Alpex Solar Ltd - Stunning sun powered performance?

avneesh · August 22, 2025, 7:22am

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:

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.
Solar theme is outdated in the market. It might not attract past valuations.
There is a risk of overcapacity in module manufacturing by FY2030.
Management is trying cell manufacturing for the first time.

Investment Thesis:

Increase in PAT margins to 25% because of backward cell manufacturing.
The company has an ambitious target of 3000 cr topline by Mar 2027.
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.
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 · August 23, 2025, 11:38am

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 · November 4, 2025, 3:41am

Great results by the company

SA24 · November 10, 2025, 6:08pm

Angadlokhande1995 · December 13, 2025, 1:04pm

Alpex Solar – Thesis in 10 Bullets
Structural Tailwind: India’s solar capacity addition remains a long-term structural growth story driven by government targets and falling costs.

Business Model: Alpex operates as a solar module manufacturer with EPC execution, providing partial insulation during pricing down-cycles.

Current Industry Phase: The solar sector is facing overcapacity, leading to sharp module price corrections and intense competition.

Impact on Margins: Manufacturing margins are under pressure; EPC business offers some cushion but cannot fully offset price erosion.

Demand vs Pricing: Demand for solar projects remains intact; the problem is pricing power, not order visibility.

Competitive Position: As an SME-scale player without backward integration, Alpex faces tougher competition from larger integrated manufacturers.

Financial Stress Points: Elevated working capital, volatile cash flows, and margin compression require close monitoring during this phase.

Management Execution: No signs of reckless expansion so far, but cyclicality appears to have been underestimated.

Cycle Optionality: Industry consolidation and exit of weaker players could improve pricing and capacity utilization over time.

Thesis Status: Stressed but not broken — survival, cash discipline, and EPC execution will decide post-cycle outcomes.

AMANDEEPSINHA · December 18, 2025, 4:39pm

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 · December 20, 2025, 1:31pm

Will there be adverse impact on Solar manufacturers like Alpex?

Agastya · December 30, 2025, 10:34pm

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:

Module manufacturer: MNRE said demand only for 30-40GW, domestic supply of 100GW
Module manufacturer: MNRE asked banks to be cautious about lending to sole-module manufacturers due to over supply
Raising Rs. 125cr NCD at 14.75%: 14.75% pa paid monthly; very high. But no principal repayment until 18 months
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.
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
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%.
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:

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.
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).
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.
Against risk of implementation: Management has delivered on its targets in the past, engineering team is trained in China and Taiwan
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.
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.
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.
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