Operator
Ladies and gentlemen, good day and welcome to Q2 and H1 FY27 Earnings Conference Call of Solar World Energy Solutions 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 touch-tone phone. Please note that this call is being recorded. I now hand the conference over to Ms. Sakshi Mehta from MUFG. Thank you and over to you.
Thank you. Hello, everyone. Welcome to Q2FY27 Earnings Call of Solar World Energy Solutions Limited. From the management today, we have Mr. Karthik Teddiya, Chairman and Managing Director, Mr. Mukurt Goyal, Chief Financial Officer. And we must remind you that the discussion on today's call may include certain forward-looking statements that may involve known and unknown risks, uncertainties, and other factors. I must therefore be viewed in conjunction with the risks the company faces. Future results, performance, or achievements may differ significantly from what is expressed and implied by such forward-looking statements. Now, I hand over the call to the management for opening remarks. Thank you, and over to you, sir.
Good evening, everyone, and thank you for joining us today. I am Karthik Eltia, Managing Director, SolarWorld. On behalf of SolarWorld, I extend a warm welcome to all the participants on our Q2 earnings call. I hope you have had the opportunity to review our financial results and investor presentation. The renewable energy sector in India is undergoing a meaningful transition. The opportunity is no longer limited to installing solar capacity. It is increasingly about creating an ecosystem that can generate, store, and deliver power reliably. This is changing the nature of opportunities available to companies across the sector. At Tolerworld, we have been preparing for this transition by expanding beyond our traditional EPC capabilities and building a presence across manufacturing and energy storage. What is particularly important for us now is that these investments are beginning to take shape alongside a growing project portfolio. Our focus is shifting towards building these capabilities together and translating them into business performance. Our priority is to improve the quality of execution, manage project-level costs, and strengthen operating efficiencies as the business scales. We remain focused on ensuring that growth in activity is accompanied by a corresponding improvement in financial performance. One of the strongest indicators of our business momentum is the evolution of our order book. As on October 31, 2026, our consolidated order book stood at 3,856 crores. Solar ETC and ONM accounted for 2,718 crores, while best ETC contributed to about 1,138 crores, representing almost 30% of the total order book. This is a meaningful development for the company. Energy storage is no longer just an area of strategic interest. It is now a business segment supported by secure projects and an active execution pipeline. We have best orders aggregating 582 megawatt AC and about 1.3 megawatt hours from 1.3 gigawatt hours DC from customers including RR, UVNL, GVNL, and NTPC. This gives us an opportunity to build execution experience in a segment that is becoming increasingly important to India's power infrastructure. Our fully automated best manufacturing facility has been commissioned, marking an important milestone in strengthening our energy storage manufacturing capabilities. Equipped with advanced automation, KUKA Robotics, the facility provides with an integrated platform to support our best ETC requirements and cater to external customers. Approximately one gigawatt of its manufacturing capacity is covered by orders in hand. On the solar side, our 1.5 gigawatt module manufacturing facility is rookie's operational ALMM listed, while our 5 gigawatt junction box manufacturing line has also commenced operation. These developments have strengthened the manufacturing base established over the past year. Our next step in this journey is the 2.4 gigawatt solar cell manufacturing facility being developed through a joint venture at Narmadapuram, Madhya Pradesh. The project is targeted for commercial production in June 2027. The first tranche of equity contribution of approximately 26.8 crores was made on October 30th, 2026, following the quarter end. Once operational, the facility is intended to strengthen our backward integration by creating a domestic sourcing capability for an important component of solar module manufacturing. Taken together, these developments represent a change in the way we are building their business. We are moving towards a model in which project execution, manufacturing, and energy storage can reinforce one another. Our EPC business provides access to projects and customers. Manufacturing creates opportunity for greater supply chain control. And this expands our participation into the storage side of the energy transition. The opportunity ahead is therefore not simple. Not simply about increasing the number of projects we execute or the capacity we install. It is about the depth of our capabilities and creating stronger linkages between different parts of the business. As we move into the second half of the year, our attention will be on execution. We have a substantial portfolio of ongoing EPC projects secured with orders to deliver, a manufacturer lying ready for product launch, and the solar cell project progressing towards its targeted commissioning. Each of these require a different set of operational priorities, and we will remain focused on managing them with discipline. We are also conscious that scale must be supported by financial prudence. Project selection, cash flow management, working capital efficiency, and capital allocation will remain important considerations as we expand. Our objective is to build a business where growth is supported by sustainable operating economics and not just higher volumes. We believe SolarWorld has reached an important stage in its development. The capabilities and infrastructure established over the last few years provide a broader foundation for the company. The task ahead is to convert the foundation into consistent execution, stronger manufacturing contribution, and sustainable profitability. With this, I would like to hand over the call to Mr. Mukurt Goyal, our CFO, who will take you through the financial performance for the quarter and half-year end date, September 30, 2026. Thank you, everyone.
Thank you, sir. Hello, everyone. Good evening. I will now take you through the financial performance of the company. For the second quarter and the first half of Fx27, for quarter 2 Fx27, our revenue from operation is stood at 244 crores, compared to 137.9 crores in the corresponding quarter last year, registering a year-on-year growth of approximately 77%. Our EBITDA for the quarter is stood at 15.2 crores, compared to 18.1 crores in quarter 2 Fx26, with an EBITDA margin of 5.9%. Profit after tax stood at 4.2 crore as against 9.3 crore in the corresponding period last year. For half-year FY27, revenue from operations stood at 412 crore, suggesting a growth of approximately 100% over 206 crore in H1 FY26. Aventa for the first half stood at 35.8 crore with a margin of 8.3%, while profit after tax stood at 13.7 crore. On the balance sheet front, as of September 5th, 26th, the company's net was stood at 862 crores with a debt equity ratio of 0.46x. Going forward, our focus will remain on disciplined financial management, improving operational efficiency, strengthening cash flow generation, and maintaining capital efficiency as we scale our business. We remain committed to executing our order book effectively while building a sustainable. and financial resilient business. With this, I conclude my remarks on the financial performance. Thank you.
Operator
Should we begin with the question and answer session, sir?
Operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone 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. We'll take our first question from the line of Atul Mehra from Motilal Oswal Mutual Fund. Please go ahead.
Yeah, good evening, and thanks for the opportunity. So, firstly, can you guide us on the profitability roadmap ahead in the next 12 months, 2 years, 3 years? Like, how do you guys see the evolution from the profitability perspective?
Thank you, sir. Good evening. So, on the profitability, we have put up a slide on the presentation in terms of our margins likely to be impacted in the current year. As we say this, we are seeing a substantial improvement in the prices in the market. Copper has started to come down, aluminum is coming down. We are very hopeful that our FY28 should be a bumper year for solar world. We believe that our margin could significantly improve. There are a few reasons for that. First, the cost of raw materials are coming down, and the orders that we have won in this quarter at our higher prices compared to previous orders. So as costs come down, the margins on the solar ETC orders will go up. Two, we have added, made substantial investment in capital assets, that is module, solar cell line, and the best line. The best line is seeing a very significant uptick from both government and private developers. We believe next year, best line should contribute almost half of our top line and profitability. Third, our solar cell line is also expected to start operating from second quarter of next year, which will also add significant amount to the margin. So, we believe while FY27 margins will remain under strain, FY28 should be a bumper year for solar wind.
So, in terms of, you know, at the earlier calls at the time of IPO and so on, we are guided of 200 crores, 300 crores of profit. So, can you give us a revised guidance of net profit after tax for the next 12 months or next two years?
Sir, so, in the current year, we believe our top line should be somewhere between 16 to 1700 crores. And we are still targeting maybe like a 6-7% margin for the current year. For the next year, we should reach around 6,000 crores.
What does that translate to profit? Pat? Pat for the current year?
Pat of about 5-6% current year.
About 60 crores? About 80-90 crores.
80 to 90 crores for the current year. Yes, yes, for FY27. Next year, we are targeting, our target is to reach a top line of about 3,000 crores, and our pads should be in line of about 200 to 220 crores.
Got it. That is basically the current usability that we have.
Yes, yes. We have orders of about 3,800 crores in hand. We will execute almost another 1,100 to 1,200 crores of orders in the current year. 2,600 crores of orders will get passed on to the next year, on which this is a profit probability based on current pricing.
Right. Got it. So, second question is in terms of, you know, given how sharp the share price decline has been from the IPO price. What is the management, you know, thinking from the perspective that obviously the current profits are much lower than the earlier guidance, but the future, our future looks bright. So what is the management action from capital allocation perspective when it comes to, say, a share buyback or any other corporate action that we can take to improve shareholders in terms of wealth, because there has been a substantial shareholder loss by investing in the company so far. So, definitely, that has to be kind of, from a capital allocation perspective, if you can, you know, intervene through the right in terms of buyback or any other intervention to ensure that, you know, the shareholder wealth is restored. So, if you can talk a little bit more about how is the board and the management thinking about this particular aspect.
Thank you for that question. The board has taken the feedback very, very seriously. We are evaluating various options on how we can create value for our shareholders. So, there are some short-term actions that we are planning and evaluating in the board. On the long-term, the valuation will obviously come from showing better results. So, we will come back to the shareholders probably in the current quarter on what short-term actions we will take to create a shareholder value. Got it. Thank you, Emma.
Operator
Thank you. Next question is from the line of Rahul Jakob from Equventus. Go ahead.
Yeah, thank you for the opportunity. My first question is on the lines of the gross margin itself. If you could just share some light on the raw materials currently that are being used, definitely there's a slide that explains how these costs have currently ramped up in the last one year, which has been affecting. But if I calculate your cost of raw materials as a percent of sales, this is showing a dip from 75% to around 59-60%. So where is the gross margin going is what I'm trying to understand. You could just help me out there.
Sir, so if you look at how solar world operates, our revenue tends to be very, very heavy in the last two quarters. So, when you look on a year-to-year basis and when you see the next two quarters, you will see this cost of material will start coming around the same percentage levels that you saw last year. So, nothing really has changed because for revenue to grow and cost of material to go down, we have not gotten into the service sector and we have no other income other than that. In fact, I think by the end of the year, when these projects are on the brink of execution, you will see that cost of material will be almost approximately equal to the revenue from the same percentage of revenue from operations.
And is there any hedging or pass-on mechanism that is inbuilt in this model, in case spikes happen?
Sir, so we do hedge whatever forex we have outstanding in terms of LC for raw materials that are coming from outside India. In terms of copper, steel, and aluminum, there is not really much hedging we can do because we are not direct consumers of copper, steel, or aluminum. We buy processed goods. Let's say some of the biggest purchasers are transformers. So, our power transformers are copper-based, our IDTs are all aluminum-based, solar structures, this year we have mostly worked on tracker systems. These tracker systems were bought from Game Changers, which is an American company which is supplying through India and overseas. So, really, to be honest, on the raw material, there is not a lot of opportunity to hedge directly.
And it is not even being passed on currently, is my understanding.
So, in solar world, most of our revenue comes from PSU companies like NDPC, SJBN, SECI, which are some of the largest developers in India. Most of our tenders are fixed price contracts. So, every couple of years when there is a super cycle in metals, we do see a dip in our margins, which is happening this year. But having said that, all the orders that we win this year, and as prices ease over the years, we do show better than normal margins in the following years.
Okay, one final question was related to the BES as well. What kind of margins are we looking to make out here on an EBITDA and PAT level?
Sir, so BES, so I will give you a background on BES also. Sir, six months back, the lithium carbonate, battery-grade lithium carbonate was selling at around 200,000 yuan per ton, which has now substantially reduced and come down to about 90,000 yuan per ton. So the BES raw material prices have been very, very volatile. Our own forecast on what we can make on BES project has significantly improved over the last two to three months. We have two IPP projects in BES, one from GUV and one from RUV. We are targeting a minimum IRR of around 16% from those projects. The NDPC project that we have on BEST should also be substantially profitable, close to about, as we close in, should be around 10% PACT margin.
And are these also fixed contracts?
NDPC project is a fixed contract. The IPP project or obviously the selling price is fixed that we got in terms of the revenue that we will get per month. Cost, obviously, as it is going down, our IRRs are going up.
That's all for mine. Thank you. Thank you.
Operator
Thank you. Next question is from the liner Udit Sehgal from Pinpoint X Capital. Please go ahead.
Yeah. Good evening, sir. Good evening, sir. Could you throw some light on, you know, the whole base ecosystem? What is the size of the opportunity? What is happening? And how does solar world, you know, intend to capture it?
Yeah, so that's a very good question. So, in BES, currently, there are three types of markets that are there. First is the residential BES market. So, as everybody is aware that in India, very few cities have continuous power and most of the households do install an inverter system. So, now most of the residential inverter systems are moving from a lead-acid-based battery to a lithium-based battery because of the lower lifecycle cost. And more dependability. So that has become a very large market in India, which is being targeted by a few players. Second market is the CNI market. In the CNI market, there are also further two segments. People are looking to replace their generators with lithium backup for two to four hours. Second is the UPS market, where also lead-acid batteries are getting increasingly replaced by lithium batteries. Third is the utility scale, which is by far the largest segment, and India, I think, is one of the largest consumers of lithium batteries in this regard in the world. This market is... Going to be around 350 gigawatt hour, I think, over the next five to six years. So, that is a really big opportunity. How SolarWorld is placed in all this is, in the first residential segment, SolarWorld has recently launched its one, two, and five kilowatt hour battery packs. We are seeing very good inquiries, B2B and B2C both, on these products. Second is the CNI segment. We have already installed our first PNIM project for a restaurant, which was a 125 oblique to 61 kilowatt hour project, and we are getting repeat inquiries and a lot of new inquiries, so we feel this is going to be a major segment for us. In terms of utility scale, we already have in-house orders of about 300 containers. We are further discussing 200 to 300 containers for private developers. Single container cost would be close to about 3.2 crores. So at 600, we are targeting maybe around 600 containers in the next year. So this should, as I said, would form about 50% of our revenue. So it should be between 1,500 to 1,800 crores next year. Would it? Does that answer your question?
Yes, sir. And, sir, further in this... Like, this is what we're doing on the EPC side and the container side. Do we have any other plans, you know, to get into self-manufacturing or to further differentiate ourselves going ahead?
If you look at our presentation in the key highlights, we have mentioned that there are two segments that we are getting into. First is that we are going to increasingly look at data center EPC, which is a very high margin business, and we are already discussing with an overseas player for a joint venture for India. So, we are hoping to do that by the end of this year and start targeting Indian customers in the data center business. Secondly, the management is already evaluating a 2 gigawatt hour lithium-ion cell manufacturing facility in India. We had filed for the Oh, uh... The PLI scheme, but we have withdrawn that application because we feel it is going to become too overcrowded, and as you can see, there are almost 23 bidders for that PLI, and we feel that even without the PLI, this is a very good opportunity to invest into. But having said that, we are very cautious of the fact that China is imposing a lot of restrictions on the export of this technology and equipment both. So we are moving ahead in a cautious way and we hope to reach a conclusion maybe by end of this month or later by 15th of December.
Excellent. And sir, regarding our solar cell project, I mean, it's quite unique that a company of our size is going for such a big project. And as you mentioned, there is some restrictions from the Chinese side. So how do we differentiate ourselves on that side? And, you know, how can we ensure timely execution of that project?
Sir, so the good thing with us was from the start, we were not relying on most of the key equipment from China. So we were ordering equipment through a German manufacturer. So some of our risk got mitigated from that perspective. Having said that, there are still a couple of equipment that need to come from China, and we are also evaluating how to mitigate that risk. Uh, at present, uh, neither the suppliers or, uh, the buyers have any clarity on what is going to happen. Uh, the restrictions have not been imposed, but an approved pre-approval is currently required for export of any equipment. So, we are trying to expedite those equipment and get them out as quickly as possible.
And, and what would be the gap, uh, we are thinking, like, what could be the margins we could make on the solar cell project? Like, currently The margins are...
Sir, on the solar cell, I am not projecting as high margins as you are seeing currently. If you read our slides, what we have also mentioned is that there has been a significant slowdown in the EPC activity, and that is primarily driven by how many solar projects are being installed in India. So, and I feel the slowdown is going to remain for another 12 months till the grid connectivity and base projects, grid connectivity issues are resolved and a substantial number of base projects are installed so that the duck curve in the electricity consumption, which is basically very little consumption during the day and very high shortage in the evening is addressed. So, I would say with new capacity getting added and EPP or... Solar project remaining a little slow in the next 12 months. I would expect the margins will not sustain at these levels, but I would still say that margins will be upward of 15 to 20 percent.
Okay, sir. Thank you, and best of luck, and we hope that the coming year will be much better. Thank you. Thank you, sir. Thank you so much for your support, sir.
Operator
Thank you. Before we take the next question, we'd like to remind participants, to ask a question, please press star and one on your phone. Next question is from the line of Keshav Harlalka from BHH Securities. Please go ahead.
Operator
We can hear you. Please go ahead with your question, Keshav. Since there is no response, we'll move on to the next question from Kevin Gandhi from Cap Grow Capital. Please go ahead.
Hi, it's a good evening. Thanks for taking my question. Nice, nice. Yeah, hi, sir. So, I just wanted to know that I guess a few quarters earlier we had discussed that once we actually prepared this less IPP projects, we are actually going to turn around to buyers. So, are we still on that plan? Yeah, or actually we would use the revenue for our own company? Yeah.
Sir, so as you said, it is true that Solar World is an EPC company and we want to focus on remaining an EPC company. So when I say that IRRs are getting better and better as cost is coming down, so whenever we offload these projects, the premium that we will get will also be higher. The idea is still to upload these projects as and when we get an opportunity. At present, we are focusing on executing these projects, but we will definitely not hold them for the long term.
Okay, and actually one more question on the backward integration of the solar module and solar cell. So, just going on what the earlier, like, just wanted to understand that once this solar module and solar cell lines are operational, like, just wanted to know how much margin increase or how much cost savings are we actually estimating? Because, like, yeah.
Sir, so solar cell, in terms of solar module, I would say at present the business are not very profitable for anybody in India. Because you can see that there's about 200 gigawatt of capacity that has come in, and India is likely to execute somewhere around 50 gigawatts. So that kind of spreads the margin too thin because the computation has gone up significantly. In terms of solar cell, I think solar cells are currently available for around 12-12.5 rupees, while I would believe the manufacturing cost is around 6-6.5 rupees. So, there is almost like a 100% margin or a 50% margin and a 100% markup available on the cells. But I feel that this will also progressively start coming down as more capacities come in. I would project a 15, 18 to 20 percent margin going forward in this business. And that's a reasonable margin considering the cost that it incurred and the kind of complex operations that are done to convert a wafer into cell.
Okay, Salvatore. Thank you.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone. Next question is from the line of Parag Prakash Himdev from PH Financial. Please go ahead.
Hello, management team. Thank you for giving me the opportunity to speak. Sir, actually, I'm very confused by the disclosures and the actual performance made by the company. I would like to highlight a few things, sir. Number one, in the annual report, okay, wherein on the page number 35, with respect to raw material and cost inflation risk, wherein the price escalation of copper, electric equipment, and other ancillaries were discussed about, wherein the company's comment was, early procurement planning, contractual pass-through mechanism were feasible, And disciplined bid pricing. Now, for my understanding, I would like to understand from the management that the gross margin as well as the EBITDA margin has fallen drastically. In case if we are procuring early, when we are, you know, bidding month. When we were either bidding or maybe after the bid win, we were procuring. So such kind of volatility should not happen in the margins, A. B, on the revenue front also, last year you had indicated, sir, 15 net crores, wherein we had a bridge around 1376 crores. This year you had indicated 2000 crore and now we have again changed the goal post to 1600-1700 crore. And margin guidance was around 10.5%, which now we are speaking to 6% to 7%. So, in case if there is a pass-through mechanism, I am unable to understand. And now, in today's call, we are making a disclosure that it's a fixed pricing with most of the PSUs. So, why there is a change in the disclosure, what is made in the annual report, and what is being discussed on the con call? I fail to understand that. If you could please guide us on that, sir.
Sir, it's a very fair question. So, I would like to clarify a few things. So, the order that we are executing this year, we had become the L1 bidder for NTPC in October 2025. The actual LOA was only issued to us somewhere between February and March. So if you look at the disclosures of the company, you will see that the letter of award was only given after four to five months. The delay was on the part of NTBC. When we submit a bid, we have to keep the bid live for a period of about 180 days. So, we can start buying the raw material and reducing our risk only after LOA is given because if the board of NTPC decides not to issue an LOA, then that raw material cannot, we cannot be used by raw material anyway and we cannot get the drawings approved. So, once the, if you look at how the materials have moved, you will see that there was a very significant and very sudden movement in prices of raw materials including our exchange rate between October and January last year. So, in these particular contracts, it became very, very difficult for us to do a pre-procurement and to reduce our risk because LOAs were awarded at a later stage. So, I will give you an overview of how a contract works. We bid for a contract, we become L1. After we become L1, the NDPC, SJBN, NHPC will take this contract. To the board, wherein their board will approve. After their board approves, an LOA is issued to us. Once the LOA is issued, we can start submitting our drawings for approval. Once the drawing is approved, I can start procuring the raw material. What typically we have been doing in the past is, for us, solar panels used to be very, very volatile. So, first and foremost, we would get our structure and solar panels approved from the NDPC team, and we would procure them first to HRS. In the current year, we have not been able to do that because of the timing of the LOA and the change in the prices.
Sir, are you able to hear me? Yeah, I am able to hear you. I understand that, sir.
And second, sir, on the pass-through, sir, these are public contracts. All government contracts don't have a pass-through. Our private contracts do have a pass-through, and we have re-negotiated some of them to get better prices. But on the PSU contracts, we really can't get a pass-through because that's how the tenders are structured. These are public tenders available in the public domain.
Correct. So, understanding from that, since the prices had escalated and what we had guided in the Q1 was on the basis of the price which has already run up and wherein we had maintained the margin to 10.5%, which now we are reducing to 6% to 7%. So, that also acts as a surprise package for investors. So, we are not questioning the integrity, but just as an investor, we are quite curious to know, sir.
Sir, I will tell you what happens is, sir, we also cannot predict where the raw material prices will go. Sometimes when there are very sudden movements, what we do is we try to expedite our products, projects. So, we have to ensure that we are either able to complete before that or we are able to keep sufficient time. So, let's say I get 14 months to execute a project. So, I will try to complete the path where the prices have not increased significantly so that I have maybe 6 or 7 months where I can wait out and the prices can come down before incurring an LD. So, in the current year, what has happened is our observation or our foresight was that this is a temporary increase in price because the war has happened and this war will subside and the prices will come down. And we have tried to delay as much of our procurement as we could. You will see that we've done over about 400 crores till H2. We could have done much higher because we have been delaying. And to be honest, on the best project, we really did not move much because the prices were very, very high. To be honest, my IRRs on best projects have fallen to maybe 8 or 9%, which have almost doubled because we waited out 6 months and we finished parts that we could without incurring extra costs. So while I am guiding 5 to 6%, we will try to improve this further in the H2 of this year because prices are moderating now. And that should help in improving the margin on our project.
So this year, I assume that there would be margin pressure, but next year, since you are guiding, but what I mean to say, sir, we have guided earlier also, and twice we have changed our goalposts. So how confident, sir, as a management, we are to, you know, achieve our F-28.
Sir, as a management, I have to always be optimistic. So, we take this company forward. But having said that, sir, it is, it is, some things are beyond my control. So, some of the prices that have moved are very, very significant. Some changes in prices, we are always able to absorb and maintain our margins. We can, we as a company are very, very good at design and engineering. We come up with innovative designs to reduce our costs while keeping the same output and same kind of quality for our customers. But at some level, even we are unable to absorb the prices that are exceeding. My expectation still is that from January, there will be a significant decline in steel and copper prices. Copper, I feel, has already started falling and steel should also fall next year. With the kind of volatility the world has seen in the past 12 months, I think even a very high growth rate would be a very difficult thing for the world to achieve. So, obviously, the first thing to call are metals whenever a blowdown happens. So, my expectation is still these prices will come down. West has been a case where within a period of maybe 9 months, prices have doubled and then half. So, I would rest my case by saying that I am optimistic that the prices will come down. But having said that, we have picked up around 1500 crores of orders this year, which are at higher prices, which should give very high margin if the prices come back to the normal rate.
Okay, and if the prices are at the similar level, or they escalate in a decent manner, so what kind of margins could be there at that point, sir?
Sir, so what is happening between the current year and the next year, there is a major shift. Firstly, on the best, most of my best projects, the inquiries that we are getting are from private customers, which are linked to the lithium cell prices. Now, we are projecting around almost 1,500 to 1,800 crores of revenue from BES. So, my margins on those BES projects should not move much. So, I would say that would give a lot of stability compared to this year, if you compare the next year. Second big upside next year should be the solar cell line. Again, that is a high margin business compared to the EPC. So, EPC, pure solar EPC next year should be maybe about 30 to 40% of my business. So, volatility in raw material prices will not pack much on solar world.
Got your point, sir. Thank you so much, sir, for having such a candid conversation. Thank you. Thank you.
Operator
Thank you. A reminder to participants, to ask a question, please press star and one on your phone. Next question is from the line of Amok Bhattavdekar from Ventura Securities. Please go ahead.
Good evening, sir. Good evening, sir. Can you hear me?
Yes, sir. I can hear you, sir.
Yeah, yeah. So, my question is, you have mentioned in the presentation that you have submitted bids around 20,000 crores. Am I right?
So, yeah. So, can you give break up, I mean, in terms of ASU and private sector?
Sir, I will ask my team to upload that on the website, sir.
Yeah, or it is largely PFU.
Sir, it is largely PFU, and a big part of that is best orders from NDPC REL.
Okay, and what about, sir, that particular order, where we were L1, around 400 crores? Sir, two orders, where we are L1.
Sorry, sir, please, can you come again?
Yeah, you had mentioned in last week, I guess, In annual AGM, there you mentioned, no?
Yes, sir. After that, also, we had one more order from NDPC, and we have had two order wins. The total order value is about 1,271 crores. We have still not received the LOA for this, but we were L1 in both these orders.
Okay, so are you expecting only time soon?
Sir, it should come maybe in November or early December. It purely depends on when the NDPC-REL board will approve that and issue us the LOI. Okay. Okay. Great.
Thank you, sir. Yeah. Thank you, sir. Thank you.
Operator
Thank you. Next question is from the line of Keshav Harlalka from BHH Securities. Please go ahead.
All right. Thank you. Am I audible? Hello, sir. Yes, sir, you are audible. Yes, sir, yes, sir. Thank you so much for taking my call, Karthik. The numbers are not good, and what you guided is, you will do 1600 crores for the full year, 1600 to 1700 crores as a revenue for this year, and a 5% fat, 5 to 6% fat margin, which you are saying you will try to improve.
Sir, last year my H2 was around 20 crores, last H1 was 20 crores, H2 was 100 crores. So, that's how the business is structured. We are fairly confident we should be able to achieve this.
That's great. Now, I would want to appreciate that you guys are getting into lithium-ion batteries and that's a good thing. Plus, you are getting the best margin, less volatile and you have a better single organization. See, what I think for next year, what kind of revenue and what kind of margin?
Sir, so if you ask us, our target over the next 2-3 years is to achieve a top line of about 5000 crores. Next year, our target would be to hit around 3000 crores in revenue. In terms of breakup, we will target about 1500-1800 crores of revenue from our best factory and best EPC and around 1200-1400 crores of revenue from our solar EPC.
So when I say solar EPC, that would include my solar EPC, my module manufacturing line, and solar cell manufacturing line bundled into one. Okay. And when I say best EPC, it will include my best EPC work and the best battery. Okay.
Now, my second question is, going on to the conversation, I have heard that there is a gap between, say, for a PSU, we've submitted that we want to do your project at a certain cost. And there's a gap between our submission and in the case of NTPC, the gap for seven months. And prices are volatile. So, how do we account for volatile prices and at the same time get the order and not compromise on margins? Have you thought about any strategy for doing that?
Sir, it's a fair question. But if you are working for the government, the tender specifies that you have to keep your bid open for 120 to 180 days. So, there's not really a lot that we can do after we win the L1. Otherwise, our earnest money deposits will get in cash and we also run the risk of getting blacklisted. So, there's not really much. I would be honest to you, there's not really much we can do there. But having said that, we have been in this business for a very long time. These kind of volatility, we have also not seen happening in the market in three months, four months time. So I think even our customers who are very fair to us don't even expect such movements to happen. I think it's an outlier that all the metal prices have moved this year. I don't, it can happen in the future, but I don't see it happening very frequently. And I'm sure it is not just disrupting our business, it is disrupting all other industries also, because this kind of volatility is not good for anybody.
Absolutely. And I appreciate that at the end of the quarter, you gave us a business update. The results take time to come with the audit and everything happening. But the business update is very encouraging. Thank you so much and keep it up, sir. That's all for my time. Thank you so much.
Operator
Thank you. Next question is from the line of Parveen Malhotra, an individual investor. Please go ahead.
Yeah. Hi. Good evening, everyone. Good evening, sir. Yeah. My question is regarding this JV, which is happening in Madhya Pradesh for the solar cell manufacturing. So I have two questions regarding this. One is like, you know, what kind of technology we are using right now, and how long do you feel it will be sustainable? And secondly, like, you know, what kind of usage of this manufacturing facility will make? I mean, inside and outside, like, what percentage will go to your internal projects, and what will be, are you going to sell these things also? These are my two questions.
Okay, sir, so we are, this facility will be a TopCon facility. In terms of, I think your question was more directed towards what will be the technological of this product. So, in India, everybody is setting up TopCon. China has put restrictions on the newer technologies, HJT and TopCon as well included. But in India, once we make an investment, and everybody is making this investment simultaneously, so I don't expect a lot of companies to move to newer technologies. Even in China, the technological development has kind of slowed right now because overall the demand in China has been lower and the solar industry has been suffering there. So, I would feel that we, I personally don't see a lot of technological obsolescence risk for the next 5 to 7 years in this industry right now, having said that, first. Second, in terms of internal consumption between the two JV partners, I think we would expect to internally consume about 70 to 80% of the capacity. The balance capacity, maybe 15 to 20%, we will look to sell to external customers. SolarWorld already runs a 1.5 gigawatt of solar manufacturing plant. So, we will convert about 1.5 gigawatt from cell to solar panels internally. So, we could sell the solar panels, any surplus solar panels, or if we have any solar surplus cells, then we will also sell that into the market. But at present, I feel 60 to 70% will easily get utilized in all.
Okay, that's great. Thanks for answering my question. And in extension to this, just I wanted to know, you know, because you are right, I mean, within country, people are making capex, and there is not much threat of technology. But what if it comes from, let us say, US, Japan, they invent some more, I mean, asset-like technology? So then, do you see any threat of that thing, first thing? And secondly, like, you know, you are investing a substantial amount, like 420 crores kind of thing in this manufacturing unit, which is also in the partnership. So, because, you know, you are an EPC company, and can't you keep it like asset-like model where you can utilize this 500 crore amount in using your asset-like models and make it more, I mean, capital can be used in a more appropriate way. This is my query.
Sir, so on the first bit, technological changes in the world will definitely happen, but whether they would percolate into India or not, my comment was more directed towards that. Sir, see, when we do an investment, we have to look at the investment cycle and recovery of that investment before we can invest into newer technology. And while in India, half the capacity still is sitting on M10R and they are updating themselves to G12R, I don't see people trying to leapfrog each other to getting into maybe a HJT or some other technology. Reliance is doing that, but you would not have heard anybody else doing that right now. So I think for four to five years, I don't see people investing a lot into newer technology. Topcon is a fairly stable technology right now. HJT has not become that stable, according to me. There's a very limited capacity installed worldwide. So any new technology that comes in, comes in at a higher cost. And to get it to India and to install and to stabilize and to do it will definitely take some time. And India is a very cost sensitive market. So I feel that newer technologies do take time to percolate. What happens with the new technology is the area required will reduce. The output from a similar solar panel improves, so your area required reduces. Land is not a constraint in India for some of the larger projects. To get a newer technology at a higher price sometimes becomes difficult. So from that perspective, I don't feel technological obsolescence in India right now is a big question. I think the bigger question is whether we are able to get those plants and to install and commission them and operate them at a very high level of efficiency.
Right. Yeah, thanks for that. And you didn't answer my AssetLite model question.
As per to on AssetLite, we have been operating on AssetLite model for a very long time. We took a conscious call to set up backward integration only to the extent that it will support our EPC business. So we are still not looking to convert ourselves into a major manufacturer like a Wari or a Vikram. We will not go ahead and expand these facilities into a 5 gigawatt or 10 gigawatt facility, we will remain concerned to the extent that it supports our EPC business work. Our motto is that we should be India's leading backward integrated EPC company and not a leading manufacturer. So, this manufacturing gives us help in improving our margin, gives us continuity on quality and supply chain, and that is also a big help in promoting our EPC business.
Yeah, thank you very much. What do you think about the TAM for this BESS model?
Sorry, sir? Total addressable market, sir?
Sir, so India is expected to install somewhere between 360 to 400 gigawatt hour of best project over the next five to six years. That is just the utility scale. One megawatt or five megawatt of one megawatt of container is maybe around 70 lakh of rupees. So you can kind of extrapolate from that that this market has become substantially larger than the solar market itself. And then you have the CNI and residential market, which is also fairly large. So I would say the time is very, very large and it's a good market to address.
And, sir, you mentioned in your previous discussion that, you know, this BESS will be going to complement and supplement this Genset market also. But as of now, cost-wise, we see this is like, you know, more costly nowadays as compared to the Genset markets. So, I mean, you are right, absolutely. In future, it will definitely be replacing these markets, UPS and Genset. But right now, how do you see these cost challenges?
Sir, to be honest, we are discussing with a lot of CNI customers and all of them are investing into lithium batteries, be it for UPS or for power backup. So, to consider Northern India, it's a very good time to have this call. Our AQI is around 700. As per the Grab 3, we are not allowed to run our generators. So, it is not even about cost anymore. People have to transfer, they have to invest into battery energy storage to get power backup. So, it's a fairly large market. When you consider that a battery energy system gives you power back up as well as acts for your UPS, the cost economics do work out. Thirdly, sir, compared to the start of this year, the best prices have fallen significantly. So, cost economics to some extent has also started working out.
All right. Okay, sir. Thank you very much. Thanks for answering all my questions. Thank you. Thank you. Thank you, sir.
Operator
Thank you. Ladies and gentlemen, due to time constraints, we'll take that as the last question for today. I now hand the conference over to management for closing comments. Over to you, sir.
Thank you, everyone. Thank you for joining our call today. We have taken your guidance and feedback, and we will come back to you shortly on how we can improve our margins and how the management is thinking in terms of improving shareholder value. We thank you for your valuable time today and your valuable questions, and we do hope to give you better results in the next quarter.
Operator
Thank you, members of the management team. On behalf of Solar World Energy Solutions Limited, that concludes this conference. Thank you all for joining us. Humana, disconnect your line.
