This data was taken from DCR verification portal and it is the capacity sold in the market till now which needs to be registered with a unique Cell/panel number/DCR certificate number. So that It’s Domestic content can be verified.
It is not the nameplate capacity/annum. It is the actual output sold in DCR market. As the cell plant is running at 90% capacity, the remaining output till Oct could have been sold to non DCR market. However, it is an assumption.
This data is updated in DCR portal till 07th Oct. So, as they sell under DCR category, they will keep updating the same. I hope it brought clarity.
Let us look at the cheapest Solar stock today
#websol
In short , the co is into PV Module sector for long time, they had obsolete tech so they built everything from scratch in 23-24.
They installed a 600 MW Cell line and a 550 MW Module line. (Module line started from 1st August 24)
Latest AR says that they plan to increase cell capacity to 2.4 GW by FY 27.
Making a cell is much more complex as you have to balance thermal, wet chemistry and Machining process (wafer to cell) all together. That is why the time to establish a cell line is much longer and costly.
So let us look at what #websol is doing and where it is headed.
The co imported
1.46 cr wafers in Q1
1.3 cr wafers in Q2
the unit price per wafer:
Q1: 18.4 Rs.
Q2: 12.9 Rs.
So the raw material wafer price was 30% less in Q2 vs Q1.
But this is not all. As we know that co started making module from 1st August. Since the unit is in SEZ, any stock transfers will also be reported. And just like clockwork, we see the same. #WEBSOL has manufactured 58 lac cells in Aug and Sep.
Now per cell selling price in NON DCR = 99 rs
per cell selling price in DCR= 160 rs
So let's say #WEBSOL is selling every cell as NON DCR which means that its revenue is 57 cr per month for Aug and Sep. This is because their solar cell expense is 19 cr per month so 3x for revenues. (19*3=57)
In Q1 it did 112 cr of revenues so 37 cr per month which can be assumed the same for July 24.
So adding all 3, the revenue for Q2 should be 37+57+57= 150 cr
Now, we know clearly that the co did 20% PAT margins but with input price of wafer down 30%, this PAT margin should expand. Also the margins between wafer and cell and now cell to module will be added.
As per my recent talks with Alpex in REI 24, the PAT margins are 50-70% but I think its ok to consider 30% for now.
So co will do 45 cr of PAT in Q2. Even at same run rate every quarter, the PAT for full year will be 170 cr.
PAT: 170 cr
EPS: 40
Forward PE at CMP= 25 (yes just 25)
All other solar module cos are trading at a much higher PE. But #Websol is not just a solar module co, it is a wafer to module so should command a higher PE than pure play Module cos.
But Wait, why do I assume a flat Revenue per quarter. As i said before, Making a cell means fusing thermal, wet chemistry and machining processes together.
Centrotherm is a leader in the thermal process and what we see from the data that in August and September, #WEBSOL has imported a lot of machinery from Centrotherm. I am not an expert but google search tells me that these machines are required for setting up a solar cell line.
Google search also tells that #WEBSOL has asked for a second 33kv connection. Tender for which was floated in September 24. A second 33KV connection could also mean the same- they are expanding a new cell line.
wbsedcl.in/irj/go/km/docs…
All this put together, for FY25-26, Websol should be able to comfortably do 1.2GW cell and module lines.
That makes them valued at a just a PE of 12 by end of FY26. That is also the time when ALCM (approved list of cell manufacturers) will come likely hence giving even further boost to margins.
Imagine, even on existing setup, I am assuming all the cells go to NON DCR applications. If it goes to DCR applications a 100% then the PE shrinks to just 7.
1.2 GW cell and module line
Cell cost for 1.2 GW monthly- 38 cr
Monthly revenues 190 cr (38*5)
yearly revenues =190*12=2280 crores
PAT: 30% margin or 685 cr
EPS:160
PE at CMP= 1050/160=6.5
Abhi 7 ke PE par kaunsi solar cell/module ki co milti hai
Hi Apoorve, Thanks for sharing this here. I would like to share my thought on this as below;
Kudos to this thesis posted on twitter handle. My compliments to them . However, the data should be taken with caution before processing into our brain. I could find the joy and unnecessary enthusiasm in the words which is common for anyone who come across a undervalued company for the first time. It sounded good till first half of the thread where the Annual PAT of 170 Crs. was estimated with solar cell production data which is almost close with many of our conservative estimation ((600 MW*90%/12)*9 months))1.1 Crs. NPM 25% + Q1 PAT 23) = 134 Crs, but the second half started sounding more of a fin-fluencer/influencer tone to me. Hence i ignored the second half of the thesis. The reasons are as follows;
Annual PAT of 170 Crs. is with an assumption of 30% NPM which may not be sustainable as input wafer cost is decided by China weekly (Mr. SL Agarwal statement in recent AGM) and not in control of Websol. So, taking 30% NPM straight for the whole year is misleading. As it is a commodity, price fluctuation is part of the business.
The Twitter handle cited import data of Centrotherm machinery components. Firstly, Those are not looking like main equipments, those are sub assemblies/components/parts which are required for regular preventive maintenance and replacement under warranty for failed components. (As module line production is still under ramp up, the possibility of component failures and replacement is normal.)
Secondly, management clearly informed us that the expansion is still under planning and they will inform us once it is materialized. They don’t have enough area to expand at the Falta SEZ. Hence, Company already announced that the second phase of expansion shall be implemented at a new location in Odisha under a subsidiary company namely Websol Kalinga green energy./suitable name etc. The proposed company is not registered in MCA website till now.
Developing a 1.8 GW cell line in Phase-2 in a virgin land outside their existing state without SEZ tax benefits is a humongous task for Websol as the fund requirement would be more than 1000 crs. (DRHP of Vikram, Premier, Waree has machinery quotations from Chinese manufacturers but Websol traditionally uses Centrotherm germany equipment’s which is costlier than Chinese.) I am personally expecting some US/Europe based company collaboration for 2nd Phase expansion.
In one of the convertible warrants meeting, Mr. SL Agarwal was reading the snippet given to him like “we are expanding the cell line by another 50% in Falta SEZ” i.e., 300 MW in addition to 600 MW. I even recorded the video but there was no follow up official intimation to BSE/NSE. or in the Q1 results. So I ignored it as a slip of tongue. The second 33 kV line is true as twitter handle provided with the WB Govt. tender proof. However, it is a replacement for old line or for expansion purpose is not clear.
The most haunting question in investors mind is whether Websol will self consume their in house cells for module line or use the outsourced cells?. Websol registered Solar cells of 242 MW till Oct in DCR portal. So, there is a possibility of selling in house Cells to DCR market and using the outsourced cells for module line. Twitter handle’s thesis with NPM of 30% for both module line and cell line will fail in big way if they self consume the inhouse cells. Projected revenue of 2280 Crs will become almost half to 1200 Crs. Hence, need further clarity from management.
If they sell Cells and modules separately in the open market then module may not qualify under DCR category as min. of 55% of domestic content is required to qualify as DCR. Further, the best NPM of module only players are around 10-13% only. So in anyway, Rev of 2280 Crs. and PAT of 685 Crs. with a assumption of 30% NPM for 1.2 GW cell and module is a distant dream with phase-1 alone. It is misleading. Needs clarity from management.
However, Twitter handles help in taking the company to many retail investors. With visibility, the buy/sell pressure comes. I hope that was the main motive of that twitter thread. My best wishes and compliments.
Thesis and Antithesis should exist together to avoid biased information and to take neutral informed decision.
All the above points are all my personal opinion based on the publicly available information limited to my knowledge. I am not an expert and I may be completely wrong. Request others opinion and feedbacks to evolve together.
No. The 1.1 Crs. Is based on the March 2024 price but there may be an increase in the price from April 2024 as the cell efficiency was improved to 23.2 % from initial 17%.
However, company announced in May 2024 press release that they tied up with various buyers and blocked 80% of the FY24-25 capacity for DCR market.
So, my understanding is the price is fixed at the time of purchase order. Hence, i used 1.1 Crs/ MW. If price escalation was accommodated in the PO then the Rev and NPM will change accordingly.
Moreover, The plant operated at 75% capacity in Q1 as per the press release. Websol reported a revenue of Rs.112 Crs for Q1, my calculation is ((600/12)*75%*3))*1.1 = 123.5 Crs. Which is just 10% higher than the reported value. So, more or less the assumption is okay.
Anti- Dumping Duty on Solar cells imported from China PR region based on the request of FS India Solar Ventures & Jupiter International Limited. The Commerce department initiated the investigation on 30-09-2024 and requests information and submission from interested parties to determine the existence of dumping on or before 30-10-2024.
If the investigation outcome is positive then it should benefit the Domestic manufacturers of Solar cell. Websol is a SEZ unit. so, It is technically not a domestic industry. However, they are eligible to sell in DCR market and ALMM for Cell is expected by April 2026. So, more good things are waiting for Indian Solar cell players.
But the issue with Solar Cell is it is highly complicated tech. It is difficult to master quickly. Scaling up will take a long time as Cell breakage is very high in addition to achieving desired efficiency. Websol is one of the oldest players in India mastered this technology early. Premier is also good to some extent. New players who are still in planning stage like Waaree, Vikram, etc., and all other Module only players would find it difficult to scale up the production with desired output.
So, achieving a handful of domestic cell production by April 2026 is a big question mark. We have to wait and see as how this industry will evolve in FY26.
On the other hand, Any positive outcome will impact the margins of Module only players and EPC companies as their input cost will increase equivelent to ADD %.
Just my opinions. I may be completely wrong. Opposite views are welcome.
Update from management clarifies the above mentioned point No. 5. Addition of 600 MW cell line at Falta SEZ. So, It is not a slip of tongue.
Good decision as they can implement it at an economical cost with shorter lead time.
Extrapolating numbers from premier energies presentation
qtr cell revenue at 450crs * 4 = 1800 per year on 2000 mw cell line, i.e 90%
can use same as its also selling in domestic mkt and under DCR
so FY26 websol could do 1200 mw * 90% = 1080 rev , 20% pat = 216 crs
similarly for modules can be 550 mw * 90% = 500 * 10% pat= 50 cr
total pat = 216+50= 266 crs
these are reasonable assumptions
so PE comes at around 24.5
As per the Q2FY25 conference call of Premier energies “Approximately 50% of the company’s cell capacity is for captive consumption in its own modules”. So, I think 450 cr of revenue for cell in the presentation is only for the 50%(i.e. 1 GW/annum) that they sell in the market. Please check.
Websol enlisted another 40 MW in DCR Cell category. Now, Total enlisted capacity stands at 282.35 MW till October.
It has to be noted that from 1st December 2024 onwards, any solar PV module, whose DCR credentials cannot be verified through the DCR verification portal, shall not be accepted under MNRE’s CPSU Scheme Phase-II, PM SurYaghar: Muft Bijli Yojana and PM-KUSUM.
While this could be the reason for the fall though I doubt it, I don’t see this as a red flag. What would anyone gain by publishing wrong info like this, as they very well know that they will have to publish a corrigendum sooner than later. Hoping that the fall is in reaction to Trump’s policy and like the other solar stocks have shown reversal Websol too will be back on track by early next week.
This cant be the reason for fall.
There are many other indicators to gauge health of financial.
Percentage growth in profit. MCAP/Net Profit will also give the same data as Share price / EPS.
I would be happy if the reason for fall is what you are claiming…because this is im-material
. However, the data should be taken with caution before processing into our brain. I could find the joy and unnecessary enthusiasm in the words which is common for anyone who come across a undervalued company for the first time. It sounded good till first half of the thread where the Annual PAT of 170 Crs. was estimated with solar cell production data 
The second 33 kV line is true as twitter handle provided with the WB Govt. tender proof. 
