

Thank you. Thank you all, ladies and gentlemen, for your time, your patient hearing, and your continuous trust in Wadi. It has been a pleasure to share with you yet another robust performance, and we remain confident in the growth opportunities that lies ahead. We are also excited to invite you to our Investor Day, an exclusive event where our leadership team will showcase our strategy in action across multiple business segments. The event is intended to provide deeper insight into our strategic priorities and the next phase of our growth journey. You can get in touch with our investor relations team for registration process. Thank you once again, and we look forward to speaking with you again next quarter.

Thank you, members of the management team. Ladies and gentlemen, on behalf of Wari Energy is Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.