Premier Energies Limited (PREMIERENE) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Premier Energies Limited Q4F526 earnings conference call hosted by ICASI Securities Limited. As a reminder, all participant 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 touchstone phone. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities Limited. Thank you, and over to you, sir.

Thank you, Rutuja. Good evening. On behalf of ICICI Securities, I welcome you all to the Q4 F526 Earnings Score of Premier Energies. Today, we have with us from the management, Mr. Chiranjusi Saluja, Managing Director. We will begin with the opening remarks on the management which will be followed by Q&A. Thank you and over to you, sir.

Thank you, Mohit.

Am I audible?

Yes, you are. Please go ahead.

So, good evening, everyone. Thank you for joining us today for our full year FY2026 earnings call. I am Chirinji Svaruja, Managing Director of Premier Energy, and I am joined today by my colleagues, Mr. N.K. Khandelwal Group CFO, Sudhir Reddy, Chief Strategy Officer and Director, and Vinay Roustagi, Chief Business Officer. I am delighted to share that the company has reported a record set of revenue and profit numbers. Our total revenue has increased by 20.7% year-on-year to $8,026 crores. The profitability margins have held steady. Operation EBITDA margin is reported at 30.4% and PATH margin at 18.8%. Thank you. Our path has jumped 61.1% year-on-year to 1,510 crores. The most pleasing thing about these numbers is that they have been achieved in a challenging overall environment with increase in several commodity prices and freight prices. Amongst key business updates, we recently completed construction of our 5.6 gigawatt Module Plant at Sitarampur in Telangana. This is one of the largest and most automated module plants in India and is expected to achieve full ramp-up in the next two months. In the last few months, we launched two new products, ZeroBuzzbar cells and all-black modules, responding to an evolving market. These two products, the requirements are showing. Our strong technical expertise, these innovations are already receiving great market acceptance. Our manufacturing plants continue to run at near-peak capacity utilizations, and our top cone cell line, which was commissioned in June 2025, was stabilized in record time and is now running at 90% plus levels. Our proposed acquisition of 51% stake in Transcom is complete. Transcom has reported excellent results with annual revenue and PAT of 423 and 45 crores, respectively. EBITDA and PAT margins have jumped sharply over previous years to 19.1 and 10.6%, respectively. The company is now embarking on major growth trajectory with total capacity. Set to increase nearly seven-fold to 16.75 GBA by July 2026 with focus on more lucrative HV and EHV segments. As we look forward to the new year, the environment around us is becoming ever more unpredictable. But our investments in scale, technology, people, and supplier relationships built over a 30-year operating platform are paying off in building a resilient business with profitable growth. The Middle East crisis is turning into a moment for renewables as all stakeholders look to rethink energy mix and reduce consumption of fossil fuels. We believe this is going to provide a major boost to long-term demand for the sector. We are already seeing strong demand traction across all segments. New installations in FY26 grew to almost 45 gigawatt in AC terms, a fantastic 87% growth over FY25, with estimated total module demand of close to 60 gigawatt. The moment. The momentum is expected to carry through into the current year, and I emphasize, notwithstanding concerns around tendering slowdown and transmission delays. This is reflected in our growth order book, which currently stands at 14,010 crores, up 66% year-on-year. We are trying to capitalize on the booming solar opportunity with an expanded module capacity of 11.1 gigawatt and cell capacity going up to 10.6 gigawatt shortly. These capacities make us one of India's largest and most integrated cell and module manufacturers. F5-27 is a year of large capex for us at 5,100 crores to be deployed across cells, ingot wafers, batteries, and inverters, helping us to transform our business with a diversified portfolio of clean energy equipment. At the same time, a major endeavor of the company is to leverage AI and digital technologies, automate day-to-day tasks. Exploit process efficiency and boost productivity to stay competitive in an evolving marketplace. With all these initiatives, we hope to maintain our leadership position as the lowest cost producer of best-in-class products for the foreseeable future. Thank you. We are now open for questions.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

The first question is from the line of Praveen Sahai from Prabhadas Leeladar.

Please go ahead.

Yeah, thank you for opportunity and many congratulations for a good set of numbers. My first question is related to the module. If you can clarify like the total, you know, Q4, the DCR module volume as a percentage of a total volume has sequentially decreased, doubled. Because if I look at the DCR website, it's showing that the production of the DCR module for you has been doubled on the sequential basis. So as the case for you, can you clarify that?

So, in the last quarterly call, also we had said that the DCR website is more a verification portal for traceability and for DCR verification. It is not a portal to, you know, arrive at numbers of sales of modular sales. So, the number there would not be an accurate number.

Yeah, may I, you know, just to add to that, Prabhu. Sorry, you know, our sales mix between selling sales and DCR modules, it changes on a quarter-to-quarter basis, and we have an order book comprising both – hello, can you hear us? And our sale order book comprises both sales, DCR modules and non-DCR modules, but I don't think you should read too much into the quarterly changes in this mix.

Okay. Second on the cell realization or the external cell revenue, if you can give us some indication that sequentially how it is stepping because you have a higher order of a cell now in the order book. So how the realization is stepping up on the sequential basis?

So, in terms of the sell market, you know, the sell market overall still continues to be favorable. The pricing has been quite stable at between 35.5 to 14 odd cents, and we don't see any change in pricing in the current environment.

OK, thank you, sir. That's it.

Thank you. The next question is from the line of Aditya Vikram from DB Securities. Please go ahead.

So, hi, sir. Two quick questions. First of all, there is a significant increase in purchase of stocks. Could you clarify why is that the case? Because it's approximately four times of last year. Is that helping us with the launchers?

So, hi. The stock going up is a planned move by us looking at the supply chain situation and also the new 5.6 gigawatt of module line, which has got commissioned, which also, you know, requires more stock to be purchased for the module line. So, it's well in line with our plan. There is no major increase.

Okay, and there is also a net debt increase of approximately $660. Why is that?

Well, you know, that is inevitable because we are embarking on a large CAPEX program. You know, our total CAPEX for the cell line of 7 gigawatt alone is about 3,000 crores. And then in addition to that, we have already started work on our input wafer project and separately on other projects, including aluminum line, aluminum frames, battery storage, and, of course, transformers as well. So I think you will see, as we have previously said, We have about a 12,000 crore-Ruby CapEx plan spread over three years starting F526, and as the CapEx goes up, we're funding it through a mix of internment accruals and debt, and the debt level will inevitably go up as well. We are obviously – sorry, please go on.

Yeah, sorry, just to add there, I know you have clarified this on English as well, but what is the debt-to-equity ratio which you are looking at for targeting? Sorry, please repeat that question. So, what is the debt-to-equity, considering all the expansions which are in place and which we are planning as a company, what is the debt-to-equity ratio you're looking at in next one or two years?

So, through this CapEx cycle, you know, our endeavor is to maintain our A plus rating, and we want to maintain the debt to equity ratio at about 1, and debt to EBITDA ratio at about 1.5 or below.

Okay. And last and final thing, so we have somehow sustained margin when other peers in the same group are not able to because of copper prices, silver prices increase. It clearly looks like at this time, but the in-stock trades have hit us, right? How are you seeing the margin? Traditionally, in this upcoming quarter, again, silver prices and copper prices have started going up, and there is all the more escalations and everything which is happening. So how do you see this sustaining at this level?

Yeah, I mean, you know, we can't give up, give you any guidance on margin. We don't, as a company, we don't give any futuristic, we don't make any futuristic statements. But, you know, a current order book is priced at levels which are consistent with what we saw in the last year. Yes, some costs are going up, but at the same time, we are also doing a lot of work behind the scenes to be able to reduce the cost and improve the efficiencies in the overall business. We also need to, you know, understand that the scale of the business has grown by almost two times in the last one year and is going to grow by something like two to three times over the next year as all the new plants come online and the production kind of picks up. So the result of this is we're building significant operating leverage in the business. It is going to give us the advantage of efficiency, introduction of the pitch cost base, the procurement costs should come down as scale goes up. So I think the result of all these things is that, yes, some costs are going up, but we believe that we are in a very good shape to be absorbed from all these cost increases and stay profitable. What happens to the exact margins obviously depends on a number of factors, many of which are outside of control.

So, just to add to what Vinay said, there is a favorable shift in the business. You know, there is more DCR modules coming up as the demand increases, plus there is a policy shift towards ALMM3, which is the advantage for leading players with strong balance sheets. So, as Vinay said, apart from this, our scale, procurement efficiencies, low cost base, we believe it will help us maintain industry-leading margins.

Okay. Thank you very much.

Thank you. The next question is from the line of Nidisha from ICSA Securities.

Please go ahead. Maybe please go ahead with a question. Your line is unmuted.

Hi. Thank you so much for taking my question. So, my first question is on exports. So, we've seen that exports have sort of, you know, never really been the focus for the company because of domestic demand. And now that the status on test plus the... The anti-dumping duties on India are very high. Are we looking to export to the U.S. at all by procuring cells from Africa or anything like that?

So, maybe we are looking at, if you look at our presentation, we feel there's a strong, you know, potential of, of course, to Europe and U.S. both. We are seeing that the demand in Europe will really pick up after the FDA is in place. And even for the U.S., we are looking at more on cell manufacturing. We had earlier announced our cell manufacturing plans in the U.S. And we are looking at it positively now because things have settled down, and we feel that there is still a good opportunity for exports, and we will look at the right opportunity to start exports to the U.S.

All right. And since ALMM2 is coming up, you know, applicability in June, when do we expect realistically that demand driven purely by ALMM2 should actually start picking up to grandfather projects?

So, yeah, you want to take the CLP and both are different projects.

Yeah. So, Nidhi, I mean, you know, when it comes to ALMM2, we need to understand that there are various market segments with different rules applying to them in terms of application of ALMM2. The private market, both rooftop and open access projects for C&I customers, ALMM2 becomes applicable from June 1, and the demand is expected to come online, to come to the market immediately, and that, by the way, is a very substantial demand because now the C&I segment is almost equal in size to the utility scale segment. So, we expect from June 1 onwards, the entire market, entire solar sector, except for utility scale segment, will shift towards the LMM2 or domestic sales. And then when it comes to the utility scale market, the demand is going to come, I would say, towards the end of FI 28 and, you know, 29 onwards, because, you know, there are all these old projects which have been auctioned before September 25. They have been grandfathered, and they can still use imported sales. But if you look at the overall market demand mix, you know, if you look at what we did in the last year out of 45 gigawatts, 30 gigawatts. Including Rooftop, Kusum, and CNI is switching on to the domestic sales right now, and only 15 gigawatts will be remaining for the utility-scale market for FY28 and beyond. So a bulk of the market shifts to domestic sales immediately now.

All right. My last question would be on KFOLER. So, the company recently announced that we will not be acquiring KFOLER anymore. So, could you let us know why that was? Firstly, and second, do we have other companies in mind for inorganic growth, or is there something now that we're looking to build this piece on our own?

Yeah, so, you know, in terms of K-SOLER, look, this was a non-binding term sheet at that time, and the final documentation still had to be completed. Obviously, there's a very comprehensive set of documents for any transaction of this kind, and unfortunately, we could not find an agreement on some of these terms and conditions in the set of documents. I think that is the reason why the transaction could not be completed. In terms of our future plans, we remain totally committed to the inverter business and indeed are working right now to expedite our plans. We are looking at our strategic options in terms of JV partner. We have a proposed JV with Sermes GS, and, you know, that JV remains the first preference. And we are looking at other strategic options as well, and we will finalize this over the next few months.

All right.

Thank you so much.

Thank you. The next question is from the line of Kunal Shah from Dam Capital. Please go ahead.

Yeah, sir. Congratulations on a very good side of numbers, first of all. So firstly, you know, we've been able to maintain our gross margins at a stable level, which is most of our peers seeing a very sharp decline, right, in that sense. Could you just throw some insights on our execution and how are we managing this cost inflation, which is ongoing?

So, Kunal, I think one of the, you know, significant thing which you see is the utilizations of our cell lines. So, we have been able to ramp up and utilize our cell lines at optimum level, and that is one of the key reasons that we've been able to have the right DCR mix. Do you want to add something with that?

No, I think, Kunal, you know, this is a question we already tried to answer earlier. Yes, there's been an increase in some of the costs. But as the scale of the business goes up, we are also seeing a significant amount of operating leverage and efficiency coming into the business. We are actually doing a lot of work to optimize our operations, increase automation, use all the digital technologies, et cetera, to reduce our cost base. And I think what you see in terms of the results is basically a mix of Some of these costs going up, but us being able to reduce costs on some of the other areas of operations, helping us to maintain our margins.

Understood. Just to follow up on this now, given, like, the 7 gigawatt line is going to come on same anytime soon, right, in the next three, four months now, do you see, like, as you ramp up the line, these cost optimization will continue, and if you can just quantify that, and second, on the 7 gigawatt line, would there be, like, a front-ended CAPEX wherein you can do further ground field at a lower cost, and what would be the optionality of that CAPEX?

Yeah, yeah, sure. So, I think, I mean, definitely, you know, seven gigawatts is basically double our current capacity, all in a single line, single site. So, there will definitely be many more efficiencies coming into the business. Just to give you an idea, you know, we currently have four different module plants spread across Fab City, and the new Citarampus plant that we've just commenced operations in uses 40% less manpower on a per megawatt basis. So, you know, that is the kind of advantage that we're seeing in reducing our cost base. In relation to, you know, a potential for brownfields, yes. I mean, I think that is definitely a real possibility for us. We have the land and the additional infrastructure available for doing an almost parallel 7 gigawatt new cell line. With a CapEx cost efficiency of as much as 30 to 40%. So, you know, bearing in mind that our CapEx for the first 7 gigawatt line is already at about 35% lower than the industry benchmark, that gives us a major advantage in terms of cost and in an ability to scale up and build this line in a very quick time, assuming that the demand takes off.

I understood. This is very helpful, sir. Secondly, in terms of the existing order book of 14,000 odd crores, how should we think of the execution timelines of the same, like the conversion to revenue on this? And, sir, a follow-up here would be what, I mean, we know that you don't give a precise guidance, but the F26 order inflows have been extremely strong for the company. Are we confident to grow on the order influence for 27 as well? Are you seeing that market shaping up in that sense?

Yeah, so Kunal, the execution of the order book, most of this will happen in FY27. I can't give you an exact number, but it will be, I would say, more than two-thirds. And in relation to new order intake for the year, I think like we have said earlier, you know, there is a very strong demand momentum in the sector. And, in fact, we are going to see a surge in particularly, I would say, DCR order intake as we go forward because a large part of the market has been sitting on placing new orders in anticipation of hoping for an ALMM2 extension. But, you know, we believe that the policy is here to stay and there will be no further extension. As in when, you know, we approach June 1 and that kind of decision line becomes clear, we will see, I would say, a big rush for orders. And I think, you know, FI27 should be equally good for the order intake for us and for the industry.

Understood. Thirdly, sir, on the resolution, fund raising resolution for this 5,000 crores, now, could you just help with the rationale for the same, and how are we contemplating on the potential capital allocation here? Like, what are the areas that we might be thinking about?

So, this was an enabling resolution. We had taken this approval from our board. There is no plan for any QIB or fundraise immediately. As I told you, we're looking at opportunities in Europe and U.S. As and when we see that there is an opportunity and we need to do a fundraise, we will, of course, intimate. As if not, there are no plans. It was just an enabling resolution.

Understood. And last one, bookkeeping, there's this sharp increase of inventory. I mean, you're working capital getting blocked. Now, could you help, like, is it because, like, we're building up the stock ahead of the module line coming up? Like, could you explain the question?

It's for two reasons. One is building up stock ahead of the module line, and also because of the Middle East crisis that we have stocked up, you know, we planned this inventory levels and stocked up from it later.

Understood. This is extremely helpful, sir. All the best for the future, and I'll fall back in the queue. Thank you. Thank you.

The next question is from the line of Naman Jens from Kodak Institutional Equities. Please go ahead.

Hello. Can I order this? Yes, Naman. Yes, Naman.

Yeah, my question is primarily on the best business since it's... The future is solar plus BES and there have been multiple reports that the government is going to push for a 50% plus localization in BES going forward, right? So seems like more of an ALMM moment for modules. So, why, and since, you know, the CAPEX intensity is really low, especially for containerized best solution where we are not doing sales anymore, why are we not pushing for a, let's say, 12 gigawatt hour capacity by March 2027 itself? Because, you know, given the asset terms going to be very high, you might be, you might, you know, be one of the earlier players in the field and make up, you know, most of the profitability in this space. And if I'd run here, too.

Yes, sir. So, I mean, I think, Naman, you would have noted if you're following the government announcements and the likelihood of the policy, any localization roadmap is likely to become effective only by around FY28 or so. And as we speak, you know, there is, you know, the industry is primarily basically relying on imports from China on which there is no constraint right now. And the duty level also remains quite low at about 11%. So I think over the next one to two years, we will still continue to see a big portion of the demand being met from imports. And that is why we've decided to basically face our capacity addition program for this business.

And secondly, since, you know, we have been able to create sort of a capability where we can expand cell capacity quickly and as well as at a lower capacity, how sure are we in achieving the seven gigawatt capacities as in it sort of indicates that we'll be able to do it in the half year, which will probably make you the largest player in cell.

Right. So do we see any delays or it's sort of like

we really believe that it's going to happen? And what's your expected timeline for stabilization after that?

So, you know, I said the same thing in our last earnings call that it's on track, and if you look at our presentation, the 7 gigawatt plant, 4.8 June and 2.2 September is on track. It takes four to six months for stabilizing these lines, and as we speak, everything is on track. We don't see any significant delays.

Got it. That's what I'm going to say.

Thank you. Thank you. The next question is from the line of Abhishek Nigam from Motila Losval. Please go ahead.

Yeah, thank you so much for the opportunity and you know congratulations on a very good result despite all the volatility. Just on in the presentation, you know there is one slide on global opportunity. So, I was just wondering if you are able to give a little more details in terms of specifically is there something that you are looking for either in module, cell, battery. Any specific geographies that you prefer over others? So, any thoughts over there? That's my first question.

So, on solar cells, we had announced our JV with Helene. We had put it on a pause. We have re-initiated discussions now. We have also started looking for sites. So, we are serious on our U.S. solar cell plans. In Europe, we are seeing a great opportunity. The demand is about 80 gigawatts per annum. There's also a mandate in the EU for solar cells, for inverters. So we are evaluating all these opportunities, and as of when we are close to finalizing, we would update the markets.

Okay. Okay. Fair enough. I understand. And second, on the battery side, so, you know, everybody is doing CAPEX. I see you are doing CAPEX and VARI is doing and others who are also in the frame. So, markets have expected a localization policy for a while, but, you know, of late, there has not been much from the government or from the ministry. So, is there anything you want to, you know, update us on what is happening over there? And if you expect a localization policy, could it be, you know, first half this year, second half this year? Anything you have over there?

Yeah, sure, Abhishek. So, you know, we feel that the government is completely committed. To local manufacturing for batteries. In fact, batteries and all the other clean energy equipment, be it wind turbines, you know, electrolyzers and all the other pieces of equipment over a period of time. With batteries, I think the government has been slightly conservative given that it's a nascent market and there is a lot. And there is a large need for batteries in the short run. There's more than 50 gigawatt hours of options which have been completed, which have been done at very, very competitive prices. Also, you know, given what the government and the market experience has been for ALMM, for solar, the government is planning to give about a two-year timeline to the industry to prepare itself. We feel the government is very committed to this. They've already held industry consultations, and the thought process is very, very consistent with what we have seen in ALMM2 and ALMM3. And we would expect the policy to be announced. I mean, you know, it's very difficult to give exact indicators for government initiatives, but, you know, it could be announced any time over the next three to four months.

Okay, okay. That's very useful. Thank you so much. I'll come back in the queue. Thanks, Avishak.

Thank you. The next question is from the line of Ketan Jens from Evendus Park. Please go ahead.

Thank you. Good evening, sir. Congratulations on a very good set of numbers. I just had a follow-up question from previous participants. I understand we've been able to retain our margins, and it's really appreciable. But how has the price cost moved from January till now? The bill of materials for modules, how has it moved in terms of stamps for what?

So, you're talking about DCR modules or you're talking about non-DCR modules?

Both, both, sir. Just the bill of materials, how has it decreased, how has the cost increased?

Yeah, on non-DCR modules, we have seen sell prices rising in China. They have gone up from three and a half cents level to almost six, 6.2 cents. So it's like almost 80, 90% increase on sales. But since it's a pass-through to the customers, module prices would go up in line with China prices. And if you talk of DCR modules, because of scale, efficiencies, and, you know, the mix, which is changing, so we have been able to maintain our margins, and we are quite confident that, you know, going forward, long-term margin trends should be stable, and likely even better, because the mix is changing. What you need to understand is that the non-DCR modules are gradually going to be phasing out, and more of a made-in-India DCR mix is going to be brought in as the IPPs also start buying DCR modules. And we are quite confident at the scale and procurement efficiency, we will be able to maintain healthy margins.

Is there any increase in the bill of material as well, apart from sales, in the costing?

So, for glass, there has been no increase because of the minimum import price. For aluminium, we have seen around 11% of the module cost is aluminium. There has been slight increase, but again, with design changes and frame size optimization, we have been able to mitigate those increase of aluminium. So, it's not been significant.

Understood. So, as you mentioned, there have been a healthy sales mix. I think around FI25, we would have had around 60% of non-DCR and around 40% of DCR. Do we maintain the same for FI26? Did we have the same mix?

So, we never gave the FI25 numbers, but going forward, I can give you an indication that every quarter, DCR mix is going to increase.

Okay. Okay. Understood, sir. Thank you, and all the best. I'll get back to the blue.

Thank you. The next question is from the line of Prakhar Porwal from Ambit Capital. Please go ahead.

Thank you, sir, for the opportunity. One question, again, a follow-up to the previous participants' question. We talked on DCR, non-DCR models. On sales, in the last call, you mentioned two levels of cost saving. One is silver reduction in your solar cells, and second is hedging that we do for six months. So, when first question is on hedging, what is the policy right now? Because given since last six months, silver prices remain elevated. So, is the cost increasing on that strength? Second, given you filed on the BAC as well about zero buzzword sales, so maybe there's some clarity, what could be approximate production in silver consumption, because of that, because we have not heard of zero buzzword from anyone, and any breakthroughs that globally you are seeing in terms of reducing silver, which maybe we can also do in coming quarters.

Yes, hi, Krakal. So, you know, on Silver, we had extensive discussions in the last call also. And, you know, we maintain sufficient stock at any given point of time and obviously also undertake hedging, as we said last time. The other thing what we have started doing now is that we have started passing the silver cost risk to our customers in all the new orders that we are signing. So, as a result of, you know, all these initiatives, we are not affected by silver cost increases going forward, I would say. Second, you know, in terms of you mentioned about the potential for reduction of silver usage in our production. So, the zero bus bar modules or sales, they use lower silver by as much as about 10% reduction in silver. And we believe that, you know, and longer term, we have got a lot of other initiatives, again, as we discussed last time also, including a potentially a complete replacement. of silver with copper paste or even aluminum paste. That, I would say, broadly is about 1.5 to 2 years away. But in the meanwhile, we are working on a comprehensive program, including reducing the silver consumption, hedging, and passing the cost to our consumers.

Sure, that is very helpful. Second, a question is on the order book. If I look at the order book makes 60% of cells and 40% models, very rough calculation, maybe for this around four, four and a half gigawatt of module order book. So my question is, given we'll have 11 gigawatt order of module capacity, largely for the entire year. So will that mean reduction in utilization levels and how to look at that? That is one. And second is given it is a very big sale order book. So does this mean that we're selling to players who are more dominant in the retail category where we don't have that dominance right now? And so what are we doing exactly to increase our presence there? Those are the questions.

So, just to clarify on the spell order book, substantial portion of the order book also goes into F528, so it's not in F527 itself. These are contracts with model manufacturers whom you will be supplying sales next year also. In terms of module utilization, we are, you know, at almost about 11 gigawatts, taking a 75% kind of utilization, that's about seven, seven and a half gigawatt. And then module orders, we also need some, you know, potential possibilities of getting orders in every quarter. So these are orders which are in the order book, which are long-term orders, whereas every quarter, there's an order book which also comes up.

So, you know, just to add to that, you know, I'll again point to, you know, if you look at the makeup of the market, almost half of the market is basically coming from the rooftop and the C&I segments. The rooftop segment shows up in our order book because those are mainly cash and carry orders, and they're booked on a daily, weekly, monthly basis. And the C&I market, which is basically estimated at about 15 gigawatts, the ALMM2 is becoming applicable now. And with that, I think we are likely to see a surge in order placement by these customers. So, in general, we are very, very optimistic that we will see the order pipeline is already very healthy, And we will see a large... A surge in order booking by customers, which will basically allow us to also fulfill our production capacity.

So, just one clarification to the rooftop segment that you created to write it through the cash and carry distributed model A. That's right, yes. Okay. Thank you so much and all the best for the coming quarters. Thank you.

Thank you. Thank you. The next question is from the line of Aditya Vikram from DB Securities. Please go ahead.

No, all my questions weren't answered. Thanks very much.

Thank you. The next question is from the line of Kunal Shah from Dam Capital. Please go ahead.

Yeah, thanks for the follow-up. Sir, on the cell technology, now we've been much ahead of the industry. So you were among the first to introduce the G12R cells and now zero buzz bar as well. So what is the efficiency level in the zero buzz bar? How is it getting received by the customers? What feedback are you getting? And what were the timelines for achieving the 25.8% that we had sort of highlighted? All right, let's answer this question.

I think on the efficiency front, it is going to be about 0.1 to 0.15% higher efficiency. This is basically due to higher exposure area, but in the zero bus bar, but that said, it has other advantages with respect to more robustness to shading and micro cracks. That's the main advantage with respect to zero bus bar.

The other question was on when will we reach 25.8% efficiency?

We are currently at an average efficiency in the top-con line at about 25.5. Now that we are getting a sterilized line with a 90% utilization, we expect to move forward gradually over the next few months one step at a time. I would say at least it will take us a couple of more quarters to get to that kind of efficiency levels.

Understood. This is helpful. And so just to follow up here now, from here on, like, how do you see this efficiency curve panning out? Like, what are the further tech upgradations or improvements that we are working upon, you know, which has already worked in China? And if we just provide some insights over there.

See, I think currently, you see the efficiency trends in China. They are on a mass production. It's still hovering around 25.6 to 25.8, even for the A-grade ones. What you see, these announcements around 26 and all are more for the champion cells and not the mass production cell efficiencies. With the top-con technology, you hit a bar somewhere around 26% to 26.1%. Beyond that, efficiency improvement just at the top-con cell is not possible. It will need more innovations, more into tandem cell technology, back contact, and all these kind of newer technologies, which will take some more time to mature on a mass production scale. I think at least a couple of more years from two to three years, at least from seeing mass-produced tandem modules.

Got it. Got it. This is very helpful, sir. Second, in terms of the backward integrations, we've talked about aluminum frames. Are there any other verticals also that we're looking or contemplating upon in terms of insourcing of raw materials or anything of that sort?

See, Kunal, I think, you know, that remains a watching piece for us. You know, we have to wait and see how the government policy evolves. We know that the government is quite keen to start getting all these components also made in India. But what is the exact policy and what are the timelines? We will have to kind of wait to see how that shifts up, and accordingly, we will decide what is best for the business.

Got it. And so now, lastly, on Transformers, like, it's a bit untouched now with respect to the upcoming 10GV capacity. Could you just give some, like, how do the milestones look like here in terms of getting the required certification? And especially because it's an HEHE segment, how are we progressing on the talent acquisition as well? Thank you.

Yeah, sure. So, Kunal, in terms of milestones, this plant is due for completion in July this year. And the good thing is that because of the strong management team in place, and the fact that the company already has existing production facilities, they have already started, you know, producing some of the larger transformers and doing type testing and certification work, which can take as long as 6 to 12 months. So I think the company is making very steady progress on that. In terms of management team, you know, there is already a strong management team as we have shown in our previous presentations, which is ex-Toshiba and some of the other majors in the electrical goods industry. And we believe that the company is already secured amongst their first order. So, you know, it will take about two years for the company to fully ramp up their operations, but they are well on track to beginning commercial production and achieving certification in this timeline.

Understood. Is there clarification from which client have you got the order from?

If you can see, unfortunately, I can't give you the client name, Kunal.

Understood. This is very helpful, sir. Thank you so much. Thank you.

Thank you. The next question is from the line of Anitra Ganaji from Nomura. Please go ahead.

Yeah, hi, thank you for taking my question and congratulations for a very good set of numbers. I just wanted to ask one bookkeeping question. So on slide number 22, the sales that you have mentioned is 21,751 million, whereas in the reported financial sales, the sales number is 22,303, the revenue from operations. I just wanted to understand why the difference.

Yeah, sure. So what you see on this slide, Aritra, is only the cell and module sales because this order book is only for cells and modules. But in addition to this, we obviously have the projects and the EPC business. So the rest of the revenue is coming from that line, which is not showing here.

Okay, sir. Understood. And another question I wanted to ask was, you know, sequentially the share of modules in the revenue has gone up, but still like the overall margin is stable. So I understand like the BCR share in the module revenue has also gone up, but typically like cells have a sharper margin profile than BCR module business as well. So, going forward, even if the sales share in the revenue comes down, are the margins still expected to remain same? Or, in other words, are like leasing a module business revenue and sales business revenue margins the same? Could you please share some color on that?

So, you know, I think unfortunately we can't predict the future and we can't say how the margins are going to play out in future. But you can see what is the current shape of our order book. And we have said earlier that the order book pricing is consistent with what we have seen over the last 6 to 12 months. So, you know, that gives us a good visibility in terms of the volumes as well as pricing and margins. But going forward, the mix is only going to become more favorable wherein the DCR share is going to grow at the cost of the non-DCR market, which is a much lower margin market. So overall, I think the margin outlook for the business is likely to be favorable going into the future.

Understood, sir. And just one last question regarding the A11 risk to implementation. So, hypothetically speaking, if it doesn't get implemented, let's say, June 2022, or it gets delayed by some months, so is there any risk of some of the orders in our current order book getting cancelled going forward, or is that not a material risk?

No, it's not a real risk because one of the orders in our order book are, you know, from the C&I segments which have deliveries in the next two or three months. So if you look at what business is going to come up from first June, it is going to be the C&I business which will immediately move into the DCR mix. And most of these C&I developers have finished or have completed their installations with the first June deadline. So, the orders in our order book from that segment are post-October-November. So, even if the DCR or the implementation gets delayed by a quarter, it would not affect any of our orders, and we don't see any material risk there.

Thank you, Mr. Sir. Thanks for the answers and all of us for the upcoming quarters.

Thank you.

Thank you. Participants who wishes to ask a question may press star and 1.

As there are no further questions from participants, I

now hand the conference over to management for closing comments.

Yeah, thank you. So, thank you, everyone, for your time. I appreciate it. It's a Friday evening. You know, just to conclude the call and how we see the business. See, there is a lot of noise in the market in relation to demand slowdown, strong competition, cost and margin pressures, et cetera. We believe that our performance over the last year has been a very strong validation of the company's overall business strategy, management competence, and execution. In general, we are very, very positive on the growth outlook for the sector, given all the initiatives by the government. And we are now, in fact, beginning to think. Beyond the current plans and looking to next stage of growth in terms of products, technologies, and geographies, we are grateful for your support and look forward to working with you. Thank you very much.

Thank you, ladies and gentlemen, on behalf of ICSA Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.