Buy Vikram Solar Ltd for Target Rs.323 by Elara Capital
Integration to drive growth
Vikram Solar (VIKRAMSO IN) reported a strong Q4FY26 , driven by capacity ramp -up, with revenue increasing 21.7% YoY to INR 14.5bn, although EBITDA margin declined 300bp to 16% , due to higher raw material s and employee cost . PAT grew 21.9% YoY to INR 1.1bn. Production and sales increased sharply to 971MW and 999MW , respectively , during the quarter, while FY26 shipments rose 76% YoY to 3.3GW , reflecting strong execution momentum. The company added 1.9GW of new orders during the quarter taking orderbook to 8.2GW, comprising 87% domestic and 13% export orders, pr oviding strong multi -year growth visibility. VIKRAMSO currently operates 9.5GW module capacity and plans to scale this to 15.5GW by FY28 alongside commissioning 9GW cell capacity in FY27 and expanding it to 12GW in FY28. Management is aggressively transforming into a fully integrated renewable s manufacturing platform via planned 12GW wafer and ingot capacity and 15GWh BESS expansion by FY30, with wafer and ingot investments estimated at ~INR 37bn. We retain Buy with a TP of INR 323 on 8x FY28 E EV/EBITDA
Strong quarter driven by capacity ramp-up:
: Revenue from operations increased ~ 21.7% YoY to INR 14.5bn , driven by higher shipments and ramping up of commissioned facility. Cost of materials rose 37.7% YoY to INR 10.5bn. Employee expenses surged 38.7% YoY to INR 486mn. EBITDA was up 4.82% YoY to INR 2.3bn. EBITDA margin declined 300bp to 16% in Q4FY26 vs 19% in the p ast year. Finance cost increased 17.4% YoY to INR 566mn. Depreciation climbed 35% YoY to INR 571mn. Other income was up to INR 182mn vs INR 75mn in the p ast year. PAT rose ~ 21.9% YoY to INR 1.1bn.
Robust orderbook provides growth visibility:
Production increased 84.6% YoY to 971MW in Q4FY26. Sales surged 40.5% YoY to 999MW in Q4FY26. It has added 1.9GW of orders in Q4FY24. Orderbook stands at 8.2GW , providing multi -year visibility. Orderbook comprises 87% of domestic orders and 13% of export s orders. Shipments rose to 3.3GW for FY26, up 76% YoY , from 1.9GW in the p ast year
Expansion planned across verticals:
Module capacity currently stands at 9.5GW. The company plans to expand module capacity to 15.5GW by FY28. It plans to operationalize 9GW of cell capacity in FY27 and scale it up to 12 GW in FY28. It is transforming into a fully integrated firm with backward integration of 12GW wafer and ingot planned by FY30. Management has planned a 15GWH of BESS by FY30. Planned wafer and ingot investment is estimated at ~INR 37bn.
Retain Buy with a TP of INR 323:
The company is one of the largest domestic solar PV module producers, supported by an aggregate installed capacity of 9.5GW . VIKRAMSO’s upcoming investments emphasi zed on backward integration, with a push into solar cell -making to secure upstream control and enhance cost competitiveness. The company plans to add 6.0GW module and 12.0GW cell capacity by FY27. We expect a revenue CAGR of 53% during FY26 -29E, with an EBITDA CAGR of 44% and a PAT CAGR of 38% . We retain Buy with a TP of INR 323 on 8x FY28 E EV/EBITDA . We revise our earnings up by 32% in FY27E and 6% in FY28E. We introduce our FY29E earnings.
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SEBI Registration number is INH000000933
