Fujiyama Power Systems Limited (UTLSOLAR) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Fujiyama Power Systems Tokyo FI27 Earning Conference Court, hosted by Motilal Oswal Financial Services Ltd. 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 this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Yash from Motila Loswal Financial Services Limited. Thank you and over to you, sir.

Thank you. On the call today, we have the management team, being represented by Mr. Pawan Kumar Garg, Chairman and Joint Managing Director, Mr. Yogi Dua, CEO and Joint Managing Director, and Mr. Pazan Gusta, CEO. We will begin the call with key thoughts from the management team. Thereafter, we will open the floor for Q&A session. I would now like to request the management to share the perspective on the performance of the company. Thank you, and over to you, sir.

Good afternoon, everyone, and thank you for joining Fusyama Earning Call for second quarter and first half of FY 2027. With me today, Mr. Yogesh Duva, our CEO and joint managing director, and Mr. Farshant Gupta, our CFO. I would like to use my time a little bit differently today. The numbers are in the presentation, and Prashant will take you through them.

I want to talk about what kind of company Fuseama is, and why we believe this business keeps compounding. I also want to answer few FAQ that is in margin this quarter, and increase in inventory. Let us discuss half year in a short. In the first six months of FY27, Fuziama did 2652 crore of revenue, that is practically similar to the 2655 crore we did in whole year of FY26. Ebitda for the half-year is 478 crore, up 129%, and normalized pay after tax. Profit after tax is 296 crore, 98 crore, up 128%. In Q2, revenue grew 130% to 1307 crore, and EBITDA grew 116% to 223 crore. We can say double the business in a year during this period. We have done that while putting money into plant, people, and reaching for next targets. Let us discuss who we are. Sometimes we are grouped with solar module manufacturers. We are not pure solar module company. Fusyama is consumer company in household energy. More than 85% of our revenue comes from retail, household, and small businesses, who buy from a dealer in their own town. Fujama is listed company in India that is built exclusively around the rooftop solar solutions for retail customers and that also make every core part of system itself, solar cell, solar panel, inverter, and batteries. We do this across all three systems type on-grid, off-grid, and hybrid. Our range has wide range of SKU in different range from 40W panel to 120 kVA online UPS. Why does this matter? A household does not buy panel, it buys outcome. A lower electricity bill or power when grid fails. or both. Each customer has a different requirement. For example, family in Eastern UP need backup above everything else. A family in Gujarat wants to export power to the grid. A shop in Madhya Pradesh wants both. A company that makes all these type of systems can sell each of them. The right solution through same dealer, with one brand, one warranty, and one service promise. That is our one-stop-shop advantage. And it is very hard to copy. The business was built brick by brick. Our roots go back to 1996 when we started with inverter and UPS. We were selling off-grid solar in small towns of India, long before current subsidy existed. In the last five years alone, we have sold more than 1.4 million inverters, including about 4.5 lakhs in FY26. Every one of those home is a relationship for life. It will need batteries, panels, upgrades, and services. Let us discuss five strategic modes that are hard to replace. First mode, distribution and deep retail reach. We have more than 10,200 channel partners, distributors, dealers, and exclusive util shoppies across more than 25 states, union territories. More of these relationships go back 15 to 25 years. We are now going deeper into new states. On the map, on page number 18, in our presentation, we are covered in 13 states, growing in 5 states. and running special focus program in four. Fourteen more states and UTs are still largely in front offer. In this half year, we added more than 100 distributors and more than 1000 dealers. Odisha and Uttarakhand moved into fully covered category. This expanding network provides unparalleled customer proximity in tier 2 and tier 3 markets, supporting rapid product delivery, installation, after-change service. Our vision is to expand the number of channel partners in similar way. Second mode, service on the roof and R&D feedback loop. The hardest part of this industry is not making panel. India today has far more module capacity. The hard part is mounting the systems on millions of roofs and keeping them working for 25 years. Fujiyama now more than 1,000 on-roll service engineers, up from about 650 in March this year. They are our own employees, not outsourced. And they support dealers in person for own sales and installation. Every complaint they log goes back to our 80 plus R&D engineers. That feedback loop is how we developed products such as our patented RMPT, hybrid inverter technology, as well as combo UPS and online PCUs. Third mode, technology that scales service. UTL-AI, serving millions of households across thousands of small towns is a data problem as much as field problem. Our board member Mr. Sunil Kumar, an IIT Delhi alumni with more than 24 years in software development, including at Google, has guided our in-house team in building UTL-AI. It is one platform that runs our sales, service, and dealer network through WhatsApp and voice chatbot, operating 24 into 7 in local languages. An intelligent service bot registers and resolves complaints around the clock. The platform also predicts which spare part each region will need. Guides our service engineers to visit our dealers along with their routes, and uses data to pick up the next district or dealer to add. All of it is built in-house. In simple terms, it lets us grow sale and service quality without additional cost growing at the same pace. Fourth mode. Backward integration, regulatory compliance, and data security. Today we have manufacturing capacity of 1 GW of solar cell, 3.5 GW of solar panel, 4 GW of power electronics, 545 MWh of lithium-ion batteries. Inside our inverter, we make sheet metal cabinet, heat sink, wiring harness, Transformers and coils, we do our own PCB assembly, meaning EMS in-house. Inside our lithium-ion battery, we make our own BMS cards, communication boards, and busbars. In the first quarter, we raised our stake in JioEnergy and JioCable to 50%. In the next financial year, these companies have a plan to make frame, ribbon, junction box, and cable and EVA sheets for solar module. This extensive backward integration insulates us from import price volatility. Protects gross margin and builds special cost mode. Furthermore, regulation is moving heavily in our favor. Since August 2026, M&I has required inverter suppliers under PM Surya Garage to keep their app, servers, and data strictly in India. Alongside mandatory M2M SIM data loggers, The Central Electricity Authority New Cyber Security Regulations July 2026 pushed the whole sector to the same way. We have confirmed our full compliance to MNRE. Our dongles, data loggers, and monitoring system are made in India and our data sits in Indian servers. As new regulations, strict, unwield, foreign hardware and cloud platform, our compliant domestic platform become a key competitive mode. Fifth mode, Brand equity and dual brand strategy. We deploy a powerful dual brand strategy. Suryakumar Yadav represents Fuziyama Solar and Anand Kapoor represents UDL Solar. UTR carries close to three decades of trust in tier 2, tier 3 in India. Our panels carry 25 years' performance warranty and our on-grid inverters carry up to 10 years' product warranty. In a category where customer is buying from his their last decade, brand equity and warranty trust are core drivers of pricing power. Let us discuss capacity, what is coming next and why it adds to margin. In August, we commissioned 2 GW power electronics facility at Radhanam. Radhanam now runs both solar panels, which started in May, and power electronics, three more additions are coming. Lithium ion battery at Radhanam. We have uptight our facility from 2 GWh to 3 GWh, and expect it come online in coming quarter. That will take our lithium ion capacity to 3.5 GWh. Tubular batteries at Hadhras, Uttar Pardes. A new 1 GWh plant that replaces bowel capacity lost in my fire. It is expected to be commissioned in the coming quarter. Top phone solar cell at Rathlam. 1.2 GW is on track for K1 FY28. It will take our cell capacity to 2.2 GW. We are pushing hard for an earlier launch. Adding top-con cells with existing perc cell manufacturing will significantly enhance our efficiency and competitiveness to DPR market. The important point is each of these plants replaces something we buy from outside today or tomorrow. Since the bubble fire, we have been buying tubular batteries from outside. Suppliers and we buy every cell for every panel beyond our 1 gigawatt capacity. Our lithium-ion requirement also exceeding our current in-house capacity. The demand for these products already exist in our own sales. So this new capacity adds to margin from its first unit. It does not have to find new customers. It replaces external purchases. Beyond this, we are evaluating ingot breakfasts ahead of ALMM List 3, which starts in June 2028, as well as sodium ion or any other Advanced chemistry battery, we are also gaining experience in battery energy storage through 5 MW pilot at Dadari, and planned 10 MW installation at Radulam. Concerns, margin and inventory. Now, let me take the two FAQs, post our results and answer them directly on margin. Our EBITDA margin was 17.1% in K2 against 18.9% in K1. Though our gross margin is similar in both the quarters. Quarter-on-quarter decline is mainly from seasonal softness, which is normal in rooftop solar industry. As absorption of operating fixed cost continues in quarter. Additionally, overhead rose because we stopped and ran the RATLAM facility before its full volume arrived. That is the cost of building ahead of demand. These overheads are largely fixed. So as RATLAM fills up, they get spread over much larger revenue base. Selling and distribution overheads also increased. Two more items are temporary. The first is bubble fire. Until hardware starts, we buy tubular batteries from outside which means lower margin. The second is deliberate front-loaded expenses in our sales, marketing, and service footprint across new states reflecting the company's investment in brand visibility, including targeted Contains especially tier-2 and tier-3 cities and rural market. Because of war situation, inflation was on a higher side, which is normalizing now. On half-year basis, our EBITDA margin was similar to last year. On inventory side, inventory rose to Rs.1. 1,230 crore in September from 910 crore in March, but the business has doubled in the same period. As mentioned on page number 6 of our presentation, when measured against coax, inventory days actually fell from 123 days to 99 days. If we will see, in respect to sales, it will be less number of days. Overall net working capital days fell from 83 to 59. Receivable days are just 10. So we are not pushing the stock into channel on credit. We keep the stock ready in our warehouse and dispatch fast to our channel partner. The buildup is normal. And sometimes deliberate as explained below. Normally inventory days range as one and half month raw material. 15 days as semi-finished goods, and 1 month as FG. The second point, the domestic sell switch on 1st January 2027. From that date, every net meter rooftop system in India Subsididio. For note, must use panels made with domestic cells, listed under ALM list 2. Cells are very important as June 20, 26. Country has about 35 plus gigawatt of cell capacity against 200 gigawatt of module capacity. We own our cell and we are positioned DCI channel and complete system ahead of this switch. New products from Ratnam. When we add new product lines, raw material adds for initial time, which takes some time to be normalized. Let us discuss PM Suryagar and Demand Beyond Subsidy. PM Suryagar Muspijil Yojana has been remarkable program according to National Portal. It has covered more than 60 lakh households, installed more than 19 GW and released over 36,000 crore of subsidy as on 31st October 2026. About 25 lakhs households remain to be covered in this current phase, which run until March 2027. The next phase PM Suryagar 2.0 is under government's consideration. Reported proposals include support of battery storage, incentive linked actual generation, and shared roof of solar. If storage support comes, It plays directly to a company that makes the panel, the hybrid inverter, and battery under one roof. Here, our business does not depend totally on subsidy. We build our off-grid business over decades without one, and economics now stands on their own. Electricity bill keep rising. Several states including Madhya Pradesh, Jarkhand, Chhattisgarh have raised the tariff for FY27. Household consumption keeps growing with air-conditioner and appliances. In many tier 2, tier 3 towns, supply is still unreliable. So backup is necessary, not a luxury. On-grid solar cannot keep lights on during the power cut. A solar system with a battery can do this. Vormant data shows that more than 20 lakh households under PM Surya Ghar now report zero electricity bill. That kind of word of mouth sells the next system with or without subsidy. The runway is very long. India rooftop solar capacity has grown from about 12 GW in March 2024 to about 26 GW in March 2026. Against an estimated rooftop potential of 637 GW i.e. less than 5% penetration, worldwide data show that there is huge potential in India for rooftop solar as distributed solar is double the efficiency than ground-mounted solar and distribution losses. Let us discuss on solar overcapacity. About overcapacity in India solar, it seems real. But it is in modules that hurts companies that sell modules as a commodity to project developers. Our panels go into our own captive system and are sold through our own channel. So the module price is not what drives our economics. The complete system and service behind it are, within the solar chain, the important part is cell, and we own them. Also important is trusted brand with distributors in every district and an engineer who reaches to the roof. And we have spent close to three decades in building it. When an industry consolidates, market share moves to the companies with brand reach and service. We intend to be one of them. Outlook Supported by our expanding distribution, newly commissioned With capacities at Rathlam and upcoming battery plants, we remain fully confident of achieving our robust growth targets while maintaining our margin discipline. Thank you. I will now hand over to Prashant for financials, after which we will be happy to take your questions. Thank you.

Thank you, Babanji, and good afternoon, everyone. I will cover the quarters and the half-year, then explain the margin and working capital movement, and close with a balance sheet. All figures are standalone and in rupees, rounded up to the nearest crore. When compared to Q2FI26, the company has delivered strong growth in Q2FI27. Revenue from operations was 1307 crore, up by 130%, and EBITDA was 223 crore, up by 116%. Hence, revenue and EBITDA both are more than double compared to Q2-FA26. This was driven by significantly higher sales volume, supported by our pan-India network of on-roll service engineers, and a conscious strategy of passing on cost-benefits to the customers through competitive pricing to expand market share. The Q2-FA27 results also absorbed overhead as a Rathlam facility, incurred ahead of the production ramp-up of our recently commissioned panel and inverter division. which contributed to the moderation in EBITDA margin to 17.1% from 18.1% of Q2 by 26. Profit after tax was also doubled to Rs.133 crore up by 1.2% compared to 11.1% in the corresponding period last year. The moment impact margin was largely in line with the moderation EBIT. This fact was Rs. 191 crore. This includes the exceptional loss of Rs. 143 crore before tax or 107 crore after tax. The insurance claim has been filed for the full carrying value of the damaged assets. Service disposal has already done. Moving on to the working capital, net working capital days improved to 59 days in H1 FY27 from 83 days in FY26 on an annualized basis. Receivable days come down to 10 from 15 and inventory days to 99 from 123, while payable days were 50 against 55. In absolute terms, inventory rose by about 320 crore to 28 crore. In the first half, operating cash flows before working capital changes was about Rs. 490 crore, which shows the earnings are converting to cash. We invested about Rs. 661 crore in working capital to support a business that has been doubled in size and spent about Rs. 184 crore on investing activities. Moving on to the balance sheet. For September 30, 2026, total assets increased to Rs. 2,907 crore from Rs. 2,344 crore as of March 26. Total equity increased to Rs. 1,466 crore from Rs. 1,273 crore. Total debt was Rs. 851 crore, while cash and cash equivalents stood at Rs. 52 crore. The increase in the net debt is to finance working capital and capital expenditures in the plan. With respect to return ratios, we want to clarify that in slide 23 of our earnings presentation, ratios are half-year non-annualized figures. Current half-year bar are shorter than last year. On an annualized basis, our return ratios will be better when they will be presented. Our focus will remain on operational discipline, optimizing working capital, ramping up the alarm, and sustaining robust profitable growth. Thank you. Thank you everyone. We are now open for your questions.

Thank you, sir. We will now begin with 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 then 2. Participants are requested to please use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue is simple.

A reminder to all, you may press star and 1 to ask a question.

We have the first question from the line of Prithviraj from Unify Capital. Please go ahead.

Yeah, hi. You know, thanks for the detailed introduction. I just have a couple of questions. One, we had a very strong H1 revenue growth of, you know, almost 125%. So how should we look at second half, you know, given that only 66 lakh households have benefited versus 1 crore target? Should we expect similar 100% revenue growth in second half or should we see second half to be lower or higher?

Hi, this is Pawan. Can you repeat once more this question?

On the revenue growth, how should we look at second half of this year? Should we expect similar FH1 wherein you know you will double your revenue on a YOY basis or can it be higher or lower?

This question is very difficult, basically, because we have given some guidance and we want to revise the guidance after Q3 results. Basically, I want to skip this question, sorry, first question I am skipping, because this will meant something, guidance again, basically.

So, just to add on what Avanthar is saying, that a lot of variable factors are prevailing in the market. Since Alement 2 is also on the door, with this Alement 2, the market might further shift to the DCR sales, and since the shortage is still continuing on the DCR sales side, and the PM Surizer 2.0 is also under the discussion, and it is very important to see that how government and by when government will give a clarity on that. So, that's why Aghansar wants to wait for another quarter, and we will cover the guidance for the Q4 once we will declare the results for the Q3, because we believe in the coming quarter, some clarity will further come on a PM Suriga 2.0, and the deferment is still there on the chart on the MNREs list about the implementation of LMN2. Hope this clarifies, Sripira.

Okay, sir, let me put it in another way. You know, your revenue guidance for the full year has been, I think, 70 percentage, and H1 alone you have done a very high number. So, would the full year revenue growth will be higher than the guidance, or how shall we look at it?

We will review it, sir, during the Q3 results, basically. We have taken the stand, basically. We will not revise the guidance this time, sir.

Fine. And then, you know, moving on to your margins, given the backward integration that you have been doing across various categories, how should you look at margins? You know, will it be around 18 to 20 percentage, or will it be 15 to 17? You know, how should you look at overall a bit of margin?

It will be sustainable, sir, basically. It will be sustainable, as per our last guidance, basically.

Oh, which is 18 to 19 percent. Got it. Finally, on this news that, you know, Chinese government is looking to ban technology transfer with respect to solar. How are we positioned with the new sales plant? Will there be any issue with respect to execution there?

Machines already received, and we don't see any challenge, basically.

Okay. Thank you, sir, Pramishan. Thank you, sir. Thank you very much.

Thank you. We have the next question from the line of Himancho Bisani from Pinpoint X Capital. Please go ahead.

Hi, sir. Thanks for the opportunity and congratulations on a great set of performance. Sir, our peer, you know, solar cell manufacturers report a margin of north of 30% on EBITDA, and our margin is close to 17% to 19%. And is it just because that our other components of the, you know, kit, your batteries and inverters are a lower margin business or RV? Or is it because that we are still yet to completely integrate our captive consumption? Just want to understand how should we think about the EBITDA margins as, you know, cell integration ramps up. And also considering the fact that supply has increased, the cell prices have gone down. So how should we think about it?

So, definitely, we will try to maintain the margins that we are having currently. Now, first, answering to the first question that you asked. 30% generally are not there uniformly in all the solar panel manufacturers. The biggest differentiator between us and the rest of the players are that the sudden rise in margins for the players who are having competitive advantages in the form of PCR solar cells might be temporary, and it has been seen in this quarter as well that for the other B2B players, there is a slight dip in the margins that we have seen. Whereas in our case, we are strongly positioned that as the first thing that we are into B2C space, where the margin increase will not be sudden and high. So that's why in B2C, it is comparatively more... It's easy to sustain the margin than a pure B2B player, which is more dependent on any government policy or a sudden spike in the demand. So we have built this model in the last 30 years so that the revenue growth is also sustainable and whereas margin growth is also sustainable. And coming to the margin profile mix, definitely in our kitty, we have more than one product of pure solar panel. In solar panels, there are DCR and non-DCR. In batteries, we have lithium and tubular. In inverter, we have all three kinds of inverter, be it off-grid, on-grid, and hybrid. So your second point is correct, that we have a margin profile of consumer-based products, and that's why we are able to give a consistent margin compared to the last half year that we have given in this year of 18%.

So, when you say that it is a B2C and a more sustainable, you know, margin front, so as the integration from the new top-down facility, naturally a margin should increase, right? Is that the understanding?

See, why we don't want to be aggressive on that side. As I said, some part of our business is also linked to the government policies in form of implementation of ALMM2. So, right now, the condition is that this DCR cell shortage is still there because the current run rate of DCR solar cell production is only 2 gigawatts if you compare to the last month, 2.2 to be precise in the last month, whereas the demand is much higher than that. So, that's why if this ALMM2 comes up from 1st January, then again, we believe that this prices of DCR solar cell might further go. Having said that, if it differs, then definitely a different story can come up because of shortages of DCR solar cell currently. Apart from that, as I mentioned in the previous answer, that PM Suriga 2.0 is also still yet to be clarified from the government front. So that's why raw material prices are also included. Geopolitical things are also there, leading to the increase in fuel prices. So that's why we don't, though we have advantages of currently 1 gigawatt monocoque cell line, we have announced additional 1.2 gigawatt top-con solar cell line, but we want to be on a conservative side, that's why we don't give any aggressive guidance to it, because the variability is much higher in terms of raw material pricing and government policies and the shifting of the market demand.

Understood, sir. Sir, continuing on the government policy, Sudhagar 2.2 with something of the best was mentioned in the previous corn call. I know you said that there is yet clarity to come from the government, but what kind of opportunity we are looking at? What is expected? Is it much bigger because of the opportunity size in the market? Sir, this battery-based system we are doing from last 30 years. So it is our business mode basically. If this policy comes, it is directly suits us basically, suits us because we are doing this business for a long time. We think we will get better share in the market, basically. Okay. Lastly, sir, as there are a lot of solar companies which are seeing that the rooftop market is growing so fast and are planning to enter it, and obviously the larger model manufacturers are coming up with their own inverters and kits, what kind of competitive intensity, you know, you see in the industry and how are replays to benefit from it? Okay, so in retail, as you are seeing, when people go to retail, when they go to retail, they have to develop the channel, they have to appoint a service engineer, they have to appoint a sales person. Good morning, everyone, and welcome to the call. अलग से उसका प्रोविडेंड लोस निकालेंगे, उसके बाद क्या डिसीजन होगा, तो उसके बाद ही कह सकते हैं कोई कितना लंबा रुकेगा इसमें, क्योंकि इन्वर्टर भी जब हम करते थे, तो काफी कंपनी जाई थी, जैसे वीडियो कोन भी आई थी, फिलिप्स भी � And there were many companies that had to work in retail, but there was no time to sustain it. So, this is... Thank you. Thank you so much and all, Dominic.

Thank you. We have the next question from the line of Shweta, from iThought BMS. Please go ahead.

Hi, sir. Good afternoon. My first question is basically, out of the BCR panels that we sold in H1, how many of those use our own cells versus bought in cells?

So, for mono, we have the in-house capacity, but there is a good demand for the top one as well. So, just to give you a rough estimate, you can say around 70 to 80 percent is in-house, and 20 to 30 percent that we have sold DCR is from outside.

I got it, sir. My next question is, roughly what percentage of our S1 revenue came from the EM subsidy?

More than 50% of our revenue is coming from this on-grid and DCR-based market.

Okay. So, 50% is from the subsidy customers. Is that the rough split?

Yes. Yes.

Thank you so much.

Thank you.

We have the next question from the line of Sagar Shah from Spark Captain. Please go ahead.

Yeah, good afternoon, management. First of all, happy Diwal and happy New Year to the entire management of Ujiyama. Power systems. Prasanji and Pawanji, actually, my first question was to you. In regards to this oversupply that you referred to, which you said in your opening speech, in regards to the oversupply, which is going to be next year, because we have an industry capacity of 210 gigawatts, whereas the demand is anything around 40 to 45 megawatts on the higher side. So, that means how much you can say the correction is going to be in the model prices. Because our capacity also takes our capacity into consideration, so we also have something like 3.5 gigawatt of panels, and I am talking of FI27-28K, whereas our in-house cell capacity is 2.2 gigawatt. That's why we get to get a plumb and dadri. So, uh, uh, uh, kitna realization me correction hoogah aapke hesap se, that is my first question sir.

So sir, uh, agar hum dekhenge, to non-DCR ka to abhi bhi market kharaab hi chal raha hain. Or isse jyadha kharaab honne ke to sambhavna hoore dikhti bhi nahi hai. जहां तक DCR की बात है कि अगर सारा का सारा DCR यूज होता है, तो अगर ALM 2 जो है ये लिस्ट सुरू हो जाती है, जो के अभी तक की इंडिकेशन तो यह है कि जनुवरी से 100% सुरू होगी ही होगी, तो उतना सेल अभी नहीं बन पा रहा है जितने की रिक्वार्मेंट है. So, there will be a shortage in the cell, and the capacity, if our 3.5 GW is in the panel or 2.2, so 100% will not be able to make it. In the cell, the highest of 85 to 90% is coming, and if we look at the panel, it stays around 70%. So, if we look at that, then our captive consumption is not over-question now, but we may have to take something from the next year.

Got your point.

Sir, the second question was related to other expenses regarding actually. Because your gross margins were quite stable, I don't care about quarterly results. H1 was quite stable as compared to H1 last year. But in this quarter, the other expenses are 112 crores. That is much on the higher side. If you compare it to year-on-year, it's even more than double. Can you please specify?

So, basically, you will see, in the absolute term, if revenue has doubled, we will definitely double. How we see it, we see it as a percentage of revenue. So, in that, what you are seeing... So basically, there are two, three broad reasons. First, we have fixed overheads for RASLAAM. Our inverter was recently capitalized in August. Apart from that, there are some of the overheads from selling distribution. That's a conscious call. Because we want to target tier 2 and tier 3 cities, we have run some one-off campaigns in the advertisement. If you get feedback from the market, You will see that our brand visibility has increased a lot, even in Tier 2, Tier 3 cities and villages. So this is an investment for us to increase our brand visibility for the coming quarter. And similarly, you know, because of this geopolitical crisis, petrol diesel rate, so these are Q2, three reasons.

And sir, the guidance of the next year is prepared. So, the infrastructure, the number of service engineers has increased. And the rest of the infrastructure is prepared for the future. So, that is an investment for the future.

Got your point, sir. So, third question, sir, which is about your expansion, so follow up on that existing question. The expansion that we are investing in the south, because we are planning for next year very aggressively. So, what is the status of your expansion in the south? You have established shoppies, dealers, how is the expansion in the south and your experience as a market?

The five states have been good in the Kerala, and it's better than the other states. The two states are good. We are now trying to increase the number of states in Andhra and Telengana. We hope that the next quarter will be better. So, we are going to get the results and we are still giving the results.

So, South, how much revenue has come from South? Out of the 1307 crores, which we have clocked in this quarter, how much of the South has come from South?

Thank you, sir. Good morning, everyone, and welcome to the call.

Yes, no, no, sir. I will take it offline. My last question was related to cash flow, sir. Our cash flow was negative in six months since the inventory was very high. You have also given its reasons. You are also doing the expansion of Ratlam and Maharashtra. But on that, our debt is also increasing. So, any plans on how the debt can reduce, the cash can increase, the inventory can rationalize the demand, because the inventory is burning our cash, and the debt is burning, and the balance sheet is still heavy. So, related to that. And a suggestion was that, One suggestion was that you can give a little break-up in the next quarter, that how much of your panels, sales, power electronics, individual revenue that you can give in the investor presentation, so the clarity will be good for investors. As a company, Fujiyama is not just a pure solar producer, but it's an integrated company with all solar solutions, not solar products. Thank you very much. Okay, and related to debt, sir.

So, the increase in debt is close to 100 crores for these Atlantic pensions, which we incur in CapEx. As you know, Radzi pointed out that our inventory has increased because our revenue has doubled. So, according to the inventory, it has increased. So, 300 crores for purchase.

So, how do we rationalize this, sir?

Sir, now, look, we are working on inventory, definitely, what are the ways we can optimize this. Apart from that, now, the 80 crore, our... I think the market is already aware that we are taking a resolution on the QIP side. So, maybe we can also plan for the debt keep payment from that.

Okay. Okay. Fine, sir. Thank you. Thank you so much and all the best. I'll take it offline about the south numbers. And happy value to that. That is.

Thank you, sir. Thank you.

Thank you. A reminder to all the participants, you may press star and 1 to ask a question. Ladies and gentlemen, that was the last question. And with that, we conclude the question and answer session. I now hand the conference back to the management for the closing comment. Thank you, and over to you, sir.

Thank you. Thank you once again for joining us today and for your continued interest in FUJAMA. We appreciate your confidence you place in our company. If you have any additional questions, Please feel free to reach us or our Investor Relationship Advisors, Charles Gate Partners, and we will be glad to assist you.

Thank you very much for the time and support. Thank you. Thank you very much.

Thank you, members of the management. On behalf of Motilal Oswal Financial Services Limited, we conclude this conference. Thank you, everyone, for joining with us today, and you may now disconnect your time. Thank you.