Established track record of operations and continued focus on expansions
SEL has a long track record of operations in solar industry which started from EPC of solar projects in 2014 and then diversified to solar PV module manufacturing from October 2022. Further, in March 2025, the company commissioned capacity of 800 MW, bringing its total operational capacity to 1.5 GW. Additionally, SEL is currently undertaking a major capital expenditure plan to expand its overall capacity to 4 GW, expected to commence from October 2025. Moreover, the company is spearheaded by a team of qualified and experienced professionals including Mr. Chetan Shah, who has an experience of over 15 years in the renewable energy industry.

Robust growth in operating performance supported by strong order book
The company reported a revenue of Rs. 660.04 Cr. in FY25, marking a significant increase of ~80 percent y-o-y from FY24 revenues of Rs. 365.90 Cr. This growth is attributable to the strong demand in the solar industry and continuous increase in the company's production capacity along with rise in EPC contracts. Further, the company has a healthy order book of ~Rs. 1,852 Cr. (out of which Rs. 1,275 Cr. is from single client) to be executed in the near term which provides a sound revenue visibility. Additionally, the company’s operating margins have also reflected healthy growth, reported at 10.59 percent in FY25 as compared to 7.94 percent in FY24 on account of improving efficiency in operations. Subsequently, the company’s net profitability increased to 6.00 percent in FY25 as against 2.39 percent in FY24.

Moderate financial risk profile
The financial risk profile of the company is marked by healthy net worth which stood improved at Rs. 157.83 Cr. as on March 31, 2025, against Rs. 46.17 Cr. as on March 31, 2024, owing to accretion of profits to reserves and issuance of fresh equity shares amounting to Rs. 72.93 Cr. in July 2024. Therefore, while, the total debt of the company stood higher at Rs. 147.50 Cr. in FY25, compared to Rs. 96.16 Cr. in FY24 on account of capex-debt, the gearing (debt-equity) stood improved to 0.93 times in FY25 against 2.08 times in FY24. Further, the debt protection metrics stood comfortable with interest coverage ratio of 6.73 times in FY25 (2.90 times in FY24) and debt service coverage ratio of 3.05 times in FY25 (1.65 times in FY24). Going forward, the upcoming capex of ~Rs. 225 Cr. to be funded by debt of Rs. 150 Cr. (balance through equity and internal accruals) shall further elevate the debt levels, however, healthy cash accrual generation is expected to keep the financial risk profile moderate.

Working capital intensive operations
The working capital operations of the company are intensive marked by gross current assets of 184 days in FY25 as compared to 129 days in FY24, driven by high inventory and debtor levels. The company-maintained inventory levels of 108 days in FY25 as compared to 72 days in FY24. In general the company has a 90-day cycle of converting raw materials into finished goods. The debtor levels stood increased at 62 days in FY25 (47 days in FY24) owing to higher billing in the last quarter of the year. Further, the creditor days stood at 60 days in FY25 (65 days in FY24).

Susceptibility to increasing competition and inherent challenges in the industry
While the competition from imports is mitigated through policy measures like Approved List of Models and Manufacturers (ALMM) and imposition of basic custom duty on PV modules, the company remains exposed to competition from other domestic manufacturers, especially with the announcement of large expansion plans by existing players and entry of large new players owing to the growing demands of renewable sources of energy. Further, the profitability indicators remain exposed to the volatility in price movements of key raw materials like solar cells, glass, aluminium. Additionally, the industry remains exposed to policy uncertainties, technological disruptions, supply chain vulnerabilities and dependence on imports for the key raw material like solar cells.