Imagine a future where every watt of energy lighting up your home, powering businesses, and driving industrial progress is sourced from renewable, clean energy. While this may seem like a far fetched goal, it is steadily turning into a tangible outcome as India accelerates its transition to a solar-powered economy. With the global pivot away from conventional thermal power, Vikram Solar is strategically positioned to harness this paradigm shift to lead the charge in India’s renewable energy transformation!
Since its inception in 2009, what began as a solar panel manufacturer has evolved into a one-stop solution for all solar needs due to the early strategic investment in manufacturing and technology, which laid the groundwork and has now drawn the interest of the investors towards the shares trading at [View Current Market Price of Vikram Solar Unlisted Shares].
With a steadfast commitment to innovation and quality, the diverse product portfolio is designed not just to meet the energy demands of today but to proactively address the energy needs of tomorrow. Let’s unwind how their products are playing a key role in steering India’s renewable energy roadmap towards a sustainable and self-reliant future.
When it comes to solar power, the key component that makes it all possible is the solar panel—or more specifically, the solar photovoltaic (PV) cells inside the panel. So, what exactly are PV cells?
Think of PV cells as the "engine" of a solar panel. They’re like tiny factories that take in sunlight and turn it into usable energy. The better these cells are, the more energy the panel can produce. Currently, Vikram Solar has a production capacity of 3.5 GW.
What Makes Their Solar Panels So Special?
With the use of advanced technology to make sure their PV cells are as efficient as possible. One of the standout features is bifacial technology. To put it simply! These can absorb sunlight from both sides, front and back. This means more sunlight is captured, and that equals more energy produced.
One of their coolest innovations is bifacial technology. Imagine solar panels that don’t just absorb sunlight from the front but also from the back—making them extra effective at capturing energy.
What About Their Product Range?
Vikram Solar doesn’t just offer a one-size-fits-all solution. They’ve got a range of high-performance PV modules designed for different needs. Whether it’s a massive solar farm or a smaller rooftop installation, they have panels built to last, with a focus on durability, energy yield, and long-term performance.
They’re also working with advanced technologies like:
PERC Technology (Passivated Emitter and Rear Cell): This enhances efficiency by reflecting unused sunlight back into the cell, making the panels more powerful and space-efficient—ideal for setups where space is limited.
TOPCon Technology (Tunnel Oxide Passivated Contact): This improves durability and energy performance, especially in tough environmental conditions like high temperatures or humidity.
HJT Technology (Heterojunction Technology): A design that combines traditional and modern solar cell technologies to deliver exceptional energy output and efficiency.
As the company evolved, they realized that succeeding in the solar industry wasn't just about making great panels; it was about offering a complete solar solution. That's when they made a game-changing move into engineering, procurement, and construction services. Now, they handle everything from design to installation, making it easy for clients to get everything they need in one place.
Engineering: Think of this as the blueprint phase. Every solar system is designed to fit the client's specific needs, making sure it’s energy-efficient and built to last. The goal here? Maximize energy output while keeping costs under control.
Procurement: Next up, they carefully pick only the best materials for the job. From solar panels to inverters, each component is chosen for its quality and long-term reliability. This ensures the system works as promised—day in, day out.
Construction: Then comes the build! The team takes care of the whole installation process—from setting up the panels to wiring everything up. Everything is done on time and to spec, with minimal disruption to the daily routine.
By managing every part of the process—from designing and sourcing to installing—they make sure the end result is a high-quality, custom solar solution that meets the client’s needs perfectly. It’s all about giving clients a seamless, worry-free experience from start to finish.
So, let’s say you’ve got your shiny new solar panels installed. But here’s the thing: solar panels need some TLC to keep running smoothly. That’s where the solar operations and maintenance (O&M) services come in. They don’t just install the systems and walk away—they stick around to ensure that everything continues to run at peak performance for years to come.
Think of O&M like the regular check-ups your car needs to keep driving smoothly. From preventive maintenance to monitoring systems in real time, these services are designed to ensure that your solar system keeps generating energy efficiently year after year with over 700 MW of ongoing projects under management.
It's clear that the company’s ability to execute large-scale, high-quality projects positions it well for continued growth in the renewable energy space.
Let’s take a look at why Vikram Solar is riding high and how the company is positioned for even greater things in the future.
Expanding Order Book through Strategic Public Sector Undertakings (PSUs) Partnerships
Strategic alliances with prominent public sector undertakings (PSUs) like NTPC, Gujarat Industries Power Company (GIPCL), and NLC India aren’t just about project execution; they are long-term engagements that provide a steady pipeline of opportunities. Each successful project completion acts as a catalyst, generating momentum and paving the way for further contract wins.
Diverse Market Presence:
Vikram Solar’s diverse market presence spans utility-scale, commercial, industrial, and residential sectors, allowing the company to tap into various revenue streams and reduce reliance on any single segment.
Utility-Scale Projects: Vikram Solar excels in large solar power plants that provide clean energy to cities and regions, offering complete end-to-end solutions.
Commercial Sector: They tailor solar systems for businesses, helping everything from retail stores to factories optimize their energy use and reduce costs.
Industrial Solutions: For heavy industries, Vikram Solar provides high-efficiency solar systems that power large machinery and manufacturing processes, ensuring reliable energy.
Residential Installations: Homeowners benefit from Vikram Solar’s customized rooftop solutions, cutting energy bills and supporting sustainable living.
Leading with Innovation: Bifacial Solar Panels
Here’s where it truly stands out. They aren’t just keeping up with the market—they’re shaping it. With their bifacial solar panels, they’re tapping into technology that captures sunlight from both sides of the panel. Yep, you heard that right—both sides. This means these panels produce more energy with fewer resources. And in a world where every extra watt counts, this innovation gives them a leg up on the competition.
Exports and the Global Footprint!
But it gets even better. With a presence in over 30 countries and 61.58% of revenue coming from exports, the company is already an international player in the solar sector, and also comes in the top three leading module exporters alongside Adani and Waaree! But the journey doesn’t end there. Their strategic entry into the US market, capitalizing on the benefits of the Inflation Reduction Act, is poised to unlock new growth opportunities due to the tax incentives and funding aimed at boosting clean energy production, which makes it easier for companies like Vikram Solar to expand and increase sales in the U.S. market.
In FY 2024, over 29% of the nation's PV module production was exported, with the majority of shipments coming from Waaree Energies, Adani Solar, and Vikram Solar. Each of these companies exported more than half of their total production for the year.
Of course, no journey is without its bumps along the road. So, what challenges does Vikram Solar need to keep an eye on? Let’s take a closer look.
Raw Material Price Volatility
Like most companies in the solar industry, the company relies on materials like solar cells that can fluctuate in price. When the cost of these materials spikes, it can squeeze margins. You might be wondering, “Can’t they just absorb the costs?” Well, it’s not that simple! When raw material prices rise, it can directly affect profitability. That means Vikram Solar has to stay agile, find ways to manage costs effectively, and protect their bottom line.
Trade Disputes & Safeguard Duties
Let’s face it—trade issues can be a pain. Vikram Solar is dealing with the weight of safeguard duties on imported solar cells. These duties increase the cost of essential raw materials, which could drive up prices for their solar products. On top of that, delays in paying statutory dues, such as taxes and compliance fees, are another challenge. If payments aren’t made on time, it could result in penalties, which would strain cash flow and disrupt day-to-day operations. Together, these issues pose potential risks that could affect the company’s bottom line.
Rising Operational Costs and Working Capital Management:
This is a behind-the-scenes challenge: rising operational costs. While raw material prices grab the spotlight, the everyday costs of running the business—logistics, labor, and overhead—are steadily climbing as well. Every little expense adds up, and if the company doesn’t keep these under control, it could eat into their profit margins and slow down their ability to scale effectively. To tackle this, honing the focus on managing cash flow efficiently and ensuring smooth operations by optimizing inventory management and accounts receivable processes becomes vital.
Numbers are the torchbearers of a company’s financial narrative, shedding light on key financial metrics such as profitability, gearing, liquidity, and asset quality. These parameters are crucial in determining the company’s financial position!
Profitability
Profit After Tax (PAT) surged 4.5 times year-on-year, rising to ₹79.70 cr. in FY2024 from ₹14.50 cr. in FY2023, primarily driven by stronger market demand for solar cells and effective internal cost optimization strategies. Key factors include the company’s rapid capacity expansion, improved procurement strategies, and economies of scale that were achieved as production volumes increased. As a result, the Net Profit Margin improved from 0.70% in FY2023 to 3.17% in FY2024, reflecting more efficient cost management and optimized profit margins.
Asset Quality
The company’s total assets base increased to ₹2,585 cr, indicating growth and a foundation for future expansion driven by the expansion of operations and strategic investments in infrastructure, R&D, and manufacturing.
Current Ratio: A healthy current ratio of 1.39x suggests that they have ample capacity to meet short-term liabilities and ensures a steady liquidity position.
Trade Receivables: The company holds ₹1,272 cr. in trade receivables, with a provision for expected credit loss of ₹91 cr, reflecting a conservative approach to managing potential credit risks. Trade receivables have increased with business growth; however, the company has adopted a cautious approach to provisioning for bad debts, showcasing its proactive risk management in credit considering the volatile nature of business.
Inventory Turnover: The slight decrease in Inventory Turnover, from 5.07x to 4.38x over the same period, suggests that the company may be holding more unsold inventory than before. This could be due to supply chain constraints or longer manufacturing lead times, which may require more focused inventory management strategies to optimize efficiency and reduce excess stock.
Financial leverage measures how much debt a company uses relative to equity and has seen a decline over the years as the debt-to-equity ratio has decreased from 2.02x in FY2023 to 1.81x in FY2024, signaling a reduction in the company's reliance on debt financing, largely due to increased exposure towards equity funding. While total borrowings have increased, this is mainly due to an increase in short-term borrowings, likely related to financing working capital needs, while the decrease in long-term borrowings indicates that the company has been able to manage its capital requirements with less long-term debt, focusing on more immediate liquidity needs.
Operational:
Vikram Solar, with an EBITDA margin of 15.87% in FY24, demonstrates the highest operational efficiency among its peers, outpacing Waaree Energies' 13.81% and Premier Energies' 15.20%.
Leverage:
Vikram Solar's debt-to-equity ratio of 1.81x reflects a moderate reliance on debt, striking a balance between growth and stability. Waaree Energies stands out with an enviably low debt-to-equity ratio of 0.08x. Premier Energies, with a ratio of 2.11x, faces the highest leverage among the peers, indicating aggressive expansion.
Profitability:
Waaree Energies leads in PAT margin with 10.96%, highlighting its ability to efficiently convert revenues into profits. Premier Energies achieves a PAT margin of 7.3%, placing it ahead of Vikram Solar, which recorded a PAT margin of 3.17%. While Vikram Solar lags in PAT margins, its steep turnaround from prior years shows a compelling story.
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