The Hyderabad-headquartered built-in photo voltaic photovoltaic (PV) cell and module producer plans to make investments practically ₹5,000 crore to develop its manufacturing footprint, together with backward integration into ingots and wafers, together with investments in storage and inverter companies.
Rustagi stated the corporate’s present 3.6 GW cell capacity will rise to 10.6 GW over the following 4 months. “Bulk of our order book for the approaching yr is already booked, in order that gives us superb visibility over our margins,” he stated.
Rustagi added that the corporate expects demand to stay robust in FY27, supported by schemes equivalent to Surya Ghar Yojana and Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan (PM-KUSUM), together with rising company demand linked to internet-zero commitments.
Rustagi clarified that the board approval to increase ₹5,000 crore is just an enabling decision and there’s no fast plan to increase capital and the corporate is evaluating new development alternatives earlier than taking any fundraising resolution.
Premier Energies additionally reported its earnings for the January-March 2026 quarter and presently has a market capitalisation of ₹45,104.65 crore. The corporate’s shares have declined greater than 8% during the last yr.
These are edited excerpts from the interview.Q: Give us 4 numbers that you just goal in phrases of the income development, in phrases of margins, what is the sort of capex that you have lined up, and on the identical time, the order wins. These 4 parameters — in the event you may give us a way of what one ought to work with in FY27.
A: FY27 needs to be one other nice yr for us. We now have an order book presently of about ₹14,000 odd crore, and the majority of this order book goes to get executed in the course of the yr, so meaning we’ve got superb visibility in phrases of gross sales in addition to pricing and margins.
Equally, in phrases of capex, we’ve got a big capex programme. We might be spending about ₹5,000 odd crore on greater than tripling our cell capacity, in addition to investing in backward integration and new merchandise like storage and inverters. So, there’s a big capex programme occurring, which is able to principally pave the best way for development in the approaching years.
Q: What concerning the pricing strain, if any, you are seeing in the market. To be clear, there is no such thing as a export enterprise right here. You are very a lot focused on the home market, however with a number of gamers ramping up their capacity concurrently, are you seeing any pricing strain? That’s one. Secondly, in your cells, cells are about 58% of your order book. They’re additionally your highest-margin product, however you are going from about 1.6 to seven gigawatts of cell capacity by September. So, because the provider base will increase, do you count on the realisations to additionally maintain?
A: Simply to make clear, our cell capacity presently is 3.6 gigawatts, and it’s rising by 7 gigawatts to 10.6 gigawatts in the following 4 months.
Coming to margins and pricing, we’ve got to perceive that there are primarily three merchandise that we promote: one is cells, second is DCR modules, or modules made utilizing India-made cells, and third is non-DCR modules, the place we are able to import the cells after which convert them into modules. Now, the final class, that’s, the non-DCR module enterprise, is the one which is essentially the most commoditised enterprise. There are actually greater than 100 corporations competing for that enterprise, and the margins are wafer-skinny, and our presence in that enterprise may be very small.
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The majority of our income and income come from the cell enterprise and the DCR module enterprise, the place the worth addition may be very excessive and the margins are very engaging. Now, the great factor is that sure, there are extra individuals coming into the market, however in the event you see the demand numbers, the Indian market grew by 87% during the last yr, which is incredible development, and we count on the expansion to proceed over the following few years, notably in the event you take a look at how the West Asia battle is shaping the power steadiness in the international locations and all the assorted authorities schemes designed to help development. The demand goes to be very robust.
After which on the availability aspect, sure, lots of people have introduced entry into the enterprise, however we have all the time maintained that it is a difficult enterprise. It does take numerous time for traders to increase the capital, full the development of their vegetation, after which in the end stabilise their manufacturing, which might take something from two and a half to three years from begin to end. So, total, the demand-provide scenario might be very beneficial, which augurs properly for the monetary prospects of the corporate.
Q: In gentle of that, in the event you may share extra gentle on the sort of orders that you’re planning on successful in FY27. Is there an order influx pipeline that you’ve got? For those who may shed extra gentle on that, and naturally, how will the margin profile form up in the brand new yr?
A: When it comes to how the order book is predicted to evolve, the important thing factor there’s that our capacity, each cell and module, is rising between two to 3 times over the following one yr. So, we clearly have a really robust place in the market, and we might be attempting to seize new orders to fulfil this capacity even past FY27. Now, like I discussed, the demand surroundings in the sector may be very robust. There are, in truth, giant schemes, whether or not the Surya Ghar Yojana or the PM-KUSUM scheme, the place we expect very robust execution in the approaching yr. Equally, the company market, due to decarbonisation and internet-zero initiatives, can be booming, so we’d count on the order-book influx to stay very robust throughout the yr.
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Q: There’s a brokerage observe that I am studying. They count on margin compression. Really, they count on this agency’s margins from 30% in FY26 to compress to about 26% in FY28, primarily as each BSS and the ingot-wafer companies scale up. So, in the event you may give us a way of the place you see that. And in addition, you will have a board approval to increase ₹5,000 crore. When does the road count on that paper to hit the road?
A: Coming to margins, I am unable to offer you any steerage, however there are a selection of things which might be going to affect our margins as we go ahead. To start with, the majority of our order book for the approaching yr is already booked, in order that gives us superb visibility over our margins, which needs to be in the area of the place we’ve got been traditionally.
Having stated that, the enterprise is evolving. The non-DCR enterprise that we’ve got, its market share goes to lower over a time period, which is able to help a rise in margins. Equally, as we combine backwards into ingots and wafers, that’s going to additional help our margins. This might be barely offset by the expansion of the battery storage, inverter, and transformer companies, that are extra meeting-oriented companies and usually have decrease margins. So, total, the outlook for the margins is mostly very robust.
For the complete interview, watch the accompanying video
Coming to fundraising, we’ve got a big capex programme, which we’re funding largely via inner accruals and debt. We do not want to increase any extra exterior capital proper now. Having stated that, it is a very thrilling place the place there are many new alternatives, each horizontal in addition to vertical. We’re evaluating fairly a couple of of those alternatives, and that is principally simply an enabling decision that we’ve got handed. As and once we crystallise our development plans and agency up any new initiatives to be taken up, we’ll then method the marketplace for any future funding. However proper now, I have to make clear that there is no such thing as a particular plan, both in phrases of timeline or quantities, for any future fundraising.
Q: Are you saying that brokerages are underestimating the margins?
A: It’s not for me to say what the brokerages are saying. I am unable to offer you any steerage, however, in basic, the demand-provide surroundings in the sector may be very robust, and our aggressive place, in addition to the order book, goes to help a really wholesome efficiency in the approaching yr.
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