Thank you, Atharva. Good morning.

On behalf of ICICI Securities, I welcome you all to the Q1 FY27 earnings call of Premier Energies Limited. Today, we have with us from the management Mr.

Chiranjeev Singh Saluja, Managing Director; Mr. Nandkishore Khandelwal, Chief Financial Officer; and Mr.

Vinay Rustagi, Chief Business Officer. We'll begin with the opening remarks from the management, which will be followed by Q&A.

Thank you, and over to you, sir.

Thank you, Mohit. Am I audible?

Yes, sir. You may go ahead.

All right. Good morning, everyone.

Thank you for joining us today for our Q1 earnings call. I am Chiranjeev Saluja, Managing Director at Premier Energies, and I am joined today by my colleagues Nandkishore Khandelwal, Group CFO; Vinay Rustagi, Chief Business Officer.

With the ongoing wars, commodity price inflation, and shifting trade flows, the environment around us has been quite unpredictable. I am pleased to say that we are navigating this period successfully, with disciplined execution, combined with investments in scale, technology, and people.

The company has reported another record quarter of revenue and profit growth. Our total revenue has increased 34% year-on-year to 2,508 crores.

EBITDA and PAT have grown by 27% and 53% to 759 and 472 crores, respectively. The profitability margins have been largely steady at 30.3% and 18.8%, respectively.

These results include consolidation of our 51% stake in Transcon. The company reported excellent results in the quarter, with a revenue and PAT of 110 crores and 18 crores, respectively.

EBITDA and PAT margins in the transformer company came in at 27% and 17%, respectively. Amongst key business updates: our 5.6-gigawatt fully automated solar module plant at Seetharampur is operational; the 7-gigawatt TOPCon cell line is in advanced stages of commissioning, with trial runs expected to start later this month; our operational cell plants in Telangana delivered a record capacity utilization of 92%, showcasing our all-round excellence in plant operations; we won new orders totaling 3,011 crores for cells and modules, taking our total order book to 15,000 crores, including transformers.

The overall business outlook for solar sector continues to be positive and encouraging. Power demand this year has been exceptionally strong.

Solar demand has been strong too, with nearly 12 gigawatt of capacity addition in quarter one itself, with great momentum in the PM Surya Ghar Yojana and KUSUM schemes. On the enabling resolution taken by the company, we would like to clarify that we are in a hyper-growth phase of this industry.

During this phase, it is important that we have flexibility to expedite organic growth path or capitalize on any inorganic growth opportunities, which may help maximize shareholder wealth. As a result, we will continue to take such enabling resolutions every year.

As we speak, I can confirm that there is no concrete plan to raise any primary capital in the near future. Over the next few quarters, as new cell and transformer capacities come online, a major step is expected on the back of operating leverage, both in operations and financial performance of the company.

This will help us maintain industry leadership position in scale, technology, cost of manufacturing, and continue to deliver industry-leading margins. We are very confident about future prospects of the company.

Thank you. We are now open for questions.

Hi, sir. Thank you for the opportunity, and congratulations on a strong set of results.

I must say the presentation

I think

quality is very good. A lot of details so extremely helpful.

Sir, I just want to pick your brain on a couple of things. One is I think on the data that you provided in the presentation on rooftop and PM-KUSUM demand, how much should we assume or estimate the DC overloading for PM-KUSUM?

Hi, Apoorva. This is Vinay here.

Hi, sir. Yeah.

Hi, Apoorva. In KUSUM, there are obviously three components, as you know: A, B, and C.

Most of the installations are coming in B and C. In B, which is the solar pump part, the overloading is basically 1.

In KUSUM C, where basically most of the projects are ground-mounted projects in sizes between 2 to 10 megawatts, sometimes larger, the overloading is between 1.3 and 1.5, as we usually see. On a blended basis, I would expect the overloading to be about 1.2, 1.25.

Understood. This 2 gigawatt of demand in this quarter would be about 2.5 gigawatts for modules?

That's right, yes.

Roughly total demand for both these segments would be around 6 gigawatt on a quarterly basis. How do we see this for the remaining nine months, sir?

I think there is actually great momentum in both the schemes, as you can see, and that is what we're trying to show you in these charts. In Surya Ghar Yojana, there is a kind of a month-on-month increase, and we are expecting the average over the next nine months to be about 1.2 to 1.3 gigawatts.

In KUSUM, the government has already given it a deadline of March '27 for implementation of all the ongoing projects. Actually, we are expecting a huge step-up in the KUSUM scheme.

I would expect the installation over the next nine months to be sometime between 6 to 8, possibly higher than 8 gigawatts.

Roughly around, say, 12, 13 gigawatts in the rooftop space and maybe around 8 gigawatts in this. Roughly around 20 gigawatts for the next nine months.

Yeah. When I said 6 to 8, I was talking about the AC numbers.

If in DC terms,

it'd be around 23, 24 gigawatts in total.

That's right, yes.

Okay. Then, sir, any other segment also coming in for DCR?

Do you say we expect any demand from C&I after the ALMM deferment or from the IPP business?

No, I think the remaining demand will mainly come from the C&I segment. The government has said that any projects commissioned from 1st January onwards will have to use DCR modules.

The demand will start arising from the last quarter of this year, which is basically October, November, December, and that itself should also be a sizable volume for DCR market.

Sure, sir. Understood.

On the second bit, sir, I want to understand how much of capex did we incur in this quarter, and on the solar business?

The total capex in the quarter was about 1,500 crore rupees. Bulk of the capex was incurred on solar projects, basically both Seetharampur and Naidupeta.

Then the remaining was incurred on Transcon, 250 crores.

Okay. So 1,250 crore was in solar?

Yes.

Okay. Sir, lastly, if I may squeeze in just one more question on this mix change that we are seeing now that our cell capacity is ramped up.

Do you see this sort of maintaining this 25% revenue in future from cell sale, or should more of this shift towards the DCR sale?

I think over a period of time, of course, the share of the DCR modules will go up. The other part of the picture is that non-DCR demand is going to continue over the next two years.

We will decide depending on the mix of orders that are coming our way as to how much cells should be sold in the external market. We still have a pretty good pipeline of orders for cell sales over the next 18 months.

I think that will continue. The share of DCR over a period of time, I would say over the next 18 to 24 months, is expected to go up steadily.

Sir, on this one, I just wanted to sort of double-click a little bit. Even if we assume that in modules on the conversion process, we earn a margin of, say, a rupee or rupee and a half per watt peak, why would we sell just cells and probably leave some profit pool on the table for others to capture?

Why not capture all of it?

Let me answer this, Apoorva. What you're saying will happen gradually.

We have contracts signed where we need to supply cells. These were signed sometime back, but as we progress, you will see more and more DCR module and lesser amount of cells going out.

Once our cell line gets operational, we are almost 10-gigawatt cell and 11-gigawatt module, which would mean we will not have a lot of cells to sell.

Sir, safe to assume that the order booking we did this quarter was mostly modules?

It is, yeah. It is gradually moving towards more of DCR modules than cells.

Understood, sir. Thanks a lot.

All the best.

Thank you.

Hi, sir. Thanks for the detailed presentation and the split between solar cell, module, transformers.

This is quite helpful. Sir, firstly, the Q1 order momentum was strong, the order inflow.

Just could you give some bit of insights now post the announcement of extension of the ongoing C&I projects until December, how are we seeing that the inquiry pipeline or the momentum in July and August? If you can just give some bit of qualitative guidance here.

Our DCR order book was quite stable, quite strong, coming in every quarter. Post this extension of ALCM, we have seen a sudden influx of large orders of non-DCR modules, which has been kind of a positive for us because as we speak, we have a little bit of extra module capacity for the next two to three months.

It has been kind of a big positive for us that while our cell line comes up, we had module line sitting for the next quarter, and then that's really now getting busy because of the influx of the non-DCR demand.

Understood. On the DCR, any color there on the DCR side of it?

DCR is sold out, we are selling out only for FY28 now.

Understood. Got it.

Secondly, sir, just as a continuation, the revenue mix from cells during 1Q was about 24-odd percent, right? The same in our order book is around 58-odd percent, right?

Any sort of margin guidance that you can give over the next 15, 18 months, as your business mix improves, how can we see the margin trajectory from the current 29% odd operating EBITDA margin? Kunal,

we are quite positive on the outlook for margins that we will be able to protect our margins. The new cell line coming up is going to give us a lot of operational leverage.

As you can see, the transformer business is also throwing up healthy margins. DCR mix is changing from non-DCR to DCR.

As far as we are concerned, we have been consistently updating that we will continue to deliver healthy margins, industry-leading margins, and protect what we are delivering as of now. The order book has similar margins as to what we're delivering.

Understood. This is very helpful, sir.

Thank you so much. I'll fall back in the queue.

Hi, sir. Thanks for taking my question.

Just on this ALM extension, given the ramp-up in the DCR cell capacity, we are still not seeing too many players who have commissioned also in last one year. The utilization is not even going beyond 20%.

The new capacities, I wanted your view how you are looking up the ramp-up. In that scenario, if any C&I player, do you think he has a mindset of not blocking the capacity at this point in time?

My question is, rather than deferring the demand, don't you see the demand coming forward because DCR capacity itself is not available? I just wanted your view on that, number one.

Number two, just what Kunal asked on the margins, given the DCR mix going up on your execution, because you yourself said you're sold out, 29%, 30% margin, you think it's sustainable for next two to three years?

All right, Nitin. Thank you.

To answer your first question, see, the view on the market is expected to be favorable throughout FY27 and '28. Demand is very strong, right?

We have a constrained supply situation. New capacity, as we have seen, they're taking longer than expected to come online and longer than expected to even ramp up.

This is what we are seeing in the last 12 to 18 months. The C&I clients are very selective on whom they want to work with.

They look at the size of the balance sheet, they look at the size of the plant, the automation, advanced technology, proven track record. We believe, and we are seeing this, that the C&I players are blocking capacity for FY28 today.

They are not waiting or they're not deferring. We have, in fact, signed up orders with C&I customers which are going into FY28.

That is the answer to your first question. On your second question on margins, we have consistently informed that the margins of 29%, 30%, plus minus 100, 150 basis points, we will be maintaining.

This is for the simple reason that our 7-gigawatt cell line is coming up, our transformer capacity is growing almost from 4 GVA to 16.25 GVA. By FY28, we have ingot wafer lines coming up.

It is more of backward integration and scale, which Premier is working on. We are quite confident that we will be able to maintain healthy margins.

Coming to the transformer business, can you give us some guidance where you're seeing because you're 16 GVA going to 64 on the higher side, is also very margin-accretive because of what other industry player are reporting. In your next, let's say, FY27, '28, where are you seeing this revenue ramp-up for transformers and the profitability?

I think Vinay will take this question, please.

Yeah. Hi, Nitin.

Nitin, as Chiranjeev just mentioned, in the transformer business, there's a huge step-up in capacity coming forward. There's also a shift towards the more lucrative HV and EHV segments, which is coming up.

The company is also quite aggressively now looking at export business, which seems pretty large, particularly I would say North America, Europe, and even Africa. I think on the whole, given the ramp-up in capacities, we are expecting the business size to largely, I would say, treble over the next three years.

Profit margins historically across the cycle for the transformer businesses have been about 15% in terms of EBITDA and about 8% to 10% for PAT at the PAT level. We expect that our margins should be slightly ahead of this given the low cost base of the company and all the levers that they've got in place for growth as well as cross-synergies with Premier.

Just because your capacity is coming up, you've reported 100 crore, which is just one month, 600, 700 crore revenue is doable in this year, and then it should go towards what, 1,300, 1,400 crore next year? Is just the ballpark?

I think the initial ramp-up after capacity expansion is usually a little bit slow because of the time it takes to get all the products certified and type-tested and start getting orders from the clients. In general, I would say our revenue outlook will be slightly south of what you said in the current year.

Then, like I said, over the next two years, it will obviously ramp up quite substantially. Then, last year the company had done about 400 crores of revenues.

Over the next three years, we expect this to be more than triple of that level.

Got it. Thank you very much, team.

All the best.

Thank you, Nitin.

Yeah. Hi, sir.

Congratulations for another set of results and very strong execution. Just one question on BESS.

Is there a thought to tie up with some technology partner and backward integrate once you start the assembly? Is there any thought around that?

Yeah. Good

morning, Mayur. Thank you.

On battery energy storage systems, we have already acquired the land, and construction started. We are looking to partner with a technology partner for the containerized solution.

We are going slow on this because we are also waiting for guidelines from the government on how the non-tariff barriers project is going to take over on the BESS segment. There's a draft guideline which was sent out.

We are waiting for more details from the government side to look at further expanding into BESS manufacturing. Our BESS span of 12 gigawatt, 6-gigawatt Phase 1, is already underway.

Construction is started, and technology partner would be, I think, finalized in the next two to three months.

Next step, is there a ambition to also get into cell manufacturing for BESS in future?

I would say there is, but at the appropriate time.

Okay. Perfect.

Our focus now is on ingot and wafer now. Got it.

Lastly, 7-gigawatt new capacity, is it fair to assume that the revenue will start coming in from, say, November, December of this year?

We are actually targeting the first set of revenue to come in September.

September. Okay.

Then, just like you have ramped up the TOPCon 1.2

Yes, it'll take time to ramp up. I'm saying the first set of revenue would come in September, but if you talk about line reaching close to 50%, 60% utilization, would be November.

March quarter, we can assume around 60% kind of utilization level from this new facility?

We are targeting at least about 70.

Okay. That means March quarter would imply almost more than 2x of the current cell production.

If margins and yields remain at these levels, that's the way we should look at it.

Yes.

Perfect. Thank you so much, sir.

All the best.

Thank you.

Thank you for opportunity. My first question is related to the module business.

As you had highlighted in the call that there is a influx of non-DCR, is that the reason why our overall realization on the sequential basis on the lower side?

Non-DCR business is not profitable as we speak. We can see this in the industry that the non-DCR business, because there is about 250-odd gigawatt of module lines, and the entire demand in India is about 60 gigawatt, out of which almost about 30 gigawatt is DCR.

The non-DCR demand being 30 gigawatt and capacities being over 200, there is a serious situation over there. Non-DCR business is not profitable as we speak.

It is only that if you have more capacity of module, you would want to run your line rather than keep it shut. The business is moving towards DCR module.

This influx of non-DCR orders which we have got in this quarter because of government extending up to December, we have got slightly better prices compared to last quarter because everybody is in a rush to commission and connect before December, actually targeting November. There is a slight increase in margins in this coming quarter for non-DCR business.

In the long run, if you have more of module capacity and less of cell, then you are in trouble with the module capacity. If you have a pure-play module manufacturing, then

Yeah. Yeah.

Got it, sir. Whatever the orders we have received, especially in the module, that's largely is of a DCR?

No, of course we have DCR orders which are coming in every quarter. We spoke about an influx of non-DCR order because of this five months extension.

Yeah. Also just to clarify that's in the call you had also highlighted that's the whatever the order book you have is largely to with a DCR module.

If I look at your cell number as well, there is a good growth of order inflow in the cell as well in this quarter, if I look at Q4 to Q1. If you can highlight how has been the pricing for those cell orders especially and the timelines?

There is a little bit of a difference. The module orders are for this financial year, but the cell orders go into FY28 and FY29 also.

In terms of pricing, most of our cell pricing which are long term is variable. Wafer is variable, silver is variable, and so is the exchange rate.

Pricing is more or less been stable on the solar cell side, that is the Mono PERC cell. TOPCon cell, we don't sell.

We use it for our own consumption because as of now we do not have a large capacity of TOPCon. Once our new capacity in near to Tirupati starts off, we have some contracts for supplying TOPCon cells.

The prices are quite stable, and we don't see any dilution in prices over the last quarter to this quarter.

Just to further on this question, the way forward how we will see this order book? You are going more towards a DCR module versus the cell orders, and whatever the cell because that there is a good order book of cell actually you have.

The way forward how we will look at order inflow? In the cell to continue, or you are more inclined towards a DCR module order?

More towards DCR module because once now our module line has come up, the 5.6 gigawatt, our focus will be more orders towards DCR module.

See, there's just one thing I want to add to that. Yes, there is a large percentage of order book which is coming in from cells, but most of those orders are distributed over a long period of time, over FY28 and even stretching into FY29, whereas bulk of the module orders are for delivery over the next six to nine months.

If you look at it on a total basis, the cell orders look very large. If you were to compare it on a quarter-by-quarter basis in terms of what is an order book set for delivery, then the number of module orders is larger than the cell orders.

Okay. Got it.

Really helpful. Lastly, on the cost side, if you can highlight how has been the spread especially in the DCR?

Because the rupee depreciation and the supply cost which has increased, in the DCR the spread is moving?

It's not moved much because most of our orders are on dollar based, the exchange doesn't make any difference. If you see, silver is actually dropped, there has not been a big change in the spread.

No material change.

Thank you, sir, and all the best.

Thank you.

Thank you. Good morning, sir.

Congratulations on a good set of numbers. Just two bookkeeping questions.

I understand that our depreciation has come off from FY26. What would be the expected run rate for depreciation in FY27 based on our new capacity additions and, yeah?

I think, Ketan, hi. This is Vinay.

In terms of depreciation, basically it has come off because of last year we had taken accelerated depreciation. Now we are back to the usual five-year depreciation for all our new cell and module lines.

Over the next three quarters, over the next two quarters particularly, you will see more depreciation coming in because of the Seetharampur line has got fully commissioned, and then of course the 7-gigawatt Naidupeta line gets commissioned, later this month. I would expect a small increase in depreciation in the next quarter, and then full effect coming in through Q3 and Q4, where we will see roughly about 240 to 250 crore rupees of depreciation quarterly.

Understood. Got it.

What would explain our sharp increase in other expenses and employee cost, as other expenses are up around 50% and employee is around 70%?

This is nothing but just advanced hiring for all the capacity expansion that is going on in the company. The Seetharampur line got commissioned in March, we had to start hiring people, I would say, more than three months in advance of that.

Similarly for the Naidupeta line, we've been kind of hiring people over the last six months already. We have to prepare in advance in terms of all the hiring, making sure that all the training is done for all these people.

Then, of course, even at the corporate level, there is a jump in hiring in terms of because we made a few acquisitions and we are kind of building out new businesses. I think that explains the increase in manpower cost.

At the same time, I should also say that there is also very active discussion on cost-cutting and optimization in terms of resources across the company. One of the major advantages of the scale-up and the operating leverage that we're getting is that we are able to substantially reduce the number of people that we employ, let's say on a per-gigawatt basis.

A good case in point is the Seetharampur line, where we estimate that manpower cost would be roughly about 40% lower on a per-gigawatt basis than it has been on the other lines because these were all scattered, 0.5-gigawatt lines, 750-megawatt line, etc. While at the aggregate level the costs are going up, but on a per-unit basis, the costs will actually be much lower over the next few years.

Understood. Thanks for that elaborate answer.

Just wanted to check one more thing. Is the assumption right that the finance expenses would ramp up in Q3 and Q4 once the new line are up?

I think in terms of the finance expenses, yes, there will be some increase. As bulk of the increase in capacity for the new lines has been actually funded by equity.

The increase in expenses will be actually relatively quite small.

Understood. As you explained for employee, what about other expenses?

Why it is up 50%? Or what attributes

Sorry. Just give us a second.

You mean other expenses? Expenses.

Other expenses.

Expenses.

From 120 to 180 crores. Yeah.

The other expenses increases primarily attributed towards the operational cost of Seetharampur post capitalization, wherein the ramp-up is happening in July, that is subsequent to the quarter, but all the built-up of the cost, the power cost and all, has been taken into other expenses.

Understood. It's connected to the Seetharampur module facility.

Understood. Thank you, sir.

Those were my questions.

Thank you.

Good morning. This is Shweta here.

Sir, just wanted to circle back again on the realizations that we have achieved for this quarter.

Hi, Shweta. Where are you calling from?

Anand Rathi.

Okay. Hi, Shweta.

As we said earlier, the realizations in the quarter were pretty stable for both DCR modules as well as for cells. On the non-DCR side, there was some softening as the prices have been coming off because of the oversupply in the market.

That answers your question, hopefully.

On the DCR side, you're not seeing any kind of sequential decline or any pressure in terms of pricing?

No. On the DCR market, the market is highly segmented.

Across C&I, rooftop, and KUSUM segments because each of these segments the customer profile is very different, the nature of demand is very different. Also there are obviously differences because of technology in terms of Mono PERC and TOPCon.

Just to give you an idea, for the retail market, Surya Ghar Yojana, the modules are sold at about 24 to 24.5 kind of cents range, whereas in the KUSUM market, because the project sizes are larger, the prices can be slightly lower at about 22 or so. C&I market will be slightly lower still, depending on technology and timing of delivery.

Okay. How do you foresee this going for this year ahead?

How do we build in the realizations for the year?

I think for the year, like we said, Shweta, most of the order book is already in place, particularly for DCR modules as well as for cells, and those are all booked at the current prices. There is no change that we see, I would say, even over the next 12 to 15 months kind of trajectory.

Got it. That answers my question.

Thank you.

Thank you.

Thank you for the opportunity, and congrats, team, on a good set of numbers. I just had one question, and more from a strategic point of view, sir.

I think yesterday there was a circular in the US possibly implementing some minimum import prices on cell and module imports into the US. I think cell import price was somewhere close to about $0.22.

From a strategic point of view now, sir, does it now make sense to sort of start cell manufacturing in the US, or maybe module manufacturing in the US? Any thoughts there from a strategic point of view you have?

Shyam, we already have a JV to set up cell manufacturing in the US. We have been trying to finalize the location where we want to set this up.

We have been a little slow and cautious looking at the regime there. We have concrete plans to set up cell manufacturing in the US.

With this MIP proposal which has come up, yes, it makes sense to manufacture in the US.

Interesting. Let's say if we kind of go ahead with this, by when should we kind of start expecting output from the Takes

about 24 to 30 months.

Interesting. That's it, sir.

Thank you so much.

Hi. Thank you for the opportunity.

First question on KUSUM actually. KUSUM B and C, I think majority of the target had been already achieved in terms of FLS and yeah, KUSUM B and C FLS.

Now, on KUSUM A, earlier I think it was the notions that it is not lucrative for discoms and even the pickup was very slow. As per the new participants question, are you seeing this Obviously, it reflects in the number, but does that mean maybe a 10-gigawatt overall target that was earlier laid out would come through by March '27 as per what you mentioned in the earlier remarks?

Hi, Prakhar. I think the mix between A, B, and C has actually been quite flexible.

The government has been shifting capacities, particularly from component A and then also from B towards C. On top of that, a lot of the states, particularly I would say Maharashtra and Rajasthan and UP, have also done large tenders for both B and C even outside of whatever the government targets.

I think on the whole, there is, like I said earlier, there is active demand in both B and C. I don't know whether the B target of 10 lakh pumps will be achieved or not.

As of today, the total installed number has already reached 11.5 lakh solar pumps as per the KUSUM portal. I think we are going to exceed all the targets.

Okay. On component A as well, because the chart that you put in presentation, that shows pickup in A, which was the 10-gigawatt overall number.

Even that, because I remember when in the first question you mentioned that government has directed states to meet the entire quota by maybe March '27. Even A, you are seeing that pickup again?

I think what is happening is that projects which had been basically tendered and auctioned in the past, they're finally coming to execution. In A, the level of subsidy given by the government is actually quite small, and hence there hasn't been much pickup in the A component overall.

Yes, there is obviously increase because, historically not much has been added. Bulk of the capacity addition will still come in B and C going forward.

Understood. Just second and last question on the OCI that you booked, so that would be on hedging on silver and forex?

Sorry, your question is not very clear, Prakhar.

The OCI loss that you have booked in the consol financials in the last two quarters, that is related to hedging positions on silver and forex?

It is basically silver and aluminum. This is all done in the normal course of business, and it'll be unbound as and when these positions are utilized and settled.

Through P&L?

Yes, that's correct, yes.

Yeah. Okay.

This actually just last one, on exports to other geographies like Europe, etc., because recently there have been some developments in Europe where they want to move a little ex-China supply chain. Is there some maybe inbound queries from there as well, or maybe Europe is still distant in terms of export opportunities?

That is the last.

No, Europe actually is in a takeoff stage. In fact, we are in advanced stages of opening our European office and even hiring a sales team over there.

Already tenders have started coming out. There's been a large auction in Italy.

Some large tenders have come out in France, and we expect more tenders to come out in Germany and other countries, which are basically precluding modules from China. I think that market is going to open up quite substantially over the next two to three years.

We are actively looking at that market and doing a lot of work to understand the customer requirements, documentation, technology, after-sales, and opening an office there shortly.

Okay. Thank you, and all the best.

Thank you.

Most of the things are covered. Just one clarification.

When you say DCR module, it's the integrated module and cell supplied in the DCR market, right?

That's right.

Going forward, once you have 10 gigawatt of cell capacity, you will try to consume most of it as DCR market opens up post-December for the DCR integrated module, right, instead of selling more cells separately in the market?

That's right.

Okay. Fine.

Thank you so much.

Hi, sir. Sir, as you said that there was an influx of non-DCR modules, how do we see Quarter 2 and Quarter 3 ramping up in terms of DCR?

Was there a huge rush in pre-buying, and should we see some slowness here?

For DCR, we are not seeing any slowness. There is always a pre-buying.

If you're talking about Q3, Q4, your question is on DCR or on non-DCR?

Sir, DCR, sir.

DCR is on pre-buying. There is a huge demand

because

a lot of DCR projects are getting over in March, like the KUSUM program is getting over in March and then the KUSUM 2.0 comes. The PM Surya Ghar is getting over in March, and there's talk of PM Surya Ghar 2.0 coming.

There'll be a big demand in Q3, Q4 for DCR.

Sir. Sir, now that our modules and we'll use more our own manufactured cell, how is the spread looking in the DCR, and vis-a-vis, let's say, last year when there was non-DCR cell also, overall how do we see the margin in overall?

The spread is similar. There has not been a big change in the spread.

There is no material change.

Okay. Going forward with this mostly DCR cells, how do we see margins from here?

I believe the prices is holding up, but if you can quantify what's the spread and

Yeah. What we believe is that as, going forward in future, more capacity of cell lines coming in, which will take time, it takes two years to build cell line then to ramp them up and to stabilize them, we feel that even if there is a little amount of pricing pressure, with scale and operating leverage, we will be able to protect our margins.

Sir. Got it.

Yeah. Hi, sir.

Thanks for the follow-up. Sir, firstly on the comment that you made on Europe and the demand actually looking solid from an outlook perspective.

Now so similar to a JV for manufacturing in US, can we also look for something like that in Europe in terms of a manufacturing there, or are we looking more from an export perspective only?

Kunal, in European market, the policy regime is still kind of taking shape. Under the Net-Zero Industry Act and some of the other policies that have been announced so far, module imports from countries with FTA will receive the same status as domestically made modules.

As India is in the final stages of signing the FTA with EU. I think we are looking at the market, following all the developments very, very closely.

As long as the Indian modules find an easy acceptance and the FTA is signed as expected, I think export from India is going to be the first preference. Then we are completely open to the possibility of setting up a plant at some point depending on demand growth as well as the policy environment.

Understood. This is helpful.

Secondly, sir, if we look at our journey, sort of we were amongst the first to transition a line from multi-perc to Mono PERC and then amongst the first to sort of roll out G12R and 0BB cells, right? Now what lies ahead in terms of further tech upgradations from here on and a subsequent expansion versus the peers in terms of our technology and where we stand?

Yes.

Kunal, as we speak, we are making G12R TOPCon cells, and then we have also launched the 0BB cell. We are working with our R&D team, taking stock of what we expect would come up in the next five years, 10 years.

Post TOPCon, we are looking at TBC, which is the back-contact, and then we are also looking at tandem, which will take a little longer. Then, as a company which has been into module manufacturing for almost 30 years and cell manufacturing for over 15 years, we generally keep a tab on what's happening around the world and are in sync with that.

Understood. Sir, one last question.

What we hear in the market is the talent attraction and retention in the cell industry has been a bit challenging, especially with a lot of new companies sort of announcing their entries or already entered. What has been our strategy to sort of offset for this aggressive attrition that we are seeing in the industry?

This is something that we are hearing, but could you also give some insights over here?

See, this is a problem in the industry, but then we keep continuously training people. We impart a lot of skill development in our plants.

We have people whom we keep training continuously, we are not facing this problem in a material manner. On the other hand, we have been Great Place to Work four times in a row now, and our ESOP scheme has been very successful.

All these things have helped us to retain good talent.

Understood. This is very helpful, sir.

Thanks, and all the best.

Thank you.

I think in the interest of time, let's take one question each because we have only seven minutes left.

Hi. Thanks for taking my question.

As our order book is at a record high, and as per your remarks, module orders are for next six to nine months, while cell orders are spread over FY29. How much of the current order book we can execute in next let's say nine months?

The total order book is 15,000, and a substantial portion of this order book, at least about 40% to 45% of this order book, would go into FY28. I hope that answers your question.

It does. Thank you.

That's all from my side.

Sure.

Hi. My question on the industry side.

As we can see a lot of chatter is coming from the government also that the transmission side or the grid side is not that much capable to transmit the renewable energy, right? Now, when the BESS capacity will expand or set up, do you see that the run rate of orders is coming off for the renewable side for the module side?

Because as we can see, the ramp-up of BESS capacity will also take time, and government is strictly pushing towards the BESS capacity, not the stand-alone solar module.

Yeah. Hi, Karan.

There has been We are seeing some curtailment of our energy generation. How do you see that risk?

Sure. Karan, we have tried to show in our presentation that definitely adding a lot of solar capacity does put a lot of pressure on the grid.

There is a steeper and steeper duck curve as we are observing in the Indian market. Then, at the same time, there is also a very good demand momentum in the industry.

There are two, three very good mitigations in place. One, storage technology has become viable not just because the cost of storage has fallen, but also because the arbitrage or the opportunity cost of storage has actually gone up.

Today there's an arbitrage of 7 to 8 rupees between the morning and the evening peaks as against the midday hours. That makes storage viable.

There is already a huge pickup in storage capacity addition. This year we are expecting almost, I would say, 20 gigawatt-hours of storage capacity addition between the merchant and the non-merchant markets, and that number should more than double over the next two years.

I think a lot of storage capacity is coming up. On top of that, by 20 FY29, you will see at least 40 to 50 gigawatt-hour of pumped storage capacity coming onto the grid.

Then you have to take into account that the distributed solar market, which is not really affected by any of these transmission constraints, and which used to be about 15% or 20% of the total market, today is almost 40% of the total market size. We are seeing much more growth coming from Surya Ghar Yojana and KUSUM schemes.

Even the C&I segment, because C&I segment mostly those projects are implemented at the intra-state level where there is much less grid congestion. They don't typically face the same kind of challenges as you're

Okay. Just quick one, the margin of your DCR cells selling to the merchants.

Just one question on the DCR cell margin side. How much margin you are making on the merchant cell?

Yeah.

No,

what is merchant cell?

Cell sales in the market.

Oh, you're talking about module? No, yeah.

You want to take

it? See, we've always

My question is basically to understand if we are selling the DCR cell outside or the merchants, what is the profitability of those cells rather than consuming in-house in terms of margins and in terms of cost saving in-house? The margin on cell side, if you can tell me.

Hello.

I think the last question was about margins on cell sales,

and

I was just saying that, as a company, we don't give out any kind of margins by product segment, unfortunately I'm not able to share any information on that.

Fair enough. Just a broad direction on this side that we are making more profits or the profitability is high selling outside the cells compared to consuming in-house?

Right now the situation is, just trying to understand.

No, I won't say so. People are buying cells only because there's a lot of demand for DCR modules and making DCR modules remains a profitable business.

I think there is no such thing as making cells is more profitable than making modules. We continue to be present in both the businesses, have a more diversified presence across segments and customers.

Okay. Any percentage if you can share how much we are selling outside and how much consuming in-house?

In general, we have said in the past that we want to maintain a business split of 50-50 for our cell production: 50% to be sold externally and 50% to be consumed internally. That proportion is going to get more and more skewed towards domestic consumption as ALMM 2 gets implemented and DCR demand picks up.

Okay. Thank you.

Fair enough.

Hello, sir. Can you hear me?

Yes, sir. I just have one question because you worked so close with the industry.

Last week there was

I think we've come to the end of the one-hour mark, we can take maybe one last question.

Hello, sir. Can you hear me?

Yes, Raman, I can hear you.

Yeah. I just have one question and I just want to understand the industry perspective.

Last week there was an article wherein it was stated that small module and cell manufacturer players were shutting down their manufacturing capacity because it was not feasible for them. I just want to understand, because you work so close with the industry, how is the industry shaping out as more and more module and cell capacity is being added, and are you witnessing any industry consolidation?

Hi, Raman. Definitely.

I think the three or four main parameters on which all the players in the industry compete on, basically they are scale, vertical integration, and technology. The shift to ALMM 2 and ALMM 3 is only going to accelerate these trends and favor companies with the largest capacities, best technologies, and proven track record, etc.

I think it is inevitable that some of these smaller manufacturers who are not vertically integrated will find the market very, very tough. Margins have almost completely, I would say, vanished at the module manufacturing end, and the entire profitability pool has shifted upstream to the cell business.

Henceforth, the market will be dominated by larger players, integrated players with cell and going forward ingot wafer capacities. Consolidation, in our mind, is inevitable in the sector.

Just a follow-up on this, a small doubt. Going when it comes to module manufacturing, there was no entry barrier for any business to come, and with cell, the entry barrier is there is a little bit of entry barrier.

Going forward, will it be of more backward integration into ingot wafer and polysilicon, which will create a entry barrier and which will make sure the margins are sustainable, or will it be the volume share, volume of integrated cell and solar cell and module and ingot wafer capacity? What will be the differentiating factor between the leaders?

See, all the upstream manufacturing is a highly capital-intensive and technology-intensive business. While there is no entry barrier per se, but just the fact that you require a significant investment in cell and ingot wafer lines, a lot of operational expertise, latest technology, that itself acts as a entry barrier.

Plus, all these businesses benefit massively from scale. Any company which has got, let's say, scale of 10 gigawatts will enjoy massive advantage in terms of cost of production, logistics, working capital, etc., and they will be able to basically dictate the market in terms of volume as well as pricing.

I think not entry barriers per se, but there are lots of advantages favoring companies with scale, vertical integration, and technology.

Thank you, sir. Thank you so much.

you. Thank you, everyone, for your interest.

We appreciate your time and interest in Premier Energies. The business, as we said, is poised for rapid growth in the coming quarters with all the new capacities coming online.

At the same time, we're also preparing ourselves for more competition. There's a lot of work going on behind the scene in terms of more cost competitiveness, making sure that we optimize every single part of our operations, we innovate on the technology front, and we build a diversified portfolio of products and technologies.

With that, we believe the overall outlook for the business, both in terms of top line and bottom line growth, is very, very attractive. As usual, we are very grateful for all the support that we get from the financial community, and we look forward to working with you.

Thank you.

Thank you. On behalf of ICICI Securities, that concludes this conference.

Thank you for joining us, and you may now disconnect your lines.