Alpex Solar Ltd - Stunning sun powered performance?

[avneesh]

The image above illustrates the solar panel manufacturing process in detail. At present, India has sufficient solar module manufacturing capacity; it is approaching a state of oversupply. However, the country still faces a significant gap in solar cell manufacturing capacity.

In this industry, the level of backward integration directly influences profitability. The more stages of the value chain a company controls, the higher its potential margins. For example, a manufacturer that produces solar cells in-house, rather than depending on imports, can achieve net profit margins (NPM) of around 25%.

Leading players such as Waaree have taken backward integration even further, extending their operations all the way to ingot and wafer production. Waaree is also moving in forward integration to Battery and inverter manufacturing.

Duties on imported modules and cells:

For now, the revised duty structure lowers the tariff on solar cells to 20%, but with an additional 7.5% Agriculture Infrastructure and Development Cess (AIDC). For solar modules, the duty is now 20% with an additional 20% AIDC.

Even after a 40% duty, the solar module imports from China are cheaper.

Source: India Lowers Customs Duties For Solar Cells & Modules

Competition Landscape:

Waaree Energies

Waaree is India’s largest solar module manufacturer with a capacity of 12 GW for solar modules and 5.4 GW for solar cells. By FY27, Waaree targets 26 GW module capacity, 16 GW solar cell capacity, and 10 GW ingot/wafer capacity.

Adani Solar (Adani Energy Solutions / Mundra plant)

Adani Solar operates one of India’s largest integrated solar manufacturing facilities at Mundra, Gujarat. It currently has 4 GW of module capacity and 4 GW of solar cell capacity, with expansion plans to scale up to 10 GW by 2027.

Tata Power Solar

Tata Power Solar is a pioneer in India’s solar industry with more than three decades of experience. It has an installed capacity of 4.3 GW of solar modules and 705 MW of solar cells, with ongoing plans to expand.

Vikram Solar

Vikram Solar is among India’s leading solar manufacturers with a capacity of 3.5 GW of solar modules and 1.2 GW of solar cells.

Current Company revenue split:

• Module manufacturing: 1.2 GW ( 94.1% of total Revenues in Q1FY26)
• EPC Services of AC/DC Solar Pumps: ( 5.9% of total Revenues in Q1FY26)

The company is going through massive expansion, raising module capacity from 1.2 GW to 3.6 GW, new cell capacity of 1.2 GW and 12,000 tons of aluminium frame manufacturing.

Order book:

As of August 20, 2025 company has an order book of 1600 cr. (Last FY revenue: 780 crore). They are expecting to execute 1600 cr. of orders in this FY. There are still 7 months left to get extra orders that will spill over in the next FY.

Details of Manufacturing Capacity Expansion

• Module Manufacturing
  • Current: 1.2 GW (Greater Noida).
  • Expansion: 1.2 GW additional by Nov 2025, and another 1.2 GW by Mar 2026
  • Target: 3.6 GW total by June 2026.
• Cell Manufacturing
  • New 1.6 GW solar cell line being built in Kosi Kotwan (Mathura).
  • To be rolled out in 3 phases: 500 MW + 500 MW + 600 MW over 2 years.
  • First 500 MW will be rolled out in Mar 2026.
  • Second 500 MW by July 2026
  • Rest 600 MW by Dec 2026
  • Tech: Mono PERC and TOPCon cells.
  • CAPEX: ₹642 crores (funded via internal accruals, equity, and small debt).
• Aluminum Frame Manufacturing
  • Setting up capacity of 12,000 metric tons per year at Kosi.
  • Backward integration to improve margins.

EPC & IPP Expansion

• Subsidiary Alpex Green Energies Pvt. Ltd. created for EPC & IPP business.
• EPC Projects: Targeting 150 MW installations over next 2 years.
• IPP Projects: Targeting 100 MW installations (with acquired SPV Chandra Energy)

Financials: Company growing at 2x in last few years

Management Guidance:

Management:

MD - Mr. Ashwani Sehgal, a Mechanical Engineer from Punjab University, has been a stalwart and pioneer in the field of solar manufacturing and currently serves as the General Secretary of the Indian Solar Manufacturers Association that is ISMA where he has also served as the President for 12 years and played a pivotal role in advocating for favorable government policies that benefit solar manufacturers.

CEO - Mr. Aditya Sehgal has a Bachelor’s Degree in Science with a focus on Electrical Engineering from the prestigious University of California. As the CEO of Alpex Solar, Mr. Aditya Sehgal has been driving the global export opportunity and is focused on developing newer markets.

Risks:

1. Industry is moving towards Topcon technology, but the company is still going for Mono Perc. As per them their 90% of their order book is Mono Perc and it still has 3-4 years of life left.
2. Solar theme is outdated in the market. It might not attract past valuations.
3. There is a risk of overcapacity in module manufacturing by FY2030.
4. Management is trying cell manufacturing for the first time.

Investment Thesis:

1. Increase in PAT margins to 25% because of backward cell manufacturing.
2. The company has an ambitious target of 3000 cr topline by Mar 2027.
3. Even if the company achieves 3000 cr topline at 18% Net Profit Margin, with a modest PE of 20, it will have 10,800 cr MCAP. Roughly 3x from here. An 84% CAGR return in 2 years.
4. The returns will shoot up further if the company achieves 25% NPM (as stated in Q2Fy26 concall), and PE might also expand as cell manufacturing attracts high PE.

Current MCAP: 3200 cr

Disclosure: Invested

[Rahul.s]

My company is 100 m away from their greater noida, kasna plant. They have choked the roads with their trucks and shipments, and rented many warehouses nearby, thats how i came to know about this company.

[avneesh]

Great results by the company

[SA24]

[AMANDEEPSINHA]

Alpex is getting low valuation compared to peers..What’s the issue as management is good..Is it just due to overcapacity in solar sector or some issue with the company?

[AMANDEEPSINHA]

Trade dispute: China seeks WTO consultations with India over ICT tariffs;...

Will there be adverse impact on Solar manufacturers like Alpex?

[Agastya]

Here is my thesis on this stock (not invested yet)

Central Catalyst: Jun 2026 Policy Change - Govt requires EPC players to use solar modules which are themselves made in India, and whose cells are also made in India, which conform to DCR. ~50GW of India’s 100GW module production capacity is by smaller players who import cells from China (>27.5% cheaper, i.e. cheaper even after Indian subsidies and non-tariff barriers). Module market is witnessing oversupply, causing EPC contracts to remain a sole high-margin option for small-midsize module manufacturers. Thus, such manufacturers are rushing towards undergoing capex. As many smaller manufacturers will not have flexible balance sheets and technological capabilities to raise funds in order to develop economic capacities for self-production to meet the Jun 2026 deadline, to effectively stay in the market, this policy is thus a consolidation pivot by the govt, which will filter out weaker players and lead to economies of scale in the solar industry, thereby helping the industry be able to compete against foreign competition over time.

Capex Plan: Currently Alpex buys cells, partly buys aluminium and partly uses own produced aluminium, with this it produces modules, which it sells under “Alpex” brand with Rahul Dravid as brand ambassador, and sets up for EPC contracts with govt. Alpex now plans to solidify its brand and backward integrate by developing its own TOPCon cell-manufacturing capacity of 2.2GW, aluminium facility of 12000MTPA and raise its module production capacity to 3x, i.e. 3.6GW by FY27. It aims to raise its margins due to the backward integration and also by becoming a part of the ALMM List 2 and produce DCR solar cells, making it able to compete for larger govt and PSU tenders due to policy shift from Jun 2026.

Component	Production Increase	Deadline
Module Phase 2	1.2GW	Jan 2026
Aluminium Plant	12000MTPA	March 2026
Cell Phase 1	1.4GW TOPCon	Q1 FY27
Cell Phase 2	800MW (total 2.2GW)	Q3 FY27
Module Phase 3	1.2GW (total 3.6GW	End, FY27

Reasons for recent fall:

1. Module manufacturer: MNRE said demand only for 30-40GW, domestic supply of 100GW
2. Module manufacturer: MNRE asked banks to be cautious about lending to sole-module manufacturers due to over supply
3. Raising Rs. 125cr NCD at 14.75%: 14.75% pa paid monthly; very high. But no principal repayment until 18 months
4. China: Complaint issued by China against Indian schemes like ALMM which protect domestic solar industry from Chinese players (who produce at 1/3rd the cost of Indian producers). Also, Chinese wafer export limitations can affect performance.
5. Capex yet not completed: TOPCon plant execution risk - if company is not able to achieve efficiency then margin improvisation may not happen and Jun 2026 deadline may not be met, causing significant effect on sales and orders
6. PMKUSUM, Govt Schemes and PSUs: Profitability is anchored at govt schemes, PSU orders. Module manufacturing and sale to private firms is leaves the company exposed to oversupply, and prices for modules are highly volatile (point 1). Govt schemes and PSU orders have specific requirements (DCR, ALMM) which provide moat and margin. Govt schemes contribute ~11% of revenue as of FY25, and PSUs 60-65%.
7. Higher working capital in FY27: Management forecasts 300cr working capital requirement in FY27; company may need to raise more funds, as profits will most likely not top 200cr for FY26, of which a significant part is reinvested in capex.

Positives/Explanations:

1. Against points 1-2: Diversifying to cell manufacturing to backward integrate; for govt schemes like PMKUSUM and PSU orders, from June 2026, company must manufacture cells also domestically for it to be valid to fill tenders. This will eliminate many module manufacturers since they import cells, and also explains the emergency in raising funds (at such high rates). For vertical integration to be viable, they are developing 2.2GW cell manufacturing using TOPCon technology (more efficient than monoPERC, which many old cell manufacturers are stuck at), and to consume the entire 2.2GW cell manufacturing themselves, they are expanding their module manufacturing too.
2. Against NCD: NCD=no loss of equity stake/no dilution. Also in the terms of NCD, there is no principal repayment for 18 months (June 2027), which may contribute to higher interest, and the company’s promoters have given personal guarantees. This can be almost equivalent to the confidence boost investors get when promoters raise their stake in the business (they already conducted private placement round in Sept 2025 causing the perceived dilution in promoter holding, raising Rs. 260cr (160cr all-cash from public investors and FIIs, which includes 25% on allotment of warrants by promoter family, and rest 100cr by FY27 through warrants issued to promoter at a valuation of Rs. 3200cr). Interest expense will be ~20cr (visavis TTM PAT of 154cr), but expansion related EBITDA growth will be considerably higher.
   For mid-sized players like Alpex, the 14.75% NCD becomes the cost of staying in the business and filing for larger tenders (policy-catalysed expansion plan).
3. Against China: This is more of a diplomatic manoeuvre to show India in bad light since the Appellate Bench isn’t full right now (US has blocked appointment); so even if WTO ruling (which takes 2 years) is in favour of China, India can appeal against it and the case will be benched. Also India has experience in losing a similar case against US, it may have learnt from this experience. Wafer export limitations raise price of wafers. This affects the entire market, and so the players may be able to pass down the increase in cost to govt via raising tender prices.
4. Against risk of implementation: Management has delivered on its targets in the past, engineering team is trained in China and Taiwan
5. Against PMKUSUM: While true, company’s cash conversion cycle and debtor days is manageable at ~60 (Shakti Pumps, with ~25% share in PMKUSUM, has 100+; it is also mirroring Alpex’s capex plan, but raising funds entirely via QIP). By expanding module manufacturing, the company will be able to file tender for larger orders, increase govt schemes’ and PSUs’ share in its revenues, and gain significant advantage against small module producers (~50GW) by being DCR, ALMM compliant, and having cost advantage over them due to backward integration. This may force out smaller domestic module manufacturers, since they can’t compete in price in the open module manufacturing market too.
6. Competition: Waaree, Tata, Adani largely export to US, due to US trade restrictions, players like Waaree are moving module manufacturing there; but they also dumped modules in domestic markets, causing windfall of supply. They don’t get into govt tenders as scale is small. Competition is players like Shakti Pumps, who may lag in technology. Alpex has been in solar tech business for 20 years.
7. Working capital requirements: Company is incurring total capex of ~850cr and needs additional WC requirement of 150cr over FY26 and FY27, of which ~350cr is to be funded using debt (~180cr done), 160cr (+100cr in FY27) via QIP. Remaining ~500cr will be raised by a mix of internal accruals and private placement. Assuming ~250cr is through accruals, ~250cr will be raised again via QIP. Important to highlight is the criticalness of the execution of capex plan. If it is successful, QIP will occur with less dilution.
8. Main board migration: Company can apply for main board migration in February 2027. The fact that HNIs and FPIs entered the stock while it is still on the SME exchange, at a valuation higher than current market valuation implies their conviction (since they most likely will have a lock in period, even if they don’t it will be very difficult for them to liquidate), and this validates our story.

Order book is 3x of FY25 Sales. TTM P/E is 13. Debt/Equity is 0.4. ICR is > 7 on trailing PBT. Promoter has purchased warrants at 3200cr valuation.

Why not Shakti Pumps, etc? Because growth is on larger base, they have history of equity dilution, TTM P/E is also higher at 23, and market sentiment isn’t as damp (past 10 days have seen 30% rise in share price for Shakti Pumps).

Assuming, conservatively, that the target of 1800cr annual sales is met (H1FY26 sales was 903cr itself, Q4 is generally the best), and PAT margin falls to ~10% (H1FY26 PAT margin = 10.5%, considering same PAT but with increased interest expense (NCD) of 0.5% on 1800cr, PAT margin for the year = ~10%). Then PAT is 180cr and FY26 forward P/E is ~11.7.

Going by the management’s official target of 3000cr revenue for FY27 with higher EBITDA margins (18%), the company should achieve a ~300+cr PAT in 1.5year’s time, resulting in a FY27 P/E of 7, PEG of ~0.1. Of course we must take this with a pinch of salt, but even by using this to gauge expected trajectory, Alpex looks like a bargain.

Summary: Depressed conditions because: NCD raise, doubts on execution, QIP raise, oversupply. Real threat: only delayed execution of TOPCon project.
Strengths: Promoter skin-in-the-game and entry at a valuation above current valuations, PEG of 0.1 and future P/E of 7 given growth estimates, main board migration.

KEY MONITORABLES: TOPCon Plant execution

[NBajaj]

Company: Alpex Solar Limited
Sector: Renewable Energy

Basic Details
• Market Cap: ₹2,400 crores
• Issue Price: ₹115
• Current Price: ₹900 (as of 14th May, 2026)
• Listing Date: February, 2024

Company Overview

Alpex Solar Limited is one of North India’s largest manufacturers of solar PV modules based in Greater Noida, UP (NSE: ALPEXSOLAR). Established in 1993 (alongside solar boom) as a private limited which became public limited entity in FY23, did an IPO listing on NSE SME (₹115/share – subscribed 303x) in February 2024. The story is interesting as it has a legacy of manufacturing from roots, government-policy aligned business mix and an aggressive backward integration roadmap which the market has began recognizing.

The promoter family: - ~65.9% holding in the company: MD Ashwani Sehgal, Executive Director Monica Sehgal, and Director Vipin Sehgal Ashwani Sehgal is a mechanical engineer who left Punjab Tractor Limited in 1993 to start Alpex, served as President of the Indian Solar Manufacturers Association (ISMA) for 12 years and currently serves as General Secretary of ISMA which has helped him leverage significant power over policy creating ALMM, ALCM and ALWM. The closeness to policy is not a nice-to-have but rather core to the business thesis.

Business Model

Alpex operates across multiple parts of the solar value chain, though modules remain the dominant revenue driver today:

• Solar PV Modules (~85–90% of revenue): Manufactures bifacial, mono PERC, half-cut, and TOPCon modules under its own brand as well as via contract manufacturing for Tata Power, Luminous, and Jakson. Sells to EPC players like BVG India, Tata Power, Hild Energy, and Shakti Pumps.

• Aluminium Frames (~3–5% of revenue): Fully in-house, providing ~10% cost savings on this input and supply chain control. This is the first leg of backward integration.

• Solar Water Pumps / EPC (~5–8% of revenue): Government tender-driven segment. Company bids under PM-KUSUM (Component B) in states like Haryana, Rajasthan, Maharashtra, and MP wins tender, installs pumps at farmer locations. Repeat, state-by-state, every budget cycle.

• IPP (Early Stage): Subsidiary Chandra Energy Pvt Ltd is targeting 100 MW of power purchase agreements by FY27 this is meant to be an annuity-like hedge against the cyclical module business, though revenue contribution is negligible at present.

Margin Game

Alpex is a margin story that isn’t yet complete.

• FY23: EBITDA margin ~6%, PAT margin nil – company hamstrung by capacity constraints and a complete reliance on third party cells

• FY24: EBITDA margin expanded to ~9%, as revenues more than doubled to ₹404 crore with the 848 MW → 1.2 GW expansion starting to kick in.

• Q3 FY25 (Dec 2024): EBITDA margin of 19.9% reached this quarter more than any other indicator as a beacon of operating leverage from the scale.

• 9M FY26 (Apr–Dec 2025): Revenue of ₹1,551 crore, EBITDA of ₹161 crore; EBITDA margin ~15.1% Margins – sequentially contracted because the company is in heavy investment and scaling mode complicitly sacrificing near-term profitability for market share.

• In Q3 FY26: A 410 bps YoY erosion in PAT margin to 8.37% from 12.47%, as interest costs nearly doubled QoQ to ₹6.49 crore reflecting working capital intensity

Management margin guidance from Q3 FY26 concall (Feb 2026) MD Ashwani Sehgal guided EBITDA margins to be at least 25%, once the new TOPCon solar cell manufacturing line comes on stream, as weexpect significant valueaddition through backwards integrationinto cells (largest externally procured input currently). Simple logic External cells = margin leakage; in-house cells = margin capture. Management had a more bullish data point which was that on an annualized run-rate basis that the EBITDA 30% margins could be sustainable once the cell line ramp is complete. These management aspirations are still linked to execution timetables and not achieved numbers.

Order Book

• As of Dec 31, 2025: ₹1,899 crore order book

• Key orders in 9M FY26: ₹210.71 crore from SECI (Solar Energy Corporation of India) for module supply; ₹349.99 crore EPC contract from CMPCIL (Central Mine Planning and Design Institute Ltd)

• Management guided for doubling of revenue in FY27 with the order book expanding primarily through repeat customers

• Orders are a mix of PSU module supply contracts (DCR and non-DCR categories) and PM-KUSUM pump tenders structurally different execution profiles but both government-backed

Management’s Guidance

• FY27 target: ₹3,000 crore in revenue management stated this explicitly on the investor call in early 2026

• Context: FY23 revenue was ~₹183 crore. 9M FY26 already at ₹1,551 crore. The 10x jump from FY23 to FY27 is not hypothetical it’s already ~7x done in 2.5 years.

• Management noted on concall: “Compared to FY23, current annualised performance shows over 10x revenue growth, 24x EBITDA growth, and 52x PAT growth.”

• Beyond FY27: An additional 2.4 GW of module capacity at the Kosi facility is being held in reserve management said they will greenlight it only once demand visibility is clearer. Export market re-entry (US, EU) is also being explored once in-house cell production is live.

The TOPCon GameChanger

This is the key bet behind the Alpex thesis.

• Investment – ₹825 crores for capex on 2.2GW TOPCon solar cell manufacturing facility (on a recent land parcel acquisition of ~7 acres in a plot at Kosi Kotwan, Mathura, UP)

• Technology: G12R Wafer size — the lastest format worldwide allowing competitive pricing and higher module efficiency

• Phases: Phase 1 = 1.4 GW; Phase 2 = 800 MW; Total = 2.2 GW

• Why it matters: Today, cells account for ~85–90% of Alpex’s cost in module manufacturing — all sourced externally, primarily from China or a select few Indian suppliers. This translates directly into margin expansion once in-house. Owning your own cell line also adds a layer of competitive moat; companies without an in-house cell will suddenly be having to source from domestic suppliers, who are going to have a ton of pricing power under ALMM List 2 (which requires sourcing cells domestically for IPP projects).

• Silver price risk: Cell fabrication management admitted pressure on silver prices but highlighted that their alternative TOPCon cell design requires less silver usage, and the substitution of copper interconnects is in active development.

Capacity Expansion: 1.2 GW → 3.6 GW

At IPO time (Feb 2024), Alpex operated one facility. By FY27-end, management expects to be running six manufacturing locations.

• Phase I (Current): 1.2 GW module capacity at Greater Noida — operational

• Phase II: +1.2 GW at Greater Noida Eco-tech area — under execution

• Phase III: +1.2 GW at Kosi, Mathura — co-located with cell factory, FY27

• Total by FY27: 3.6 GW module + 2.2 GW cell + 12,000 MT aluminium frame + 115 MW EPC + 100 MW IPP

• Optionality: An additional 2.4 GW module line at Kosi is possible if demand warrants

The PM-KUSUM pump side of things really needs its own spot in the discussion. I mean, people do not always notice how it helps with margins and steady cash flow, but it does. Alpex has gotten empanelled in a few states already, like Haryana through HAREDA, and Rajasthan, Maharashtra with MSEDCL, plus MP and Chhattisgarh. All that for installing solar pumps under the Component B part of PM-KUSUM.

Lately, there have been some solid wins coming in. For example, one in November 2024 from HAREDA worth about 34.51 crore rupees for 1,141 pumps. Then another bigger one, 65 crore from MSEDCL set for December 2025. And just recently, 40.92 crore again from MSEDCL, but that is for April 2026, and it includes a tight 60-day execution window along with a five-year AMC. Speaking of AMC, that annual maintenance contract stuff on these pump orders, it is something to keep an eye on. It creates this recurring revenue that does not need much capex, building up over years.

For Phase II of PM-KUSUM, I think it might launch after March 2026. That could mean a whole new round of tenders, potentially kicking off more activity. Not totally sure on the timing yet, but it feels like it could be big if it happens.

Cyclicality and Seasonality

Solar is an inherently lumpy business and Alpex is no exception:

• H2 heavy: Module order execution clusters in Oct–March as project developers race against fiscal year-end deadlines and utilize the optimal installation weather window

• Q1 (Apr–June) typically weak: State tender cycles reset, disbursements lag, and EPC execution slows due to heat

• Pump tenders: Tied to state budget releases and KUSUM disbursement schedules can be lumpy across quarters even if annual visibility is reasonable

• EPC revenues: Project-driven and back-loaded don’t read into a soft Q1 as structural deterioration; it’s seasonal

• Implication: Evaluate Alpex on trailing 12-month or annual basis, not quarter-to-quarter

Promoter and Management Quality

• Ashwani Sehgal (MD) — Founder with three decades of experience, qualified mechanical engineer, deep ties in policies via ISMA, established operational strategy and commercial operations oversight Has not sold shares.

• Vipin Sehgal (Director): Operations & New Cell Capex execution

• Aditya Sehgal (CEO) & Udaya Sehgal (CFO): Succession pipeline has some clarity as the second generation takes operational roles, but remains untested at scale

• Promoter holding 65.9% high, but pledging up from 0% to 6.5%, Dec 2025 pledging is something to track Some might say, not a huge surprise in absolute terms but direction is important especially when overall capex burn is picking up speed.

• No mutual fund holding as on date - fully retail and FII led at present (FIIs at ~1.5%)

Key Risks

• Execution risk on TOPCon cell line: take out margin re-rating thesis, which hinges on this going live live on time with commercial yields. Any delay directly postpones the 25%+ EBITDA margin target.

• Working capital intensity: Receivables are growing faster than sales one red flag that has been called out by several analysts. On a separate Note, With 9M FY26 interest costs nearly double q-o-q, this need to be tracked.

• Policy dependence: A significant portion of revenues (PM-KUSUM pumps, DCR module sales) is based on the continuation of government schemes. ALMM implementation reversal or delay in KUSUM reduces near-term visibility.

• Silver and commodity raw materials cost: Cells, which use a certain type of silver paste that comes with its own price cycle. Management has province copper replacement started.

• Concern on Chinese competition: Ban on imports of modules gives some short-term protection to India, but any policy reversal (or Thai/SE Asian flooding of cheaper Chinese cells) remains a structural overhang.

Summary

Alpex Solar is the real deal and they are really changing from one sites North India module assembler to integrated solar manufacturing cell Module Frame EPC IPP. The trajectory is validated through the numbers: from ₹183 crore in revenue in FY23 to ₹2,000+ crore by FY26. The central monitorable for the next 12 months is whether the TOPCon cell line comes online on schedule and begins to deliver the promised margin expansion. The order book is real, the promoter has decades of skin in the game and industry relationships, and policy tailwinds are aligned. But the market needs margin delivery not just revenue delivery to re-rate this from a cyclical manufacturer to a structurally profitable integrated player.

Disc: I hold a position in this. I’m no expert and this analysis might be completely off. I’m still learning the ropes. This isn’t advice to buy or sell anything. Please do your own research before making any decisions.

[vikas_chandrawat]

Top-con plant delivery on time and managing the balance sheet stress which is now showing in receivables growing faster than revenue are key here. That’s what I am watching in every quarterly results because failing to manage these will completely mess up their plans, might have to raise large debts and interest cost will eat up the margins. Although I feel all of this is priced in and that’s why it’s still available at a very good valuation.

I have been invested since 1.5 years, the company has delivered the guided growth quarter after quarter. Their strategic initiatives are on point: directly building top-con, going deep on PM-Kusum, Al frames etc.

Disc. My largest bet, not a buy/sell recom.

[NBajaj]

Valid points, but I’d separate two things on receivables that is it collection inefficiency or just mix shift.

As government/PM-Kusum orders structurally carry longer payment cycles, so some DSO increase is expected.

Waiting for Q4 result to ask the same

What gives me comfort is that I’ve been actively tracking this for a couple of quarters now and management has consistently delivered on guided numbers on revenue, margins, capacity timelines, all met. And the real margin story is still ahead. Once the Al-frame plant and the cell manufacturing kick in, the backward integration alone could push EBITDA from current 16% toward 25-30%. If that plays out, the current valuation looks cheap as market already priced in the execution risk and management is actually playing very strategically.

[vikas_chandrawat]

I agree that the receivables stretch is mostly driven by govt. projects. So on a qualitative basis it’s justified. But even then it will cause stress on the balance sheet and company will have to fund that gap via additional short-term debt. That kind of developments will eat into the margins and the thesis rests on successful execution resulting into margin expansion. If Alpex was backed by some large peers like Waaree, Tata, Adani etc. the receivables stretch would be just a small bump in a long journey. But for a player of this scale it can be a meaningful hurdle.

Eagerly waiting for the Q4 results and con-calls

[vikas_chandrawat]

Alpex Solar Q4FY26 Results & Earnings Calls:

Alpex delivered solid results for the FY26 and Q4FY26. The management has been guiding doubling the revenues every year post IPO and they have more or less delivered the same. Below is the quick snapshot:

• Revenue and net profit almost tripled.
• Ebidta and PAT margins took a slight hit .( ~1.5-2%)
• Interest costs tripled, and D/E rose to 0.96x.
• Working capital days were almost flat at 37 days, up from 35 days last FY.
• Debtors have been on a decline, but inventory days are rising.
• OCF turned negative.

All in all, good results, but cash stress needs to be watched carefully from now on given D/E rose to 0.96x and interest costs climbed up eating into PAT margins.

Now, coming to the qualitative matter of things let’s look at the “backward integration roadmap and execution” given the entire thesis for Alpex stands on successfull execution of expansion plans resulting into a greater margin profiles with revenue growth.

• The entire 2.2 GW cell line is to be commissioned within the next 90 days. This is a huge positive, and it should provide some relief for the negative OCF. If the cell lines start delivering revenue in Q2-Q3 FY27, then it will help with the OCF recovery.
• Management is bullish on the future, FY27 guidance at 3000+ crores. Post capacity expansion the margin profile was guided as ~25-30% Ebidta margins. The margin guidance was indirectly guided based on what peers are enjoying with top-con cell integration.
• Management is doubling down on the backward integration path with the announcement of “5 GW solar glass and ingot/wafers manufacturing to be commissioned by FY30.
• They will be doing the pilot expansion of 200MW for wafers/ingots by April 2027 to absorb the technology know-how.
• Moving towards digitization with complete SAP integration in their workflow.

All of this has been good news, what I found very surprising was that there was not any discussion on the Capex and financing part of the business in con-call. I couldn’t attend the con-call so I just listened to it and neither any investor asked about it nor the management talked about it. Either everyone is pretty clear on this part and I am the less informed one or we are showing extreme beleif in the management. But this is a part where I am loosing a bit of sleep so I started putting together how the company is doing their capex and what kind of D/E can we expect going ahead. The fact that the company CFO is Udaya Seghal, who is a family member and doesn’t have a vast finance background, is also not comforting for me. Given the entire business depends on prudent financial management, I would prefer a seasoned finance professional in this role.

So my entire cash-stress research has been done with an objective to take calculated guess on how worse can D/E get before it improves and can it reach to a level where it will start destructing the business. I took heavy help of "Claude” doing this research so I will attaching the SS and excerpts from my research thread.

The first question I wanted to answer was how all this capex has been funded?

Module capacity went from 450 MW in FY23 to 2.4 GW by FY26 — a 5x step-up in three years. The cell plant (2.2 GW TOPCon, Kosi Kotwan) is the next phase: built from scratch in 15 months, not yet commercially operational, with ₹174.9 Cr sitting in CWIP at FY26 year-end. The total committed capex across module expansion and cell plant since FY22: roughly ₹540 Cr in cash out the door, with another ₹610–713 Cr still to be spent to fully commission 3.6 GW modules + 2.2 GW cells.

The implied capex per year tells the acceleration story cleanly: FY22: ~₹1 Cr. FY23: ~₹6 Cr. FY24: ~₹28 Cr. FY25: ~₹62 Cr. FY26: ~₹266 Cr.

Every phase of this expansion was funded differently.

FY24 — IPO: ₹74.5 Cr. 100% fresh issue, no OFS. Clean. Promoters didn’t take money off the table. This funded the first 1.2 GW module line and caused D/E to collapse from 1.14x to 0.37x in a single year.

FY25 — Internal accruals + incremental bank debt: ~₹99 Cr. The one year where OCF was genuinely healthy (₹68.8 Cr, OCF/PAT ~0.82x). The company funded most of the ₹82 Cr CFI outflow through operations + ₹30 Cr of bank borrowing. D/E held at 0.36x.

FY26 — Preferential issue + warrants + aggressive bank borrowing: ~₹813 Cr combined. This is the big one. In September 2025, they raised ₹260 Cr through a preferential allotment of equity shares and warrants. The remaining ~₹293 Cr came from bank borrowings — borrowings jumped from ₹79 Cr to ₹537 Cr in a single year. Both taps open simultaneously. D/E moved from 0.36x to 0.96x in twelve months.

The promoter holding diluted from 68.76% (March 2025) to 65.9% (March 2026) — not from selling shares, but from new shares being issued to outside investors. Dilution, not exit.

The remaining capex need and whether they require more capital

The total cell plant budget is ₹778 Cr (₹642 Cr original + ₹136 Cr TOPCon upgrade). Unit IV module line (1.2 GW) adds ₹110 Cr. Against that, roughly ₹275–300 Cr has been spent (174 cr CWIP + 100-110 cr estimated equipment advances in Other Assets, this number to be confirmed from the Annual report). Remaining cash outflow: ₹610–713 Cr, concentrated in FY27.

FY27 organic funding capacity: OCF of ₹280–320 Cr (if cell plant margins materialise) + warrant conversion ₹98 Cr = roughly ₹380–420 Cr. Gap of ₹200–300 Cr. That gap gets filled by bank borrowings in the base case, pushing D/E toward 1.3–1.6x or by another equity event (main board migration + QIP) if margins disappoint and OCF stays weak. Management explicitly flagged the main board migration in the investor presentation. The playbook is legible: raise equity at the start of each capacity phase. A QIP is the most likely FY27 event.

For the curious ones, here is the entire thread on the capex forensics: Claude

Now, to conclude all of it, I am going to closely watch the following indicators:

• Leading indicators: I couldn’t be convinced that there is any number that will confidently say business is falling apart. DPO is the one that AI suggested, with the reasoning that the first sign is stretching the suppliers but I am not sold on this.
  The best leading indicator is a qualitative one, closely watch the remaining warrant conversion status ( ~30% Seghal family + ~70% Northstar opportunity fund and HNIs). If the institutions are not converting the warrants and are ready to take the 25% hit (~30 crore) that is a huge red flag.
• Coincident indicators: CWIP / (CWIP + Net Block), currently at 51%, and it should fall towards 15-20% once the cell plant is capitalized into net-block, which is a hard accounting proof of production commencement.
• Lagging indicators: OCF/PAT recovering towards 0.7x, currently at -0.6x. This will be the most definitive signal of the thesis being played out.
  Interest/Ebidta crossing 12-15%, currently at 7%, will be the most definitive sign that the debt spiral has begun.

Looking forward to read the annual reports to get more clarity on the financials and cashflow. I think Alpex is a classic case of “Follow the cash, not profits” and thus it requires continuous due-diligence. All in all, i am extremely bullish (with caution) on this company, it can be a great capital multiplier if patience and prudence is maintained for the next 5 years.

I have concisouly not taken into account the FY20 expansion plans given management has yet to provide more details on the capex requirements. The rough research suggests that solar glass is extremely capital-intensive, if confirmed then OCF and D/E fluctuations will be a constant feature of this stock which is not bad if managed prudently.

Please share views, insights and observations that can help me get better understanding on the capex maths. This is my first time following the capex maths so I might have made some mistakes, I am open to get feedback on the numbers and technique to be applied on this part.