what’s the full form of p+w+c+m
Time of higher margin in Solar cell is gone and may come back only if china and other countries stops to supply its tech and make it a IP driven industry. Also fast changing and improvement in cell mekes one do huge and gradual investment in new/improved wattage cells. That’s why i think the fully integrated player will make more money for shareholders then standalone biz holder.
Just FYI, USA is preferring to take non Chinese solar modules/ cells , read about waree solar , also these mono perc and topcon are the latest technologies in solar cell
Polysilicon + Wafers (Ingots) + Cell + Module. This is the supply chain of Solar PV modules. Websol is having expertise in stage 3 and 4. i.e, Cell + Module (C+M) and sources Wafers from their loyal suppliers.
Websol used to procure raw material (Polysilicon and Wafers) from Chinese manufacturers before Covid-19 which dented their margins. However, after Covid-19, Websol has increased their procurement from Indian manufacturers drastically.
An extract from Annual report
Start:
Around 60% raw materials are sourced from Gujarat, consuming ten days in transit and reducing working capital outlay.
Around 80% of the suppliers have been associated with the Company for more than five years.
The Company purchases quality raw materials as per IEC and US standards.
The Company’s research and development team has been endeavouring to reduce the consumption of raw materials
The Company added three suppliers for silicon wafers, strengthening procurement
economies. The Company moderated its inventory of resources (gas and chemicals) where availability was assured. The consumption of silver paste declined 15% following changes in screen design and higher cell efficiency.
End.
Recently due to China+1 sentiment, the Chinese manufacturers have not increased their module price but increased Polysilicon and wafers price instead. This is again a positive for websol.
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There is not much clarity in this announcement. However, comfort letter is is not a legal document and it has no weightage with respect to financial obligation. (refer Geetanjali Gems Vs PNB bank case).
It is a clear loan against property of promotor. so, it is simply a cash needs of promoter but where will this cash be used is a question. if it is used for factory building construction or renovation purpose then it is a good development.
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As we speak, a board meeting at Websolar is going on.
34c1f478-791b-4f5e-9148-4d27c4ab4271 (1).pdf (414.3 KB)
Will be interesting to understand what’s the outcome of the board meeting and details of the loan from IREDA ( which by the way is a great great news and relief ) !
A good read on challenges ahead for Solar module manufacturing ecosystem of India from a well established China. Websol’s COO comments are also captured in this article.
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Indias-Photovoltaic-Manufacturing-Capacity-Set-to-Surge-April-2023.pdf (1.1 MB)
Are you new to the solar PV manufacturing ecosystem?. Are you looking for the drastic development’s planned in this space for next three years?. Are you really interested in knowing the tiny space occupied by Websol?. Do you want to estimate the growth opportunity available for Cell manufacturers’ in India?. then this report is for you. though i am sharing here late, it is not late at all. Spend some time and get benefitted. credits to the research team.
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Updates on Websol
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Loan received from Ireda 179 cr
2 . Timelines uploaded
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Preferential raised at 112, 36Lakh shares
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Strong Charts – Monthly looks set to breach multi year high of 172
Summary of Websol for someone new
Websol is mainly engaged in solar cell manufacturing company located at Falta SEZ in Kolkata….company was established in 1992 and public issue by 2002
Company had very rough years till 2016……after safe guard duty implemented company managed to come out of BFIR and wipe out all most all the debt of around 150cr or so in past 5 years
Company as on 2023 March has debt of only 27-30cr
Company’s plant was closed from 1/4/2022 due to old technology plus custom duty on solar cell and module
In March23 company got IREDA loan of 179cr for 1st phase of 600MW cell and module plant
Plant is expected to arrive by September and commercial production is expected by December
New plant is with either mono perc or topocon technology
Company is going for 1.8GW solar cell manufacturing by 2024 end
This is the only listed company manufacturing solar cell while solex Waaree and others are mainly in module manufacturing or EPC companies and planning to go for cell manufacturing in coming years
Websol has very good technical team which will keep company ahead of their competitors
From the first phase we expect around 500cr plus revenue from cell with EBITA in the range of 15-20%
From full expansion of 1.8GW solar cell manufacturing we expect 1500-1600cr revenue and around 100-120cr NP with diluted equity of 50cr
We had not calculated any module manufacturing revenues and PLI benefits in our estimates
Solar cell is heart of solar module and it’s having very good EBITA margins of 15-20% while module manufacturing EBITA is 5-8% only
This is just the general view of the company.
Even at 1.8 GW we can achieve turnover of 1500-1600cr and EBITA of 300-320cr and PAT of 110-125cr which means EPS of 20-22 with diluted equity of 50cr
Company has carry forward losses so no tax burden for at least 2-3 years plus here I had not calculated any PLI benefits or subsidy benefits and plant efficiency of 80%
This is very good for turnaround company to achieve in next 2 years and if they achieve above figures then 30-40 PE will be given……rest time will tell
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Unless I overlooked, I didn’t find updated timeline for phase-2 in all recent announcements. Phase-1 seems to be going on with some delays, now pushed towards end of this CY. Does anyone has more insight pls?
Phase-2 will be funded by cash flow generated from Phase-1 as per Management comments. So, Phase-2 construction should start rolling from FY25-26 onwards (if Phase-1 generates positive cashflow during FY24 & 25). So, It is a two to three years story from now. One should not forget that Cell capacity of India will be substantial and sufficient to meet the demand by FY26.
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This will be a bad move if materializes in future. Already a thin margin business. Taking up EPC just for forward integration which has many socio-political variables which are beyond company’s control would further reduce the margin. The management should rethink.
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Studying this company, presume the above is a snapshot from their recent AR, I felt that foraying into EPC was a conscious decision by the management to de-leverage them from the impact of varying solar cell prices and their dependence on the government policies ?
The export markets mainly USA are trying to become self sufficient with PV which might not help Websol’s case in the long run. Your thoughts on this ?
- Yes. the snapshot is from recent AR.
- Foraying into EPC may not be a conscious decision as they are just considering it for the future. As of now, there is no roadmap, No experience and No margin. We are very early to say that company will take it up as a profitable business. However, if EPC projects taken up in foreign countries like Europe and US regions then there is a scope for better returns. This is my personal view.
- Any country would like to be self sufficient provided money power and Economy growth potential, so, we, Europe & US are trying to become self sufficient by installing and improving domestic capacities. However, the projected figures of gap between US cell capacity and module capacity is 13 GW by 2030. Websol being a 100% EOP situated in SEZ, should not face any issue in finding buyers for their cells at least for next 07 years. its all depends on how quickly the capacities are built to production. We have to wait and watch.
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Wrong assumption. EPC is a higher margin business, cell and modules procurement will be sorted and it will also open up O&M in future
Management must have given it a thought
Websol Energy Systems - Flash Note - 07 Sep 23.pdf (199.6 KB)
Very good development, Flash Note by B&K …
finally some institutional coverage starts.
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It will be partially through internal accruals I guess. We can’t wait for 2 years to kick start phase 2.
2.4Gw by 2025 is already set as target. My view is that every 6 months 600 mw will be attempted after the commencement of Phase 1 by December
So Mid year 2025 we should be looking at completion of phase 2.
This will allow in phased deployment of the second leg of 1.8Gw of cell expansion and a progressive increase in cash flows
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I would like to be wrong here. Lets wait and watch.
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