Premier Energies Ltd (NSE: PREMIERENE) Q3 2025 Earnings Call dated Feb. 03, 2025
Corporate Participants:
Chiranjeev Saluja — Managing Director
Nand Kishore Khandelwal — Group Chief Financial Officer
Vinay Rustagi — Senior Director, Investor Relations
Analysts:
Mohit Kumar — Analyst
Deepak Krishnan — Analyst
Aman Jain — Analyst
Nitin Arora — Analyst
Nidhi Shah — Analyst
Sanjay Mookim — Analyst
Gopal — Analyst
Mayur Patel — Analyst
Piyush Sevaldasani — Analyst
Shivanshu Gupta — Analyst
Swati Jhunjhunwala — Analyst
Akash Mehta — Analyst
Chaitanya Jhunjhunwala — Analyst
Bharani — Analyst
Prateek Kumar — Analyst
Subramaniam Yadav — Analyst
Vipraw Srivastava — Analyst
Presentation:
Operator
Ladies and gentlemen. Good day and welcome to Premier Energies Limited Q3 and FY25 earnings conference call hosted by ICICI Securities. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded.
I now hand the conference over to Mohit Kumar from ICICI Securities. Thank you. And over to you sir.
Mohit Kumar — Analyst
Thank you, Manav. Good evening. On behalf of ICICI Securities I welcome you all to the Q3FY25 earnings call of Premier Energy Limited. Today we have with us from the management Mr. Chiranjeev Saluja, Managing Director, Mr. Vinay Rustagi, Senior Director, Investor Relations and Mr. N.K. Khandelwal, CFO.
We’ll begin with the opening remarks from the management followed by Q and A. Over to you sir.
Chiranjeev Saluja — Managing Director
Thank you, Mohit. Am I audible?
Mohit Kumar — Analyst
Yes, sir.
Chiranjeev Saluja — Managing Director
Okay. Good evening everyone and thank you all for joining us today at our second earnings call for Q3FY25. I am Chiranjeev Saluja, Managing Director of Premier Energies and it is an honor to present our quarterly results.
I am joined today by my colleague Mr. N.K. khandelwal Group CFO and Vinay R. Ustagi, Senior Director. Premier Energies has clocked another quarter of outstanding operational and financial performance with excellent revenue and earnings growth. For Q3FY25, the company has achieved a total revenue of 17,494 million as against 7,147 million in Q3FY24, marking 144.76% year on year increase. This growth is driven primarily by robust demand from the domestic market, reflecting growing demand for solar power across different segments. Our exports for this quarter were 3.44% of revenue and on a year to date basis 2.11%.
Operating EBITDA for the quarter stood at 5135 million compared to $1232 million in Q3FY24 exhibiting a growth of 316.49%. Operating EBITDA margin improved from 17.330% in Q3FY24 to 20.
Operator
Ladies and gentlemen, the line for the management is disconnected. Please wait patiently while we recurrent Ladies and gentlemen, we have the management flying back with us and over to you sir.
Chiranjeev Saluja — Managing Director
Sure, thank you. So I was an operating EBITDA for the quarter it stood at 5135 million compared to 1232 million in Q3FY24 exhibiting a growth of 316%. Operating EBITDA margin improved from 17.30% in Q3FY24 to 29.97% in Q3FY25. This improvement has come from our continuous focus on operational excellence, strong customer connect and cost optimization, our ability to efficiently ramp up capacity and meet the rising demand.
The pat for the quarter is at 2,552 million showing a year on year growth of 490% in comparison to 432 million in the same period last year. PAT margin improved from 6.05% in Q3FY24 to 14.59% in Q3FY25. The proceeds from our IPO have significantly strengthened our balance sheet. Our net debt to EBITDA ratio has fallen from 9.51 to 3.49 compared to the same quarter of last year. We are maintaining a net cash positive position for equity investment in our expansion projects. We remain very optimistic about solar sector growth prospects in India and worldwide. The sector is poised to grow strongly aided by rising demand across all segments, favorable government policy and improving technology.
Our expansion plans include a 1 gigawatt Topcon cell and module line expected to be completed by Q1FY26 and a 4 gigawatt Topcon Cell and Module Line expected to be completed by Q1 FY27. With these facilities, our total capacity would reach 7 gigawatt per annum for solar cells and 9.1 gigawatt per annum for modules by June 2026. Simultaneously, we have planned further backward integration into wafers with a 2 gigawatt per annum facility which is coming up and also this is targeted to be commissioned by FY26, our aluminum frame manufacturing business with a 36,000 metric ton per annum facility to meet our full captive needs and to increase our share of total value addition and profitable margin.
We remain focused on achieving timely completion of new projects which makes us well placed to benefit from the growing solar power demand. We are constantly strengthening our technical and operational capabilities to deliver value enhancing opportunities to our stakeholders. I look forward to sharing more details of our progress with all of you in years to come. Thank you and we are now open to questions.
Questions and Answers:
Operator
Thank you sir. We will now begin the question and answer session. Anyone who wish to ask a question is press Star and one on their touch tone telephone. If you wish to withdraw yourself from the question queue, you may Press Star and 2. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
We have our first question from the line off. Deepak Krishnan from Kotak Institutional Equities. Please go ahead.
Deepak Krishnan
Hi sir, Am I audible?
Chiranjeev Saluja
Yes, Deepak, you are audible.
Deepak Krishnan
Yeah. Congratulations on a good show. Just wanted to sort of understand. And first on margin performance. So obviously with the LCC cell mix is, you know, favorable as well as utilization has gone up. But anything else from a cost perspective that would sort of work as a lever for us in this particular quarter?
Chiranjeev Saluja
I think it’s mostly operational efficiency and plant utilization. You see a significant uptake in the plant utilization factor. Cell plants take time to stabilize, as I’ve told. And as we keep running them, the operational efficiency goes up. And this is what you’re seeing in, you know, utilization capacities.
Deepak Krishnan
Sure. And maybe just wanted to sort of. Maybe this is for MK sir. More just wanted to understand. So if I look at Q2 versus Q3, our other expenses was closer to, you know, about 193 crores last quarter and it’s come down to about 107 crores this quarter. So you know, which number is sort of a more normalized number to sort of look at from a regular basis. And anything either in the base quarter or this quarter that you want to sort of call out as, you know, some gain or, you know, maybe the previous quarter at some heightened provision or anything of that sort, anything that you would like to call out.
Operator
Ladies and gentlemen, please stay connected them. We have dropped the line for the management while we reconnect them. Ladies and gentlemen, the management is back with us.
Nand Kishore Khandelwal
Yeah. Jeez. For this call getting disconnected. So Deepak, your question was on the other expenses, right?
Deepak Krishnan
Yes.
Nand Kishore Khandelwal
Yeah. So I think we had explained in the last quarter that we had kept provisions for warranty which was a, you know, provision put in that quarter and hence you see that difference.
Deepak Krishnan
So I would say this quarter number is a more regular steady state number to kind of take going.
Nand Kishore Khandelwal
Yeah, yeah, sure.
Deepak Krishnan
And maybe just wanted to look at the order book as well. The 69 billion order book that we have. Yeah. What would be the sort of. Because if I sort of take a, you know, $0.15 realization, I roughly get, you know, to gig out of module and 2.6 gig out of cell, similar to the number that you’ve indicated. Any rough timeline in terms of when this entire book will sort of get executed?
Nand Kishore Khandelwal
Yeah. So most of the orders are, you know, having a cycle of not more than 12 to 15 months. In our investor presentation, we have also shown what the order book was in September and what is the volume sold and the new orders. So you see a positive uptick there where the volume sold was 17,000. Yes. Million as against an order book of 22, 3, 99 million.
Deepak Krishnan
Sure. Maybe just one final question. How are the sort of DCR module and sell prices trending on a QQ basis? We see there is a certain uptick on the sell price front but maybe not that much on modules. Just wanted to sort of reconfirm that.
Nand Kishore Khandelwal
So it’s not. There’s not been a significant uptick as such. Prices are quite stable and the demand also is very, very strong. So we are not seeing any significant change as such. Quarter on quarter.
Deepak Krishnan
Sure sir, those are my questions. I’ll get back to them.
Nand Kishore Khandelwal
Thank you.
Operator
Thank you. We have our next question from the line of Aman Jain from Burstein. Please go ahead.
Aman Jain
Yeah. Hi sir. Congratulations with that set of numbers and thank you for taking my questions. So I have two questions. First, rooftop solar, like if you can give some color, like how much is it contributing to our domestic sales?
Chiranjeev Saluja
So you’re talking about the rooftop solar market or in terms of. As far as we are concerned, whether it’s rooftop solar or it is fucum, it’s a DCR product which is a domestic content requirement product. The DCR rooftop demand also is increasing. I think Vinay can throw some light on the size of the whole DCR program. Vinay? Vinay, are you there?
Vinay Rustagi
Hi, can you hear me?
Chiranjeev Saluja
Yes, yes.
Vinay Rustagi
Yeah. Hi Aman. So you know, just to kind of give you an idea about the rooftop solar market size, the PM Sujekhar Yojana has a target, we believe of about 25-30 GW to be implemented by FY26. Although we think that that scheme might kind of just rollover for one or two more years. This year so far we’ve already seen 8.5 lakh installations. We expect the annual phase to pick up to about 20 lakh installations over the next year onwards. So that should be a market size of 6 to 7 gigawatts in the residential side. On top of that I will add, I would say about 2.5 to 3 gigawatts on the corporate side. So we do expect the rooftop market alone in India to touch about 9 to 10 gigawatts over the next one to two years.
Aman Jain
Yes. Of our current sales, how much is it contributing to rooftop solar? I mean of our domestic sales currently, how much is it? How much is going to rooftop solar in terms of percentage or any figure that you can get.
Chiranjeev Saluja
So it’s very difficult to track that because we sell solar panels to various integrators. But if you ask me for a number out of our DCR sales today, rooftop could be around 25% but it’s significantly growing.
Aman Jain
Got it, Got it. Thank you. And my second question, like, in terms of order, in terms of execution, if you can give some color, so supposedly by the time of delivery, if the input prices go up, so how the order book is executed, is it index to some variable and does the do the customers have an option to exit? Is it binding? If you throw some color over there.
Chiranjeev Saluja
So most of the contracts which are signed by other or in the industry, most of these orders are wafer variable. If It’s a non DCR it is a cell variable and it’s mostly on a dollar cent. So even the currency is variable. So I think 90% of the industry works on this. There are some small spot orders that you don’t have this so them have the variable contract.
Aman Jain
Okay. And do the customers have an option to exit or the orders are binding?
Chiranjeev Saluja
So it depends the customer, if he’s entering into a long term contract then he will based on the contract, you know have an option to exit or to continue. So it depends from customer to customer based on volume, based on the…
Operator
Ladies and gentlemen, the line for the management got disconnected again. Please wait for a while. Ladies and gentlemen, we have the management back with us. Ladies and gentlemen, we have the management back with us. Over to you sir.
Chiranjeev Saluja
Yeah, so Aman, as you are telling you it depends on the tenure of the contract, the quantum, the advances we have got from them. So it’s not, it depends on the contract if it’s a not a very large but a very long contract and if it doesn’t have significant advance then of course they could back up. But most of the contracts with PF sign are all firm contracts. The order book which you see in the presentation is firm with advances received. We have not taken any framework contract into our order book. Got it?
Aman Jain
Got it. Thank you so much sir for your answer. It’s clear. Thank you.
Operator
Thank you. We have a next question from the line of Nitin Arora from Axis Mutual Fund. Please go ahead.
Nitin Arora
Hi sir, good evening, thanks for taking my question. Hi sir. So just first question on the order book because it has been a very strong order intake. How has been I am sure you must be doing that checks where the land bank has been given or not. So in the current order book, you know how’s your assessment in terms of you know the developer land bank is pretty much is owned with them and how much is your visibility there? That is first.
And second with respect to inquiries as you started the call saying there are a lot of inquiries happening and demand is pretty strong. Can you throw some light across segment with respect to DCAD because of — also because you know the. If a developer is bidding today, he must be keeping in mind that he has to take the sell from the domestic player as only. So in that context, you know, we need to. The question was more that are there capacity have come up recently because we don’t see much capacity on the sell side coming up. I mean except you which you are saying you will commission in Q1. So you know, just to get a little bit sense on the pricing side. This demand is so strong and not much enough. Capacities are still coming on streamline though everyone is talking about it. How do you see that scenario over the next one or two years from the capacity angle as well? Then I have two more questions. Thank you.
Chiranjeev Saluja
Sure. So Nitin, first is on the. On the developers. We generally work with large developers. Most of these developers are backed by large fund houses and of course we do our due diligence to ensure that even developers themselves would make sure that they have everything in place because they place order for modules or get into contract because modules is the last thing to come out of the site. Yes, there are issues in some places where the goods are ready and the sites are not ready. So this is an ongoing process but it’s not a significant issue for us and we do take care to ensure that the developers are also on track with their EPC and their land. Progress coming to the DCR demand and the capacity, we are seeing substantial progress with the demand from the government side. I agree with you that a lot of cell lines are not coming. It’s not easy to set up cell lines. This is what we have been saying from the starting that, you know, it’s not easy to set up cell lines. But then there are companies which have been working on it. So Tata has already come up, Vadi has announced trial runs for the cell lines. So this is work in progress and we feel that this should not be a challenge with ALM List 2 coming up in June 26th. But then yes, not all lines would come up, not all announcements would be successful. But then we are seeing the positive direction that people are announcing and work is in progress.
Nitin Arora
Got it. Just last question on this global front, I know there are a lot of noises happening with respect to Trump removing the Inflation Reduction act and IRA for the renewable as well. Can you throw some light that, you know, let’s say before the ira, you know how much the industry used to do there on a rough sense because we get this number closer to about 30 gigawatt sort of. You can correct me if I’m wrong. And when we look at the capacity. Cell capacity only for us, because he’s already banned China, Mexico and other countries. Only for us, though there are a lot of announcements, but when we look at the Commission capacities is hardly in numbers. So if you can correct me on that.
Chiranjeev Saluja
Trump has put a pause on the ira. He’s not cancelled it. And second is I think we need to give time to the new regime in the US to settle down. I think we do understand that there are the line get cut again.
Nitin Arora
No, no, you’re audible sir, please go ahead.
Chiranjeev Saluja
Yeah, yeah. So we need to give time. You know, we are also navigating issues. But what we need to understand is we as a company, our year to date exposure on US market is only 2.11% because we have a better realization and we want to focus more on country rather than come.
Operator
Ladies and gentlemen, the line for the management got dropped. Please stay. Ladies and gentlemen, we have the management back with us. Over to you, sir.
Chiranjeev Saluja
Yes, could be. Could we get the question clear, sir?
Nitin Arora
Basically the question was more on the. Before the ira, you know.
Chiranjeev Saluja
Yes, you were talking about the ira. As I said before the ira. What we have seen is, as you said rightly manufacturing capacity in the US has come up into 25 or 30 gigawatt for modules. But for cell, the capacity is insignificant. We are aligned with you on that and which also means there is a good opportunity for export to the US and the IRA incentive which has been paused, only delays manufacturing to come up in the us it doesn’t reduce the market size as such. So there is a Demand in the US and US has been doing about 20, 25 gigawatts year on year in terms of deployment. But I think we should wait and watch and it doesn’t affect us as a company, but we will be monitoring this situation. And this is the reason why we have kept our cell line investment in the US under review. Because we will wait for clarity before we spend any money on the cell line.
Nitin Arora
That’s helpful, sir. Thank you very much. I’ll come back in with you. Thank you.
Vinay Rustagi
I mean just to add to that, of course the cell capacity in the US is very, very limited. But then you have the thin film module maker for solar which has a capacity I think of more than 10 gigawatts. So there is some supply that is coming from first solar display.
Nitin Arora
Got it. That’s it. Thank you.
Operator
Thank you. We have our next question from the line of Nidhi Shah from ICICI Securities. Please go ahead.
Nidhi Shah
Thank you so much for taking my question. I would also like to congratulate you on a great set of results. My first question is that. My first question is that we know that the ALM1 is to be implemented from June 26, but has the process of collating the list started and by when can we expect the list to be out and what would the process look like?
Chiranjeev Saluja
So do you want to take this question, Vinay?
Vinay Rustagi
Yeah Chiranjeev, I can do that. So no, the process has not started. I think we will see a growing number of capacities come online over the next year or so. Typically the process of enlistment and approval for ALM takes anything between three to six months. Given that the whole process is expected to kick in from June next year we expect the government to start collecting this data sometime towards the end of this year.
Nidhi Shah
Okay, thank you so much. My, my last question would be that the 1 GW topco online I can see from your presentation that we have delayed the commissioning by one quarter. What is the reason for that and are we facing any delays or issues in getting equipment and things like that?
Vinay Rustagi
So no we are not facing any issues in getting equipment. There has been a marginal delay. Originally we had said March of this year. We are now expecting it to happen sometime around mid May or maybe end of April. So we have to be transparent with the market share, the revised marginal delay.
Nidhi Shah
All right, thank you so much and all the rest for the rest of the year.
Chiranjeev Saluja
Thank you Nidhi.
Operator
Thank you sir. We have our next question from the line of Sanjay Mukim from JP Morgan. Please go ahead.
Sanjay Mookim
Thank you. Good evening Chiradiv and yes, good evening. A couple of questions on the numbers. If I read the presentation right there’s been a sharp increase in the net debt number. Qoq, could you talk us through that?
Chiranjeev Saluja
So I think the net debt number would have gone up because of the deployment of the 1 gigawatt facility, right? NK can take this question.
Nand Kishore Khandelwal
Yeah. So there is an increase in net debt number primarily because of the method of calculation. Earlier we had actually not considered reduced the IPO proceeds also but that was not a correct depiction. So this time we have removed IPO proceeds from the total not removed IPO proceeds from the total debt because it is for a project specific requirement.
Sanjay Mookim
Sorry, just to clarify that Mr. Khandelwal, so when you say your net debt number is 1917 odd crores you probably have IPO proceeds of 1200 crores. So the, if I were to subtract that the net debt is somewhere around 700 crores, right? On a balance sheet.
Nand Kishore Khandelwal
Yeah, yeah.
Sanjay Mookim
I see. And you’ve been advised not to remove that cash. I’ve not seen this before.
Nand Kishore Khandelwal
It is raised for a project specific requirement and it has to be parked as separ for usage into that particular project. Last time when we released the numbers that time we had reduced it from the overall debt. So there is a difference in the method of calculation of net debt.
Sanjay Mookim
Okay, if I may just follow up on the detail a little bit. Mr. Khandelwal, this money was received in the early September, right? Yes. But if I look at the net debt. Yes. If I look at the presentation, the net debt end 1Q and net debt end 2Q is flat. I mean that should have gone down if you had added the money from the IPO.
Nand Kishore Khandelwal
Which one? Q2 and Q3. You are comparing.
Chiranjeev Saluja
Q1 and Q2, Mr. Kaniva? Q1 and Q2 1 and Q2? Yes. If you had added. Yes. Shouldn’t Q2 have gone down 42 versus…
Sanjay Mookim
1017 at the end of Q2. So if you had added the IPO money back then shouldn’t Q2 number have been much lower?
Nand Kishore Khandelwal
No, we had not. No, we had actually reduced last time. So it was coming negative. I think just to see this, right? It was negative last time it was negative. That’s what you are saying, man. And this time.
Sanjay Mookim
Yeah, the slide says it has went up between June and September the net debt number even though you’re saying that the IPO money was added which you have now removed.
Nand Kishore Khandelwal
Okay, let me take the numbers correctly once again and then I’ll come back to you.
Sanjay Mookim
Sure. Thank you. The second question again on the detail. The depreciation seems to have gone up noticeably. Qoq, has there been some commissioning?
Chiranjeev Saluja
Yeah, so I can answer this question. The depreciation again has been a management call on the terms of the life of the equipment, in terms of technology, in terms of raw material availability. And management has taken a conscious call on depreciation numbers on the. Based on the equipment.
Sanjay Mookim
So you’ve reduced useful life assumptions, is it?
Chiranjeev Saluja
Yeah, it’s based on useful life, on technology, on availability of raw material. So a lot of factors have been taken into while arriving at this.
Sanjay Mookim
Right. Thank you Jerry. Just one question on the ALM list two in follow up to the earlier query if the list is not yet ready but I understand that people who are now bidding will have to incorporate DCR requirements. How does a developer decide who to buy from the list will not be ready for?
Chiranjeev Saluja
Yeah, so the developers have already started contacting cell manufacturers and developers are also talking to companies who have announced cell manufacturing and it has been a very clear direction. Unlike the ALM which was announced for the module this time the ministry has been very clear that please take into account that you have to use cells made in India and appropriately, you know, bid for the PPAs. So developers have understood this point and they have, you know, been discussing with manufacturers like us and accordingly putting in their bids for the ppa.
Sanjay Mookim
Right. And so this is on the assumption, Chiranjeev, that any developer will make that if you are making in India, you will be on Almighty.
Chiranjeev Saluja
Yes. If you are already a cell manufacturer then obviously we’ll be in the list.
Sanjay Mookim
Okay, thank you. Those are my questions. Thank you very much.
Chiranjeev Saluja
We’ll come back to you on that question which NK is just checking.
Sanjay Mookim
That will be very useful. Thank you.
Chiranjeev Saluja
Sure.
Operator
Thank you. We have our next question from the line of Gopal from SBI Life Insurance. Please go ahead.
Gopal
Hi sir. Thanks a lot. Hi. Yeah, one of the question was on this net debt only. So whenever you are able to clarify, please clarify on that. Yes. And second one, in this current order book, what will be the export percentage?
Chiranjeev Saluja
Our export percentage is going to be limited to 3% because as I told earlier we are committed to Indian market. So we will be restricting our exports even though there is a significant demand from the us. But the management by choice is very clear that focus is dedicated towards Indian market. And there is a very strong demand here. So we will limit it below 3%.
Gopal
And we had a plan to invest in the US for cell manufacturing.
Chiranjeev Saluja
Yes, we still have this plan. We have just put it under review because we are waiting for the regime in the US to settle down and be clear on what they want to do. As of now we have only heard and read that Ira has been paused by the Trump administration. We are hearing a lot of statements but we still do not have clarity. And as the company we have taken a conscious decision not to move ahead until we get full clarity on this topic.
Gopal
And sir, on order book side, will you be able to give some color in terms of breakup between module selling?
Chiranjeev Saluja
It’s already given in the presentation. I think about 30 odd percent is for cells which is already shown in the order book. 36% is for sales, 1% for EPC and 63% for module. The module order book would also include non DCR and DCR modules both.
Gopal
Okay. And so this order starting point of September 24 is 6,400 crore.
Chiranjeev Saluja
Yes. And then there is…
Gopal
6,200 crore order book.
Chiranjeev Saluja
Pardon me, could you repeat that last quarter presentation?
Gopal
It shows 6200 crore order book.
Chiranjeev Saluja
Okay, let me just check that number in the last presentation and come back to you.
Gopal
That was one and second was. It was. I was just, I’m sure that’s a very crude way to calculate. I was just calculating the you know average per megawatt on order book. But this is like you know down by 2, 3% quarter on quarter. There is no change in the pricing is what we have mentioned.
Chiranjeev Saluja
So there is, there is no, no significant change in the pricing which I answered this question earlier. Also the market looks to be quite stable. In fact in the non DCR segment there’s a slight increase in the pricing because of duty imposed on glass. So overall the pricing has gone up a little bit in both DCR modular, non DCR model because glass duty has been a pass through for us and hence there is a slight increase rather than a decrease. And even in China we are seeing now prices have started going up. They were. We are now seeing an increase in prices in China. So the gap between you know, Indian models and Chinese modules is gradually reducing because China has now started increasing prices.
Gopal
And sir, in terms of revenue mix this, you know 25, 30% from cell. This is the right assumption to take for next year or it will increase in the financial year 26.
Chiranjeev Saluja
So it depends, it’s market dependent as of now. This is what is what is shown in the order book matrix. But yeah it depends it could change.
Gopal
Okay. And would you be give some guidance on ebitda margins for 26 and 27?
Chiranjeev Saluja
Sorry, could you repeat that question?
Gopal
EBITDA margin guidance for FY26 and 27.
Chiranjeev Saluja
As a policy we do not give any guidance. You have been seeing our performance and you know the company and the management is all working towards the best performance. We generally do not give any guidance as a board policy.
Gopal
Okay.
Chiranjeev Saluja
And the question on that order book, I think that was not for the 30th of September that was for. It was for November first week it was not for September. The number which you’re seeing.
Gopal
Okay, okay, sure.
Chiranjeev Saluja
The 6200 numbers was as of November not September.
Gopal
Yeah, sure. Thanks.
Operator
Thank you. We have our next question from the line of mayur patel from 361asset management. Please go ahead.
Mayur Patel
Hi, thanks for the opportunity. Great set of numbers. Chiranjeev and the team. So just one. Most of the things got covered. Just one question. 6900 crores of audible. Shall we assume that this is at the current. So like you delivered around 30% margins in this quarter and it’s a function of whatever cost, but also a function of the price of modules in DCR and non DCR and the price of cells which goes largely. So it is. Shall we assume this orders. These orders are also at the current price and if you want to model it according earnings for next year, we can do it that way.
Chiranjeev Saluja
Again it could be a, you know, a guidance for future. So I’d like to avoid that. But as you see, quarter on quarter, we have been in the range of between 25 to 30. As what you have seen in today’s results, that could be an indicator, you know, that will be in this range.
Mayur Patel
Okay, got it. Fine. Thanks. I don’t have any other questions. And all the best. Very strong set of numbers. Thank you.
Chiranjeev Saluja
Thank you so much.
Operator
Thank you. Yeah, our next question from the line of Gurnesh, please go ahead, Mr. Gunes. We will move on to the next participant from the line of Piyush. Seval Dasan Tasnani from Sundaram alternates. Please go ahead.
Piyush Sevaldasani
Hi sir. Thank you for the opportunity and congrats for great set of numbers.
Chiranjeev Saluja
Thank you.
Piyush Sevaldasani
My first question is on the pricing on that the Chinese pricing is further going down. But I think previous participant you mentioned that you seeing that it is again going up. So just wanted to understand that is it a complete passport for us or would it have an impact?
Chiranjeev Saluja
Yes, as I said, Almost 90% of our order book is passed through. There are some orders which are spotted but otherwise, you know, when we sign up any contracts for DCR cell, the wafer is the pass through. When we sign up contracts for DCR module, there again wafer is a pass through. And when we sign up non DCR orders, the cell is a pass through. So and this is an industry norm, it’s not something which Premier is doing because of the volatility. You know, it’s generally a pass through.
Piyush Sevaldasani
My next question is on the depreciation. I understand that. I think 1 gigawatt of cell and 1 gigawatt of module is getting something in first quarter. Can it help us understand what is the amount of time? What is the amount that will be capitalized?
Chiranjeev Saluja
Could you, could you repeat it? Because your voice is smudging. Could you Repeat that again?
Piyush Sevaldasani
1 gigawatt of spell and 1 gigawatt of module I think is getting capitalized in the first quarter. Can you help me understand what would be the amount that would be capitalized and useful life for that.
Chiranjeev Saluja
So it’s a topcon cell line, the 1 gigawatt of cell line. The spend budget is Generally it’s about 600 and odd crores per cell line, could you give the capex numbers for 1 gigawatt of selling 1 gigawatt module and then module is about 175 crores.
Piyush Sevaldasani
And useful life?
Chiranjeev Saluja
So generally we. I mean being a topcon line. Generally we. We generally take useful life to be about five years. We generally depreciate our equipment in five years. Sometimes even earlier. Management takes a call based on the useful life of the equipment and technology. But generally we take five years. The total investment, the numbers which you were talking about is the 6694 million for cell line and 1523 million for module nine.
Piyush Sevaldasani
Sure, sir. Thank you.
Operator
Thank you. Ladies and gentlemen. In order to ensure that the management is able to take questions from all participants in the conference please restrict yourselves to two questions per participants. Should you have a follow up questions we request you to rejoin the queue. The next question is from the line of Shivanshu Gupta, an individual investor. Please go ahead.
Shivanshu Gupta
Hi sir. Am I audible?
Operator
Yes, you’re audible. Chivansh.
Shivanshu Gupta
Yes. Hi sir, I am one of the investors from ipo. Thank you for taking my question. I wanted to understand. In terms of capacity utilization in the slide 21. So. So like leaving aside the. The. The new CAPEX plans are we at a peak capital capacity utilization for cells and modules?
Chiranjeev Saluja
For module there is still some scope. But for cell we are almost at the peak in this quarter.
Shivanshu Gupta
Understood. Understood. And for the. For the order book guidance you said most of it is domestic. Over 95%.
Chiranjeev Saluja
Over 97% is domestic. Yeah, those. As a company we generally are below 3% for exports. Year to date as of today is 2.11%.
Shivanshu Gupta
Understood. Thank you.
Operator
Thank you. We have our next question from the line of Swati Junjunwala from GM Financials. Please go ahead.
Swati Jhunjhunwala
Yes. Thanks for taking the question, sir. On exports, I think I missed it. Do you see exports to go very big now that you know what the global environment is like or do you expect it to stay at this level? Because on a YTD basis we’ve degrown by close to 70%. So. So that’s my first question on C4.
Chiranjeev Saluja
Yeah. So as I have stated earlier that we as a company have taken a conscious call that we want to serve the country first. And we give priority to domestic orders. And our focus is always been to make sure that we are, you know, making, you know, the products available for the government sponsored projects in India. That’s a priority for us. All our capacity expansion is also planned keeping in mind the domestic demand. So as of now this is our focus is we want to retain, you know, ensure that, you know, our exports are not more than 3% on an annual basis. But going forward as capacity is built up in, you know, India and maybe the demand in us is very strong, we would take an appropriate call at that time.
Swati Jhunjhunwala
Understood. And on the net debt part, I think I understood what the Delta of that 1291 crore was versus you know, in Q2, what you had reported versus right now. Just wanted to understand if you are not deducting the IPO proceeds from the net debt as of now, what does it, I mean what does that pertain to since that 1291 crores is for a specific project. So if you could just break down the net debt, if you could. Because optically it looks like this 1900 crores should come down by 1291 crores to give us sort of 600 crores net debt.
Chiranjeev Saluja
So yeah, I think we had, we had, we had parked this question for our group CFO NK to come back. We will come back to you on this question.
Swati Jhunjhunwala
All right. And lastly on order book, so could you give order book number of last year December, that is 2023. December Q3, FY24.
Chiranjeev Saluja
I have to pick out that number. December 23rd or the book number. Yeah, we will make a note of this and we will, we will respond to you.
Swati Jhunjhunwala
Sure. All right, thank you.
Operator
Thank you. We have our next question from the line of Akash Mehta from Canada HSBC Life. Please go ahead.
Akash Mehta
Hi sir. Congratulations on a good set of number.
Chiranjeev Saluja
Thank you so much.
Akash Mehta
Yeah. So just one question. In terms of the new cell and module capacity which is kind of coming through of one one gigawatt each, how do you see the ramp up happening? I mean will, I mean when the cell capacity kind of timeline in terms of ramping up in terms of utilization or it will be faster than what we have seen previously?
Chiranjeev Saluja
No. So we will, we will of course replicate or be a little better than what we have done in the past. Because of the experienced team and the 14 years of knowledge which our team and our company has on cell manufacturing, we have projected that, you know, we will be able to commission and ramp up within three months of commissioning. We are looking at a middle May commissioning and you know, ramping up our production within three months of that and then, of course, it takes time. We would not reach 96% in the first quarter, it’s going to be gradual but we will try to better what we have done in the past. It should be better than that.
Akash Mehta
So I mean we can, we can see at least, I mean more than 50, 60% after 1/4. I mean that’s what we can.
Chiranjeev Saluja
Yeah, of course, 50. 50 is a safe number to assume.
Akash Mehta
Okay. Okay, that’s it from my side. Thank you.
Chiranjeev Saluja
Thank you.
Operator
Thank you. We have our next question from the line of Chaitanya Junjunwala from Grow Mutual Fund. Please go ahead.
Chaitanya Jhunjhunwala
Yes, thanks for the opportunity and congrats for the great set of numbers. Yeah, I had a question on the provision side. So basically last quarter we had taken a ad hoc provision for the warranty warranty. Right. So I wanted to ask whether we are taking this provision regularly because the model. No. Every module, but every module that you manufacture has an inherent provision for warranty. Right.
Chiranjeev Saluja
So it depends. Some customers opt for third party insurance where warranty is already covered under the third party insurance program and some don’t. So management had taken a call for that provision in last quarter. We do not need to put in a similar number every quarter.
Chaitanya Jhunjhunwala
Okay, sir, understood. Thanks a lot.
Operator
Thank you. We have our next question from the line of Bharani from Evanders park, please go ahead.
Bharani
Yeah, good evening, I’m just trying to.
Operator
Sorry to interrupt, sir. Can you please be a little louder?
Bharani
Is it better now?
Chiranjeev Saluja
Yes, I can hear you.
Bharani
Yeah, yeah, sorry. Yeah. So I just want to understand the rationale behind the basic customs duty cut and the government has done on cells and modules and, and how it will impact our prices.
Chiranjeev Saluja
So we don’t see any change in the customs duty. I think what the government has done in the recent budget is that the duty on cell remains as to what it was, it has just been bifurcated. I think I leave this question to Vinay. He’ll be able to answer this better. Vinay, on the customs duty, please.
Vinay Rustagi
Yeah, sure. So as said, there is no effective change in the level of duty which has to be paid by the importers. All that the government has done, they have reduced BCD on various items to basically cut the number of slabs of bcd. This is some kind of a tax reform. But all the reduction in the BCD that you see on cells and modules is basically offset by an equivalent amount of levy of an agricultural share. So effectively the total amount of duty that the importers have to pay remains the same, which is 44% net on modules and 27.5% on sales.
Bharani
Okay, so essentially the impact on our say attractiveness from price point of view compared to China remains the same before the announcement.
Chiranjeev Saluja
Yes, There is no change in the economics either for the buyer or for the seller. It is just a definitional tweak in terms of how the different duties are structured and named.
Bharani
Sure, understood. My second question is kind of numbers. I want on demand in say India and usa. So apologies if it is basic, but could you spell out what would be the annual demand for modules from India and if you can split that between DCR and non dcr and what would it be in us?
Chiranjeev Saluja
I think Vinay, you should take this question also.
Vinay Rustagi
So if you see the historic numbers, India did a record capacity addition of about 24 GW AC in the last calendar year. That is 2024. That is equivalent to a total demand of about, I would say somewhat not of 30 gigawatts over the year. We expect that number to grow by about 15 to 20% year on year over the next three to five years. So we are basically looking at a demand, a module demand of something close to like 50 gigawatts during this period. And in the US there is. The scenario is not so clear because of the policy confusion. And you know what, whether IRA is applicable, which parts of IRA remain applicable or not. But the annual Demand in the US has been about 25-30 GW over the last few years. And this year onwards we are not very clear. We kind of are waiting for the policy clarifications to emerge only after which we can know about likely demand from the US.
Bharani
Okay, follow up to that question. Of the 30 gigawatt annual DC demand, how much would be DCR, how much would be non DCR?
Vinay Rustagi
So if you look at the market on an annual basis currently there is, I would say looking at the new year 2025, we expect about 5 plus gigawatts of demand, BCR demand to come from the residential rooftop market. We expect, I would say between 8 to 10 gigawatts of demand to come from the Kusum market, the agricultural solar market and a few more gigawatts to come from the PSU market and some specific projects of the government. Having said that, if ALM is implemented from next year, June 2026 onwards, as the plan is, then the entire market is going to turn into a DCI market in a matter of less than one and a half years.
Bharani
Sure, that is clear. I’ll fall back in the queue. Thank you so much.
Operator
Thank you. We have our next question from the line of Pratik Kumar from Jefferies. Please go ahead.
Prateek Kumar
Yeah, good evening sir and congrats for great results. My first question is on your order book. So when you say order book, what defines is it the advances or is it some kind of mou? How do you define your order book?
Chiranjeev Saluja
Yeah, so let me clearly state that all our order book is firm order book with advances received. We never as a policy put in anything in the order book which is even a framework agreement which can be cancelled. So it’s all firm order book, contract sign with advances and it’s, it’s not a framework or an mou.
Prateek Kumar
Right. And these advances will amount to like how much percentage of the value of the product.
Chiranjeev Saluja
Generally depends on contract to contract it would anywhere range between 5% to even 20%. So it depends on the quantum, it depends on the delivery timelines.
Prateek Kumar
My other question is on, on your, I mean other technology transfer from China. So you’re talking about two gigabot commissioning of wafer and maybe like looking for more projects in that segment. But is there any technology transfer issues which have been like sort of talked about in media there from China in this segment.
Chiranjeev Saluja
So yeah, we have also heard of some issues. Our wafer manufacturing is with the Taiwanese partner. So we don’t have a technology issue here. But yes, we have heard of certain issues on equipment supply from China. There are certain vendors who said that, you know, government is really pushing for not selling equipment to India, but you could sell it to any other country that there are certain vendors of equipment in China who say we have no problem. So there is no clarity on that. We have not faced any significant issue and we have been getting our equipment and we will navigate issues as and when they come up. Because a lot of equipment suppliers now in China are setting up shop in Vietnam, in Malaysia, in different parts of Southeast Asia and I think we don’t see a major threat there as of now.
Prateek Kumar
Thanks. And the last question on ALCM, so June 26th is the timeline, but ALM got delayed by one year because of not readiness for the industry. So the capacity additions for sale remains low at this point. Is there any chance of like the sales team also getting sort of delayed if the industry capacity is not online?
Chiranjeev Saluja
I would not say no. There could be a possibility that the ALCM gets postponed by six months but that would not mean any kind of exemption. It would only be an additional timeline given to developers to commission their projects. Because the government has given clear, you know, in their being very clear in their geo that they have to consider Indian made cell. I mean just to add to that, you know, ALM1 obviously was in new policy and created a lot of confusion in the market and disruption for both module suppliers as well as for the customer end customer that is itps.
And I think what has happened is that the government has got a lot of feedback from the market or stakeholders on implementing LMM2 and they have issued a much clearer set of guidelines on how this is to be implemented. Including for example for saying that all projects which have been bid after December 2024 will have to comply with ALM2. So there is a pretty forward looking guidance. There is also a reasonable confidence that given all the planned by all these companies as part of the PLI scheme or otherwise they’ll be, you know there is a significant amount of capacity addition coming on on the sales side. So you know obviously one can never rule out whether the policy, you know, what will happen to policy in future but we expect a much clearer thinking on part of the government and not to have anything like the kind of confusion that we saw with element one.
Prateek Kumar
Sure. Thank you sir, these are my questions.
Operator
Thank you. We have our next question from the line of Subramanian Yadav from SBI Life Insurance. Please go ahead.
Subramaniam Yadav
So just wanted to understand on the capacity utilization of the cells why there has been a sudden increase from 77% to 96% and how sustainable is this 96% number?
Chiranjeev Saluja
So 96 number is sustainable. As I’ve told earlier, cell lines take time to stabilize and it’s a process driven industry. And there is another reason for these percentage of utilization to go up also because China has moved from M10 wafers to M10 plus or what they call is the M10R wafer which is a larger format wafer and hence the wattpage output. What we get from the same wafer is about 4 to 5% higher than what a normal M10 wafer would give. So this also contributed in the utilization because you’re seeing the utilization and percentage but in megawatt terms every cell on an M10 wafer is slightly higher on the watt peak compared to an M10 wafer. And our guidance is that this will be now the norm. Plus or minus, you know, 1 or 2% is what we are going to be achieving.
Subramaniam Yadav
Okay, and what about the module sir? From 74 to what would be our peak in that? So on module lines we have seen that, you know, you need to actually change the product mix. People are still buying different wattpick of modules. Some people are. There is a demand for monoperk and topcon and then there’s somebody wants glass glass and somebody wants monofacial. So when you do these changeovers you lose efficiency in a module line. But based on customer orders we need to do that. So module and is a different beast compared to cell line. And because in cell line you’re just producing one format of wafer continuously and then you so modeling also we see that there should be a little bit of increase, but it will not be so significant.
Chiranjeev Saluja
Okay, okay, fine. But we can take a session. If you see our number number who had dropped from 82 to 71 and then it’s gone up to 77 has gone up to 96 because the format of the wafer changed.
Subramaniam Yadav
Okay. Okay.
Chiranjeev Saluja
So when the wafer format changed it took time to stabilize the lines again.
Subramaniam Yadav
Okay, so for this refer change would be happening frequently. Right. Then it would be very difficult for us to maintain this 95% capacity. Right. Declaration?
Chiranjeev Saluja
No, I would say no. Because in this format if monopol this is what is the norm now? M10 plus beyond this, if there’s any change, it will only happen in top one lines.
Subramaniam Yadav
Okay. Okay, fine answer. On the module front, what would be peak utilization?
Chiranjeev Saluja
We are estimating it to be around 80. 82%. 80. 80.
Subramaniam Yadav
Thank you sir. Thank you.
Operator
Thank you. We have our last question from the line of Vipra Srivastava from Philip Capital. Please go ahead.
Vipraw Srivastava
Hi, I’m audible right?
Chiranjeev Saluja
Yes, you’re audible.
Vipraw Srivastava
Right. Two questions. Firstly on why the gross margins have declined by 300bps for this quarter.
Chiranjeev Saluja
Just a second please.
Vipraw Srivastava
Sure.
Chiranjeev Saluja
Which slide are you referring to in the presentation?
Vipraw Srivastava
I’m talking about gross margins, sir. It’s the. If you calculate gross margins after subtracting cost of goods sold, the gross margins. So it’s 30. It’s 38% for this quarter. It was 41 for last quarter. Roughly. Roughly. So it’s roughly at 350 times. Yeah, yeah.
Chiranjeev Saluja
So you talk about material margin, is it?
Vipraw Srivastava
Exactly. Yes, yes, yes. Yeah.
Chiranjeev Saluja
Could be because of various factors. We love to come back to you. You know, the Forex has gone up and also material movement, you know, raw metal prices. Sometimes in some cases there is volatility.
Vipraw Srivastava
Okay, let’s not give a correct number quarterly because prices on a weighted average basis.
Chiranjeev Saluja
Yeah. So is the trend in sell price declining in DCR because your sell mix has also gone up?
Vipraw Srivastava
QOQ because of that, has the gross margins come down?
Chiranjeev Saluja
The sell prices in DCR market are not declining. They are similar to what they were. They could be a change of maybe, you know, 2% here or there. There’s no decline we are seeing in sell margin as of now.
Vipraw Srivastava
Sure, sir. And so last question. One of your clients, Shakti Pumps in the con call has been highlighting that they could be facing flood on PM Kushum because of shortage of DCR module. Plus very high DCR module prices. So any thoughts on that?
Chiranjeev Saluja
So DCR model prices went up slightly because of the import duty put on glass. And this is something which was a pass through for all our customers. And you know, because of the glass duty these prices have gone up by almost about 80 paisa, about a cent per watt. And I think Shakti has even updated something today. If you would have seen that they have secured a substantial portion of their DCR requirement and they continue to buy from. Yes. So which, which is positive for them.
Vipraw Srivastava
Right, right. But you don’t see a slowdown happening on PM Kosam because of this? I mean, thoughts on that?
Chiranjeev Saluja
No. So, you know, what has happened is I don’t see any showdown. The problem with PM Kusum scheme, unlike the Suryagarh Mobility Yojana is generally the PM cushion scheme is dependent on the tenders which have been coming out by the respective states. And we have generally seen that all, you know, these kind of projects there is, you know, not a stable demand every quarter. And everybody wakes up in the last four months. Right. And everybody wants to achieve the maximum of what they can for the. For the funds to be utilized before they expire in March and then they are reinstated. So we have seen this issue come up only in the last quarter, a substantial portion, a lot of our customers who had signed annual contracts from us failed to buy the material what they promised in respective quarters by over 15, 20%. It didn’t matter to us because there was a lot of demand.
And then suddenly in the last quarter there has been an unprecedented demand because everybody wants to catch up. So I don’t see any shortage if, if people plan properly and you know, deployment happens. Now, this is not the case in PM Kusum because PM Kusum is spread over, you know, individual customers, right? And they are not running under the pressure of receivables from, from respective states. And projects slow down because of this, I think. So there are two different programs, but we don’t see any stoppage. There is substantial availability.
Vipraw Srivastava
And so lastly, so because of the, because of the Shakti pumps thing, you don’t see any issue with receivables? Can that be problem if their execution doesn’t happen? Can that be a potential problem?
Chiranjeev Saluja
So the demand is so high that I don’t see that as a problem at all. And even government has. I think, Vinay, you could throw some light on the payment process mechanism which the government has made some great efforts and great improvement. Vinay.
Vinay Rustagi
Actually, the payment provisions and custom schemes have been substantially improved. Now the government, the central government makes monies available subject to the state government putting up their share of the funds, which is typically 30, 30 or 30, 40% of the total project cost. I’m talking about solar farms. And so the state governments have to put up their money upfront and the vendors, if I remember correctly, get their money within a set timeline, which is typically 45 days, within 45 days of installation. So the payment process has been completely rationalized and we hear no complaint about the vendors getting stuck with payments with any of the state governments.
Vipraw Srivastava
Okay, sure, sir. Thank you. Thanks a lot. Thank you.
Operator
Thank you. As that was the last question for today, I now hand the conference over to the management for closing comments. Over to you, sir.
Chiranjeev Saluja
Yeah, so I’d like to thank the ISEC team and everybody else who joined the call, happy to see a good participation and also individual shareholders joining. We are committed to deliver, you know, the best what we can for the shareholders. And we will continue to, you know, be very agile and, you know, looking at the situation in the market, navigate accordingly. So thank you so much everybody and a good night.
Operator
Thank you, sir. On behalf of ICICI securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.