Premier Energies Ltd (NSE: PREMIERENE) Q3 2026 Earnings Call dated Jan. 23, 2026
Corporate Participants:
Chiranjeev Singh Saluja — Managing Director
Vinay Rustagi — Chief Business Officer
Analysts:
Unidentified Participant
Mohit Kumar — Analyst
Nidhi Shah — Analyst
Raman Venkata Kerti — Analyst
Praveen Sahay — Analyst
Subramaniam Yadav — Analyst
Nitin Arora — Analyst
Bharanidhar Vijayakumar — Analyst
Kunal Shah — Analyst
Aashish Upganlawar — Analyst
Chandan Rajgadhia — Analyst
Sabri Hazarika — Analyst
Prakhar Porwal — Analyst
Amit Mahawar — Analyst
Puneet Gulati — Analyst
Dhruv Muchhal — Analyst
Balasubramanian A. — Analyst
Deepak Purswani — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Premier Energies Q3FY26 earnings conference call hosted by ICICI Securities Limited. 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 touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities Ltd. Thank you. And over to you sir.
Mohit Kumar — Analyst
Thank you. Huda. Good morning. On behalf of ICICI Securities I welcome you all to the Q3FY26 earnings call of Primaenergies. Today we have with us from the management Mr. Chiranjeev Singh Saluja, Managing Director Mr. Nand Kishore Khandelwal, Chief Financial Officer Mr. Binay Rustagi, Senior Business Officer and Mr. Sudhir Mullah, Chief Strategy Officer and whole time Director. We’ll begin with the opening remarks from the management which will be followed by Q and A. Thank you. And over to you sir.
Chiranjeev Singh Saluja — Managing Director
Thank you. Mohit. Am I audible clearly to you?
Mohit Kumar — Analyst
Yes sir. Please.
Chiranjeev Singh Saluja — Managing Director
All right. Good morning everyone and thank you for joining us today for our Q3 FY26 earnings call. I am Chiranjeev Saluja, Managing Director of Premier Energies and I am joined today by my colleagues. I’m pleased to say that the company has reported another set of record revenue and profit numbers. Our lines are running consistently at best in industry utilization levels and the order book remains healthy giving us both top line and bottom line visibility. Let me talk about some key highlights of this quarter. We have completed a brownfield expansion increasing our cell and module capacity by 400 megawatt and 350 megawatt respectively.
This expansion has been achieved with relatively low CAPEX and shows our team’s strong engineering capabilities. Our 1.2 gigawatt G12R Topcoin cell line has ramped up in relatively short time. Currently operating at 80% utilization and expected to reach full utilization by February 2026. Similarly, we are working on improving efficiency from current levels of 25.2% to 25.8% by the end of this year. Using latest process technologies and know how, this experience will extremely be useful in launching operations of our new 7 gigawatt Topcon cell line. We are now excited and focused on commissioning and ramping up of our new cell and module lines progressively over the next four quarters.
Our 5.6 gigawatt module line is set for completion in March 26, 4.8 gigawatt cell line in June 26 followed by 2.2 gigawatt of cell line in September 26. These capacities would make us India’s largest and most integrated cell and module manufacturer with total capacity of 10.6 gigawatt and 11.1 gigawatt respectively. This would mark an inflection point in our growth journey. I am also pleased to share that work has also commenced on construction of our 10 gigawatt ingot wafer line in Nairupeta, Andhra Pradesh. Our transformer acquisition was completed in December 2025. Transcon is performing very well as seen in the YTD numbers.
With total capacity expected to increase to 16.75 GBA by July 2026 and change in product mix towards more lucrative MVHV and EHV segments. This business is expected to become a key growth contributor for us. Our K Solar acquisition is also planned to be closed in the next one month. Now I would want to briefly talk about two major themes of the interest to the investing community. First, the solar industry has achieved tremendous scale, growing at more than 50% annually over the last two years. India is now the third largest solar market in the world. This growth in demand is expected to continue notwithstanding issues like unsigned PPAs and transmission delays.
The reality is that we have a very large pipeline of signed PPAs providing us strong demand visibilities over the next three years. The PM Suryagarh Rooftop Solar market is seeing huge growth with a record 2.7 million homes solarized in the last 18 months and further 7.3 million installations expected over the next 24 months. Other Market segments like the Kusum Scheme and Open Access Market are also showing sustained increase in installations. Secondly, the cost environment is becoming more volatile with some input costs rising sharply over the last few quarters. We are able to manage this risk effectively through various measures like hedging, advanced planning, strong supplier relationships and passing incremental cost to customers.
Going forward, we are confident that we will be able to compensate for any cost increases without increasing scale and operating efficiencies. To conclude, we have a very exciting growth opportunity with growing demand, continued support for make in India policy and our focused business strategy. Thank you. We are now open for questions.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on their Touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we Will wait for a moment while the question queue assembles. The first question is from the line of Nidisha from ICICI securities. Please go ahead. Good morning.
Nidhi Shah
Thank you so much for taking my question. My first question is on depreciation this quarter. We’ve seen that depreciation halved by and it was only last year in the same quarter that we revised our depreciation policy. So what, what can this decrease be attributed to?
Chiranjeev Singh Saluja
So Nidhi, good morning. And your questions on depreciation it generally depends on you know the industry policy where we depreciate our equipment over five years. In our case we have taken an accelerated depreciation on our monopoly lines. As we speak today our mono perk lines are fully depreciated and you will see further depreciation numbers come up once the new lines get commissioned. I would like also Vinay to share some views on the depreciation and the start numbers.
Vinay Rustagi
Hi Nidhi. So I think basically what has happened is that we did see an increase in depreciation over the last three quarters because of accelerated depreciation on our old cell and module lines. Now that came to an end in the last quarter. So what you’re seeing in this quarter is only the depreciation on our new lines which got operational earlier in the middle of last year. So going forward you will see a more I would say a sustainable and consistent depreciation trend in line with our new assets coming online this year. And the variability will be very less going forward.
Nidhi Shah
And just to clarify the new lines. They are being depreciated on a five year basis. Fit industries, will that also be accelerated?
Vinay Rustagi
Yes. So the industry standard is basically depreciating all these assets within five years which is what we follow. Having said that we do continue to monitor the market and the technology trends and if we feel that because of any of these reasons there is an earlier phase out expected we then tend to undertake accelerated depreciation to transition us to the new technologies.
Nidhi Shah
My next question would be on what is the progress on the capacity addition on the aluminium frames side? Where are we on that? And what is the capex that would. Undertaken in the first nine months of this year.
Chiranjeev Singh Saluja
So on the aluminium front the land is already acquired Nidhi and the equipment order has been placed. The total capex on aluminium is going to be 260 crores and we expect commissioning by December 2026.
Nidhi Shah
And what is the total capex that we undertook in in first nine months across all?
Chiranjeev Singh Saluja
So the total capex that you wondered in the. In this Even the past nine months you’re talking about.
Vinay Rustagi
Yeah, yeah, so that is.
Chiranjeev Singh Saluja
Yeah, please go ahead.
Vinay Rustagi
Yeah, so the total capex was about 750 crores. That is in relation to our new sell in module lines which are coming up in Sitarampur. And in addition to that we have also paid like we have announced 250 crore rupees to Transcon for the first tranche of our acquisition.
Nidhi Shah
All right, this was my question. Thank you so much.
Vinay Rustagi
Thank you.
operator
Thank you. The next question is on the line of Raman KV from Sequent Investments. Please go ahead.
Raman Venkata Kerti
Hello sir, can you hear me? Yes, good morning. Yeah, good morning sir. Congratulations on good set of numbers. So my question is with respect to Transcon, we have order book of 190 crores in Transcon. And what will be the execution cycle? One is that and post the capacity expansion to 16.75 GVA by July 2026 at optimum utilization. How much revenue can we do from this transfer?
Vinay Rustagi
Yeah, hi. So you know the typical manufacturing and order turnaround time for transformers is about four to five months for the low voltage and inverter duty transformers. And basically you can see that from the total order book vis a vis the total and expected annual sales of the company. In addition, going forward the company is now venturing into the larger higher value added transformers. So there the execution cycle will be slightly longer. But overall the transformer business execution and progress is very, very strong. And we are hoping that the company will touch a top line of over 1000 crore rupees in the next two to two and a half years.
Raman Venkata Kerti
Housing crore top line from only Transcon, right?
Vinay Rustagi
Yeah, that’s right. Transformers only? Yes.
Raman Venkata Kerti
Like with the current capacity or this is including the additional capacity with the.
Vinay Rustagi
Current and the proposed capacity. See what happens is the larger transformers there is a reasonably, I would say 6 to 18 month time period for certifications and you know, winning new orders and deliveries of those orders for the customers. So the ramp up of the new lines will happen over a period of about two to three years. And that is why I’m saying that the top line will grow to about 1000 crore rupees plus by FY28.
Raman Venkata Kerti
Understood sir. So just a follow up on this. We as you mentioned that we are venturing into larger heavy duty and high value added segment in the transformers. Do we have necessary approvals?
Vinay Rustagi
By approvals you mean so you know all the expansion work.
Chiranjeev Singh Saluja
Okay, you mean certifications, certifications or even certification? Yeah, that, that is work in progress. Yes.
Raman Venkata Kerti
And do you have A timeline by when you will receive the necessary certification.
Chiranjeev Singh Saluja
So by July 26th we’re expecting the plan to be commissioned. It will take about six months post July 26 for us to get certifications in a progressive manner.
Raman Venkata Kerti
Understood Sir. Answer. I just want to understand this 10 gigawatt ingot paper line. What’s the total capex spent on this and by when are you expecting it to be commissioned?
Vinay Rustagi
Yeah. So for the 10 gigawatt ingot wafers the total expected capex is around 5,900 crores. What we have, you know we are still waiting for the final government announcement for element three. As you probably know what we have announced so far is the first phase of 5 gigawatt implementation expected to be completed by December next year. For the second 5 gigawatt phase we would expect that to be completed in December 28th. But like I said, we are still waiting for the final announcement and may tweak a plan to suit the market growth.
Chiranjeev Singh Saluja
Yeah. And just to add in the meantime the land is acquired, the designing work has started and the building construction work also has started.
Raman Venkata Kerti
Understood sir. And so my final question is with respect to are we venturing, are we venturing into any BESS project or like doing Capex related to Bess product? Yeah.
Chiranjeev Singh Saluja
So we have already announced that on BSS we are setting up a cell to pack and a containerized solution line. The land for this also has been acquired and the factory construction started. We have not announced getting into BSS cell manufacturing as of today. We would want to wait for more clarity from government of India. They have come up with guidelines on localization. Once we get clarity on that then we would look at further backward integration.
Raman Venkata Kerti
And what’s the total CAPEX spend will be spending on this and what will be the capacity?
Chiranjeev Singh Saluja
So it’s 280 crores and the capacity is going to be 6 GWh first phase.
Raman Venkata Kerti
So this is just an assembly line, right?
Chiranjeev Singh Saluja
It is a cell to pack and containerized solution assembly and you know final solution kind of line where we give containerized solutions to our customers. As I said that core manufacturing of cell is something we want to go slow on until we get clarity on kind of protection from government of India as on today it doesn’t make sense for us to invest on backward integration because it is still now open to China.
Raman Venkata Kerti
Understood? Understood. Thank you. Thank you sir.
operator
Thank you. The next question is from the line of Bala Subramaniam from Arihant Capital.
Chiranjeev Singh Saluja
Please let it be what is the related month?
operator
Sir, are you there? As there is no response, I’m taking the next question from the line of Praveen Sahai from PL Capital. Please go ahead.
Praveen Sahay
Yeah. Hi sir. Thank you for opportunity. Can you give a detail related to the order book of your own? You know the module and cell bifurcation is there. How is the in the model DCR order book or non DCR if you can give some color on that.
Chiranjeev Singh Saluja
Yeah. Hi, good morning. So our order book as we had shared is as we speak about 9.4 gigawatts and it is a total order value of 13,723 crores which is going into deliveries up to FY28. Now we have given the breakup on revenue wise that the order book of cells is about 6800 odd crores and modules is about close to 7000 crores. Now we would also like to clarify here that cell is DCR but when we say module it is a mix of DCR and non DCR both. So we evaluate and we consistently monitor how many cells need to be sold and how many to go into our own production.
So our module mix is DCR non DCR put together and also like to clarify that you know the nature of this business is such that every quarter you know you have an order book and you have customers whom you are selling to and there is a mix of DCR and non DCR of sales which happen every quarter. Now it is very difficult to estimate accurately what your DCR or non DCR sale would be in a given quarter because it depends on various factors like customer offtake, customer site readiness. And that is the reason that you would see a very minimal tolerance of about 4% to 5% in the overall revenue assumption versus achieved is because if I have slightly higher non DCR sale in a particular quarter then my revenue would slightly come down and so would be EBITDA numbers.
Now what market needs to understand or investors need to understand is that they should be looked upon on a yearly basis and not on a quarter on quarter basis because this is the nature of the business and it is impossible to predict what would be your product mix at a hundred percent accurate level. So I think, am I clear to your question or any other follow up?
Praveen Sahay
No, it’s fine sir. Just on the another question that’s on the cell cost. If you can give us some color on own manufacturer sell, how is the costing and versus outside your procure?
Chiranjeev Singh Saluja
No. So when we procure cells from China it’s a totally different thing. It’s not made in India so difficult to Compare a China product and a domestically manufactured cell. And we. I mean for confidentiality reasons we cannot disclose our costing for cell market.
Praveen Sahay
Okay. Okay. And the lastly sir, if you can share the capex for a entire like the 26, how much is the total CAPEX? And 27, how much is the plan for club together of everything. You know, cell model, ingot. Even the bss.
Vinay Rustagi
Yeah. So for the coming for the current. Calendar year our total capex is about 3000 crore rupees. Bulk of this is for the new line coming in. Nido Beta and Sidha Rampur. In addition to that we will also. Incur remaining Capex for Transcom and the case over acquisitions. Plus about 280 crore rupees for the best project and the aluminum project.
Praveen Sahay
Okay. Okay. Okay. Thank you sir. Thank you. I’ll come in with you.
operator
Thank you. A request to all participants. Please restrict your questions to two questions per participant. For more questions please rejoin the queue. The next question is from the line of Subramaniam Yadav from SBI Life insurance. Please go ahead.
Subramaniam Yadav
Thank you sir for taking my question. So I just wanted to understand why our module utilization is flattish. Qrq. Is there any delay from the client side or how is the order book composition? Maybe maybe near term, medium term and long term. If you can give some flavor that.
Chiranjeev Singh Saluja
Sorry Mr. Subramaniam, your voice is not very clear. Could you repeat the question again please?
Subramaniam Yadav
Yeah. Okay. So just wanted to understand the color on the order book. How is the execution period in the order book? Maybe if you can say how much in medium term and near term or maybe long term kind of a breakup. Because what we have seen is module utilization is lower this quarter. Maybe flattish if you can say Q and Q. So is there a delay from the client side for the execution or either any other issue in that?
Chiranjeev Singh Saluja
Sure. So on. Let me first address your question on the utilization. On module utilization we have consistently been between 75 to 80%. And on cell we have consistently been about close to 90%. Except for when our 1.2 gigawatt cell line got commissioned. Now these are best in class numbers in industry. When you compare on utilization we are already at peak of utilization and it’s not expand. And as I said, our next four quarters is going to be the inspection point. Now coming to the order book. If you look at the order book, all the order books which we disclose are all signed, confirmed with advances received.
These are not order book or pipeline which we disclosed. These are order books which are signed up to FY. 2028, we are not seeing any delay from offtaker in terms of supplies. It’s just that the mix sometimes gets delayed by about one or two weeks. And if that happens in the last month of the quarter, then that would reflect in that particular quarter but come back in the next quarter. So that depends on customer offtake in terms of their site readiness, their payment receivables from the garment department they sell to. So there are a lot of factors which, you know, play out.
Subramaniam Yadav
Okay, okay, understood, sir. Sir, also just a clarity on the inventory. Maybe at the end of Q2 we had some inventory due to the GST related issue. So we said some inventory was piled up. So is that completely liquidated now or how is it the situation?
Chiranjeev Singh Saluja
Yes, so the inventory which was carried forward in September 30th has been fully liquidated. And as I said earlier, that is not showing in the revenue numbers this quarter because this quarter we had slightly higher non DCR sales compared to DCR sales. And that was because of various issues with the customers in terms of their receivables and their delay in pickup, which has now become very positive. In this last quarter we have an unprecedented demand for DCR as against non dcr. So this keeps changing quarter on quarter. So what happens is that a tolerance of about 4 to 5% because of the DCR non DCR mix is something which we have to live with and it is the nature of the business.
Subramaniam Yadav
Understood, sir, Understood. Thank you sir. Thank you very much.
operator
Thank you. The next question is from the line of Nitin Arora from Access Mutual Fund. Please go ahead.
Nitin Arora
Hi sir, thanks for taking my question. First thing on your slide on the silver, what you put in your presentation, can you dwell a little bit because as you stated that lot of increase in the commodity prices, you know, the street was also expecting a big decline in gross margins for cell companies in this quarter which we didn’t see so far. You know, whosoever has reported. Do you see this gross margin pressure coming up? Because the chart what you have shown is showing a very sharp reduction. Silver number one. Number two, what is our hedging policy? Because when I look at your other income, yny, it’s down.
But similar kind of an income I’m seeing in your other comprehensive income, which is a very big number. So is it because of the hedging policy? If you can take first question on these two aspects.
Chiranjeev Singh Saluja
Yeah, so thank you, Nitin. So on the hedging policy. Yes, we have in this quarter adopted a hedging policy and you will not see any hedging income coming. It is only going to be another comprehensive income realized. It will go and sit in our cogs right now if you look at our last quarter other income it was forex hedge and interest earned on fixed deposit fund which was sitting with us in our bank account. Now most of the capex funds have. Been utilized and hence you see the other income, the silver hedging which is the unrealized gain as we speak today is sitting in the other comprehensive income. And as and when we realize it it will come and sit in the call does that.
Nitin Arora
I got it. Yeah. And how do you see gross margin? Do you see any impact would be coming in in your gross margin? Or you think because the contribution to the monoper and Topcon is pretty less and you are hedged because we’ve seen few Chinese companies who’s reported their other income is higher than their EBITDA because of hedging. I’m talking about longing and all in this quarter. So can you throw some light on your trajectory for the cross margin because.
Chiranjeev Singh Saluja
Of as you have seen in our results which we have declared yesterday, there has not been any reduction in other income as was estimated due to silver. And this is because we have a very strong hedging policy and we have almost six months of silver which is hedged. Then if you look at also being an industry leader for the last years in this industry and close to 15 years in cell manufacturing, we have shown on our investor presentation that as technology moved from multicrystalline to Topcon and the wafer size has increased from you know, 125 millimeter to 182 by 210the consumption of silver has dropped by 68% in five years.
And with the advanced technology process adoption which our team is doing in our plants, we expect a further reduction of 30%. Then we are in advanced stages with our suppliers of silver paste who are almost ready with with copper instead of silver. And we expecting that to be coming up soon, maybe in the next few quarters. If you look at our operational efficiency because of scale what we will getting into with the with a 7 gigawatt cell line any erosion on margin?
Nitin Arora
Got it sir. Just on the other aspect of demand because when we look at your order book and your cell capacity it looks like that you almost sold more than half of your cell capacity which you’re coming up going buyer. And the way you explain that in any quarter non DCR could be lower and DCR could be higher. But going forward how we should Build in now the order intake because you must be now planning to take orders for FY28 second half or let’s say nine months. Because if we look at the maths and you can correct me, you are already now sold out for the next 15 months.
Can you throw some light segment wise, how’s the inquiry pipeline? Because what we hear from the street, and you know a lot of people that there will be a big slowdown that will happen. But when we look at all the renewable companies, every quarter order intake has been pretty steady. Can you throw some light segment wise, how’s the inquiry pipeline across ipps? Kusum? There is Kusum C now also, which is becoming very big. If you can take that aspect.
Chiranjeev Singh Saluja
Sure. So let me first clarify to you that our cell capacities are not 50% sold out. They’re almost 90% sold out. We are at 3.2 gigawatt and we have done a 400 megawatt expansion which is 3.6 gigawatt as we speak today. And even if you calculate at 90% it’s about a 3 gigawatt of production, 3 to 3.2 kilowatt and then which are coming up in June and September, you would just get about in one line, one quarter of revenue. If you calculate that and you look at our 6,800 crores of our sell order book, we are almost sold out.
We do not have much capacity to sell. And that is the reason why we took up this 400 megawatt of debottle making at lowest ever capex of 101 crores, which was a major achievement by our team to get this expansion up and running. So that is on the order book. The second point of yours, that there is a demand. We can very easily sign up orders for the next five years or sell orders from existing module manufacturers. But we do not have any reason to do that because if we do not get substantial advance and the order is not a, you know, final like a committed order book, it would again not come into our order book because it would be a framework agreement.
And that is the reason why we are not going very aggressively. Although the demand we can sell our cell capacities for the next three years. Now if you look at capacities coming up in India, if you look at certain reports which had come even as, I mean as early as January 25, I remember seeing a report from Kotak which said that they estimated FY26, 54 gigawatt of cell capacity would be up and running in India. But as we speak today, we are way below 30 gigawatt. And when you look at utilization, we are way below actual production of 22 or 23 gigawatt.
Now, we have been telling consistently that cell business is high technology, difficult to run, strong expertise needed in this manufacturing process. It is not as simple as setting up a cell line and running it. It takes time. And this has been proven in the last 14 months that not as much capacity has come up as was predicted. So we feel that, you know, I leave it to Vinay to talk about the demand and the supply side. I think Vinay may like to add, so.
Vinay Rustagi
Hi, Nitin. So I think, you know, we’ve been at pains to basically explain and elaborate that the demand environment continues to very strong. We see great momentum in every single segment in the market. And we are seeing that in a discussion pipeline as well. In fact, the discussion pipeline is at the highest number of all times. And we are seeing, you know, and there’s a very good, healthy mix across IPPS, EPCs, both utility scale as well as the corporate market and the Kusum market. So there is a very healthy pipeline. And the only reason we are not able to take more orders is because one, obviously we are kind of heavily sold out over the next particularly six to 12 months and we don’t have capacities matching some of the project requirements.
So. But in general we want to kind of, again, kind of take the pains to reiterate that the demand environment remains very strong in the sector.
Nitin Arora
Sure. Just lastly from my side.
operator
Sorry to interrupt.
Nitin Arora
Sorry, I’ll come back in the queue. Sure, I will. Thank you.
operator
Thank you. The next question is from the line of Bharani from Mndes Park. Please go ahead.
Bharanidhar Vijayakumar
Good morning. Am I audible?
Vinay Rustagi
Yes, Bharani.
Bharanidhar Vijayakumar
Hi. Yeah, good morning. So can you throw some light on how much in watts did we sell this quarter in modules and cells?
Vinay Rustagi
So yeah, so we don’t release the actual sales number or the mix between cell and module. But you’ve seen the production numbers. Production has been quite strong, steady on the module side and has increased by about 86 megawatt for the cell business.
Bharanidhar Vijayakumar
Okay, how much would be the realization on sales for us right now?
Vinay Rustagi
So, you know, realization for the cell business is pretty steady. In line with the previous few quarters. The market prices are hovering at around. 14 to 14.5 cents depending on size and delivery timeline. And how about our module realization, both DCR and non dcr. So you know, for the module prices, you know, the prices are very, very volatile given that the cost environment, there are so many changes going on. So you Know we saw, I would say about you know over the last six to nine months there was a compression in the NDCR market because of strong competition. But then over the last one or two months prices have started going up as you know we need to pass on our customers. So the non DCR market prices are back to about I would say 16.5. To 17 cents, you know, which is an increase of almost 2 cents in. The last one month alone. At about 23 to 20.
Bharanidhar Vijayakumar
Okay, your voice was breaking, I will take it offline. My last question is on the composition of selling cost in your VOM for module and how much has it increased because of the silver price increase and how are we passing it on what percentage of our order book is like on a pass through mechanism?
Chiranjeev Singh Saluja
So if you look at our order book close to about and if you look at the non DCR business since it is sell from China, everything is there is no effect of silver contribution. As I mean as I you know shared with the, with Nitin who asked the last question that you know we are working on reduction of silver consumption. We have also shown that in our PPT on the investor PPT that what has been reduction of silver over the last five years and what is the plan going forward.
Bharanidhar Vijayakumar
Your voice was making? If I summarize you’re telling your non BCR is on a full pass through basis and the DCR you’re working on reduction of silver consumption.
Chiranjeev Singh Saluja
Yeah, consumption and also hedging. Hedging of silver.
Bharanidhar Vijayakumar
Right. But how much you know would be the percentage cost in VOM for say manufacturing a module right now and how much was it say maybe six months back. So if I’m giving you broad industry data, so the total silver cost over.
Vinay Rustagi
The last one year on a per watt basis has gone up from about $0.01 to about 2.5 to 2.7 cents having. So basically there’s a net increase of about 1.5 to 1.7 cents on a per watt basis. Having said that there is no impact on our current business because for our current operations and I would say up to about six months from now we already have either sufficient stock in place or we have a hedging. So there is no impact on the business over the short run and I think going beyond that we are basically.
Hoping to compensate some of the cost. Increase by changes in the BOM approach as Chiranjeev outlined earlier, more effective hedging more I would say detailed negotiations with the suppliers as well as passing on some of the cost increase to our Customers. So overall net I would say there is very little impact because of the silver cost increase on our margins.
Bharanidhar Vijayakumar
Okay, sure. I will come back in the queue. Thanks.
Vinay Rustagi
Thank you.
operator
Thank you. The next question is from the line of Kunal Shah from Dam Capital. Please go ahead.
Kunal Shah
Yeah, hi sir. One on the order book of 137 billion. Now how much of this would be converted to revenues during F27? And simple question here is factoring in all the commodity inflation or whatever is going on how would the spreads look like on the execution of this order book versus the current spreads?
Vinay Rustagi
So Kunal, hi, this is Vinay. So you know we can’t give exact numbers but I would say about 70 to 75% of our total order book is due for execution over the next 12 months. And sorry, your second question was.
Kunal Shah
Second was in terms of execution of this order book, let’s say factoring in all the commodity inflation how would the spreads look like on the execution of this book versus the current spreads?
Vinay Rustagi
Yeah. So look, I mean in terms of the increase in various commodity prices silver is the by far the biggest and the most notable increase. You know if you look at other commodities, you know the major consumption or expense comes from glass where there is no impact on aluminium frames where there is no material impact. I mean there are some monthly variations but if I look at the overall cost trend over the last six months or even 12 months there is no major impact from any of these commodity price increases. And whatever any residual impact is from any other cost increases I would say is very minimal and is easily compensated by improvement in our scale and efficiency of the overall business.
So to answer your question, I mean net, net we expect very minimal if any impact on profitability because of increases in any of these material costs.
Kunal Shah
Understood. This is helpful. Secondly, on the efficiencies that you briefly mentioned about increasing from 25.2 to 25.8. Now these levels are unheard of. Are we aiming to sort of implement and execute this over the entire Topcon line? So let’s say 7 plus 1.2 gigs. And also do you see this becoming a big competitive edge vis a vis peers and are we attempting to improve this through our own in house R and D team or there is some tie up. So if you could just sort of highlight more on that.
Chiranjeev Singh Saluja
Yeah. So the efficiency levels we are talking about are unheard of in India but in China these are know pretty normal that they’re talking about these kind of efficiencies. And Premier as a company has always maintained leadership position in all areas of cell manufacturing, be it execution, be it capex cost at which we set up our cell lines and efficiency levels which we achieve and also the ramp up time which we have been continuously improving and we will be deploying all these, you know, high end technology process adoption on our total 8.2 gigawatt of Topcon cell line.
So it’s already getting adopted in the 1.2 gigawatt and of course it will be replicated in the 7 gigawatt Topcon cell line.
Kunal Shah
Understood. And this is all through our in house R and D team, right?
Chiranjeev Singh Saluja
Yes, it’s all through our in house R and D team.
Kunal Shah
Understood. And lastly if I may, when it comes to the order book building during the F27 as a year in your estimates or guesstimates, what would be the demand size for where you know the domestic sales would be required and what are the key segments driving the growth? I think you briefly mentioned on the segments but if you could just quantify the demand size that you are looking at during F27 which will become order inflows for us. Thank you.
Vinay Rustagi
So yeah. HI. So for FY27 the demand for the DCR market is basically expected to come from the residential rooftop solar scheme where we expect installations of about 10 gigawatt Kusum scheme where on a conservative we would estimate installations of about between 5 to 7 gigawatt and the open access and the private rooftop market. Now open access. If you see what has happened in the last one year we see a record capacity addition of about 11 gigawatts in AC terms. So that equates to about 16 gigawatts of DC demand. So across all these three markets we would expect the demand to be about 30 gigawatts plus for the DCR market in FY27.
Kunal Shah
Understood. Versus which the current capacity is roughly 24 gigawatt as per your presentation, right?
Vinay Rustagi
Yes. But if you. Yeah, that is the current capacity but I think the more relevant number is the actual production number and the current run rate of production as I’m sure you’re monitoring is only about 20 to 21 gigawatt in annualized terms.
Kunal Shah
Understood. This is very helpful sir. Thank you so much.
Vinay Rustagi
Thank you.
operator
Thank you. The next question is from the line of Ashish from InvestQ PMS. Please go ahead.
Aashish Upganlawar
Yeah, my questions were mostly related to the industry demand supply which you just addressed. Sir, is it possible to further take. It maybe because most of the players would have already announced lot of capacities. So how much do you expect to commission based on your Experience. Because as you said in the initial remarks, that the actual capacities that come on the ground are pretty low versus what the market expects. So is it possible to take it forward maybe till FY28 kind of scenario versus the demand? Also because you said that 21, the demand is around 30. 30. I said I think so. How does that pan out?
Vinay Rustagi
Yeah. Hi, Ashish. So in terms of the supply, look, I think there have been total announcements by something like 45 to 50 companies. You know, if I add up all the nameplate announcements, you know, they add up to something like 200 gigawatts. But the fact of the matter is that there is a very strong discipline being exercised by both equity investors as well as lenders, as I’m sure you’ve seen. Even the government advisory not to fund to the banks and the financial institutions, to not fund any overcapacity in the sector. Chiranjeev already mentioned that last year there was an expectation that by the end of FY26 there would be operational cell capacity of 54 gigawatts, which the reality is that will be somewhere between 27 to 30 gigawatts.
So taking the reality, which is the financial discipline exercised by the investors plus the time that it takes to execute these capacities and then finally ramp up production, the actual number, we believe, will be far, far short of all these nameplate announcements. In fact, we already see on the ground that some people have been calling off their investment plans and some people are even looking to exit the sector or, you know, trying to find a bigger investor for acquisition. So, you know, it is difficult to say actually as to what the exact number will be, but we expect the number to be not very, you know, north of the expected demand.
On the demand side, we are saying that FY26 should end with a total market demand, including the DCR and the non DCR components of more than 50 gigawatt annualized. And by FY28, we would expect that demand to grow to about 60 to 65 gigawatts. So that is the overall demand supply. But I think I want to also add a little bit of context into the cell nameplate capacities. One, even if some of the capacities come up, the actual production number is expected to lag quite significantly because of the time that it takes for all the new lines to ramp up, stabilize and achieve the right efficiencies.
Second, there are, you know, there’s as much as 13 gigawatts of all the monopuck capacity which will need to be eventually taken out over the next one to two years or be upgraded to Topcom. And we believe that again there’ll be moderation in that capacity. And finally, we’ve always maintained that with the implementation of ALM2 there is all the focus of the market and the profit pool is basically shifting from the module to the cell business. And with the implementation of element 3, the same effect will basically move from cell to the upstream ingot and wafer business.
So overall, you know, our assessment is that the cell market is expected to be in much more demand supply balance than projected by, you know, many of the analysts and you know, and the focus of the business in terms of scale, investment and profitability will in any case shift towards ingots and wafers over the next three years.
Aashish Upganlawar
Right. Sir, I think you mentioned the production numbers. Numbers also. What is the supply in the market? If you could repeat that, FY26, you said some number as to what is the supply is likely to be on the cell factory.
Vinay Rustagi
Yeah. So maybe what you think like so. In the current year, you know, the current run rates of production are about 1600 odd megawatts which equates to about 20 gigawatts of production for the full year. Right. And for next year, you know, it remains to be seen which lines actually come up. Obviously our lines are due for completion between June and September. But bear in mind that all new lines do take from six months to as long as 18 months to fully stabilize and start running. So the expected production volume will really depend on the timeline of many of these new lines which are expected to be commissioned in the next year.
Aashish Upganlawar
But roughly you don’t see FY27 where the, I mean there will be still short supply on the versus the demand. That’s what would be the assumption.
Vinay Rustagi
That’s correct. You know, like I said earlier, the total demand in the year is expected to increase to about 30 gigawatts plus, you know, which compares with something like 15 to 18 gigawatts this year. Because bulk of the increase is basically going to come from one increase in the residential rooftop installation and second implementation of ALM2 for private rooftop and open access markets. So with the increase in demand, we don’t expect any, you know, likelihood of oversupply given the expected pace of capacity addition and ramp up in the coming year.
Aashish Upganlawar
Sure. Thank you so much. Thank you.
Vinay Rustagi
Thank you.
operator
Thank you. The next question is from the line of Chandan from Rajgadha Industries Private limited. Please go ahead.
Chandan Rajgadhia
Yeah, hi, my one question is last quarter we discussed about the potential of the Next quarter for say Q3 in which we discussed about three things. One is that GST change. Because of that some order got old and was supposed to be delivered in Q3. Similarly we talked about rain due green, the inventory piled up and that was supposed to be liquidated in Q3. And then order book. Obviously order book was substantially grown in the last quarter. But what we see in this quarter revenue jump of 5% which I don’t see is substantial growth considering those three parameters.
Three reasons which was mentioned in the last quarter. If we can get some around that, it will be really helpful.
Chiranjeev Singh Saluja
Yeah. So Mr. Chandan, the material or the inventory which was carried forward from last quarter to this quarter has been dispatched sold to the respective customers. Now to answer your question on revenue, I would like to make it a little bit more clearer that when we sell a non BCR module to a customer, when you look at the prevailing pricing level, it is approximately around 1.4 to 1.5 crores per megawatt at which we sell these modules. When we sell a DCR module, the package is around 2.2 to 2.3 crores per megawatt. Now in this quarter from October to December, my non DCR sales have gone up because my customer sites were ready and my DCR sales had a slight dip because most of my customers had realizations to recover or to get from the projects they had supplied DCR modules into various programs.
Now this mix, if it moves by let’s say 3 or 4%, this is what you’re seeing in the revenue numbers. But there is no impact on margins because the DCR orders which we executed in this quarter were contracts which were signed much earlier and had higher margins. So every quarter this is the nature of the business that if you have slightly higher non DCR business, your revenue will not really show up but your margins are protected. But if you are a higher DCR business then your revenues will go up. That is the reason that you are seeing that, you know, that addition.
Vinay Rustagi
I think just quickly on your point about the order book. See the, you know, like we’ve been saying, a lot of our production over the next year is already sold out. Changes in the order book do tend to be lumpy. So you know, you. It is very natural to see big orders in one quarter followed by small, you know, slight decrease in the next quarter. But our discussion pipeline remains very strong and you know, we will continue to see good order inflow in line with the growth of the business.
Chandan Rajgadhia
Got it. That’s it.
Vinay Rustagi
Thanks.
operator
Thank you. The next Question is from the line of Sabri from MK Global. Please go ahead.
Sabri Hazarika
Yeah, good morning. So I have just one question. Can you throw some color on the aluminium frame market in India in terms of what is the demand domestic production and imports currently?
Chiranjeev Singh Saluja
So the challenge on the aluminum industry in India is that we have got enough aluminium manufacturing. But the challenge is on the anodizing side. And there’s not enough anodizing facilities available in India for supplying aluminum frames. And as of now there are enough and more aluminum profile manufacturers. But because of anodizing there is a lot from China. In spite of the duty which has been imposed by government of India.
Sabri Hazarika
What should be the domestic production versus imports currently.
Chiranjeev Singh Saluja
So it’s phenomenally high. If you talk of aluminum profile manufacturing in India and demand in India, let’s say 50 gigawatts, the manufacturing is much, much more than that. The problem is in the anodizing. So in the anodizing there’s not enough capacity.
Sabri Hazarika
Yeah, anodizing will be how much then anodizing capacity in India?
Chiranjeev Singh Saluja
Yeah, that would be maybe 20% of India’s demand. Okay. And remaining everything is imported from China as we speak. But a lot of players including us have announced highly automated, you know, aluminum profile and anodizing plants. And we expect in the next 18 to 24 months India will be self sufficient on anodizing to cater to the demand of the domestic industry.
Vinay Rustagi
So 50 gigawatt of module demand will be largely satisfied from domestic sources in the next two years. That’s what you are saying, right?
Sabri Hazarika
Yes. Yes. Okay. Thank you so much and all the best.
operator
Thank you. The next question is from the line of Prakhar from Ambit. Please go ahead.
Prakhar Porwal
Oh, good morning sir.
Chiranjeev Singh Saluja
Good morning.
Prakhar Porwal
Question. So when we mentioned let’s say 30, we are already, as we know through our order book that we are already more than 90% booked in terms of cell capacity. Now when I see the demand drivers in FY27, residential, rooftop, Kusum etc, I believe these are more distribution led businesses where you sell over the counter. So are we selling or sell to some of the maybe OEMs etc or maybe some of the other companies who will then sell in the residential or Kusum market?
Chiranjeev Singh Saluja
Yes. So the cells which we sell to are to domestic module manufacturers who would buy these cells from us and make modules which would go into residential PM Suryagar or also into Kusum schemes. And the order book which we show, we do not take into account our own retail sales which is close to about half a gigawatt every year. It’s about thousand crores of revenue which are taken on order book because this is a retail market. And so we get every quarter. A lot of the orders are also spot orders or you know, orders with a short term delivery period.
Prakhar Porwal
So my question linked to this is that given our distribution network, also very strong distribution network, why can’t we directly sell our own DCR modules in this market given great demand in custom residential rooftop.
Chiranjeev Singh Saluja
So the residential rooftop program depends a lot on the retail network that you have. We work with, we give sales to certain module manufacturers who are very strong brands in the retail segment. We also do OEM for certain customers of ours. So you have companies which are in the retail segment selling not just solar panels but selling electrical appliances, cables, home solutions. So these are, you know, kind of, I mean they have a very, very large network and that is why we also support those markets through these, you know, channel sales partners.
Prakhar Porwal
Okay, and so the second question, very quick one, when we say 7 gig or capacity edition, what type of line is it? G12R or G12 just to understand what would be the effective output available for us given right now the demand mostly would be maybe M10 or gradually it will be G12R. So what is the effective capacity of the cinema?
Chiranjeev Singh Saluja
So we at Premier were the first ones and as we speak today There are only two companies in India which are manufacturing G12 ourselves and that is Adani and AG. We were, you know, early movers. If you look at China, almost 80 to 90% of China market has moved to G12R and making M10 is not economical today. And all players turn into cell manufacturing. All new lines will come up with G12R or G12 and the existing players would have to in any case upgrade to G12R which would mean, you know, a dip in production levels and again getting the line back into, you know, peak efficiency of about four to six months.
And I think most of the customers are booked on orders of DCR and at the moment they do not have the time to upgrade, but gradually they would have to. And our 7 gigawatt line is a G12R line and even the top one which is operational is G12R.
Vinay Rustagi
Sorry, please go on.
Prakhar Porwal
Yeah Shauvin.
Vinay Rustagi
No, I was just saying that, you know, currently basically the rooftop market and the Kusum market is not, does not make too much distinction between G12R or M10. But from next year onwards or this year onwards, when LMM2 is set in place, there’s a large institutional market which will start procuring DCR modules. So that is the open access and the private rooftop market. And there we expect most customers to prefer G12R over M10.
Prakhar Porwal
So effectively we’ll be maybe 90, 95% of the 7 gigawatt would be available for same.
Vinay Rustagi
That’s right, yes.
Raman Venkata Kerti
Those are my questions. Thank you so much.
operator
Thank you. The next question is from the line of Amit Mahavar from ubs. Please go ahead.
Amit Mahawar
Yeah, sir, congratulations on stable results. Just one question and you touched upon this in the previous question.
operator
So sir, you’re sounding little distant. Mr. Amit, can you please sound little louder? Is it okay now, better now?
Amit Mahawar
Yes sir. See we have a very quicker transition to new technologies in a very short span. But a lot of companies take time to ramp up cell. A large part of industry is still planning subscale capacity on cell. And then you have China and volition which is jacking up the price for the end plants. Manufacturing, do you think? So what is the level below which the industry profitability maybe in gross margins and EBITDA margins indicator, you think beyond 28, 29 it is unviable for people because we can very clearly see accelerated phasing off of manufacturing plants had to be done and we saw that in China also.
So that’s the first question, sir.
Chiranjeev Singh Saluja
Yeah. So let’s address this question in two kind of logics. One is yes, China has close to about 1500 gigawatts of capacity which is almost three times world demand and a lot of plants in China will close down. Then let’s talk about affordability. If you’re talking about affordability, you know solar is the cheapest source of energy today. And if the prices are now coming up because of the anti involution policy in China and this is passed through to customers, these were the prices which were prevailing in the market just about six to eight months back.
It’s just that the prices dropped. So there was a, there was a two or three quarters of opportunity which customers had where prices dropped and China would not continue to bleed. So even if prices come back and they are passed on to customers, and even if module prices go back to let’s say 17 cents or 18 cents per watt from 14 or 15 they were in about a month or two ago, these prices were prevailing in the market just six to eight months ago. So we don’t see a major issue there. And I think Vinay wants to add something to you.
Vinay Rustagi
Yeah, hi Amit. I think if you look at slide number 18 in our presentation, we have basically said how we compare against Many of the newer players who are entering the segment, the fundamentals of the sector are such that it basically lends itself to companies with great scale, backward integration and using the latest technology. And bear in mind, you know, we are expected to transition from topcon to some of the newer technologies over a period of about 28 to 29. And we are also likely to see the rollout of ALM3 in the same kind of time frame.
So, you know, any of the newer players with smaller capacities, high debt levels, maybe not the same level of technical competence in terms of running and operationalizing their lines, they are likely, in our view, to basically struggle with having to undertake new technology upgrades and having to backward integrate. So it is possible that many of these companies will basically struggle to sustain the business and compete with the benefit of scale and technology with some of the larger players, such as ourselves. So I do believe that we will have a strong competitive advantage against many players, many of the newer players entering the segment.
Amit Mahawar
Yeah, thanks. And one second question is the cost of complying or transitioning to G2LR? Because this was not the case we realized in last one year, but it was very, very specific in last couple of months a lot of players will have to switch. And then we have further policy coming from government. What is the case that beyond 27, 28, the industry demand supply from cell point of view, you know, is very, very favorable. You know, as we, you know, vis a vis what we see today. How would you, you know, would you assign a higher probability to that, that beyond 27, 28, the industry demands supply dynamics is very, very favorable than it is perceived today? That’s it. Thank you.
Vinay Rustagi
Yeah. Hi, Amit. I think that’s a very qualitative discussion. It’s always very difficult to see how the market will be in two or three years time. But you know, I think a lot of the industry concerns about overcapacity are overdone because of the factors we discussed earlier in terms of the financial discipline and time taken technical expertise required to execute these plans. But you know, we don’t have to just look at the cell capacities alone. I think we have to look at the fact that the technology landscape is evolving and changing and the focus of the business is going to shift towards backward integration with the rollout of ALM3.
So I think given that, and if you look at how many companies will be able to also successfully integrate backwards in this short space of time, we do believe that will be only about, I would say six to eight players who will be successful in doing so and they will be basically accounting for bulk of the market.
Amit Mahawar
Yeah. Okay, thanks.
Chiranjeev Singh Saluja
And just to add on the G12R, it’s not the cost of upgrade, it’s the time which it takes to upgrade and then stabilize the lines which is more expensive.
Amit Mahawar
Got it sir. Thank you very much and good luck.
Chiranjeev Singh Saluja
Thank you.
operator
Thank you. The next question is from the line of Puneet from hsbc. Please go ahead.
Puneet Gulati
Yeah, thank you so much for the opportunity. My first question is on your non DCR sales where you said everything is a pass through. So how do you think about margins? Is it more in percentage terms or dollar per watt peak?
Vinay Rustagi
Yeah, I think. Hi Puneet. So for the non DCR market, you know, we obviously look at what is the EBITDA for the business. You know, taking into account basically a BOM and other conversion cost. And overall, you know, despite the competition and the overcapacity in the non DCR space, we are able to, we have been able to maintain our margins at very attractive levels and also pass on the increased costs to our customers.
Puneet Gulati
Yeah, yeah, I think, yeah.
Chiranjeev Singh Saluja
So I think the realization what we get is on a dollar per watt, it is not on percentage because it is a pass through and the cell is fully funded by the off taker. Right.
Raman Venkata Kerti
So will it be fair to assume that you will might also be enjoying the rupee depreciation benefit here?
Chiranjeev Singh Saluja
Yes, sometimes. Yes. Depending on at what contract terms we have with the customer. If the customer we signed up for INR for what week order then we would not. But if the dollar be whisked.
Puneet Gulati
Okay. And you also mentioned that you are seeing profit pools move from non DCR sales to DCR sales. Has it already started happening and what would your margins have been earlier on the non DCR side versus now? No.
Chiranjeev Singh Saluja
So non DCR cell is just a bought out item for us.
Puneet Gulati
Right.
Chiranjeev Singh Saluja
I didn’t get your question. Could you repeat?
Puneet Gulati
No. You said, you said the profit pool will start moving from the non DCR modules to DCR modules. Right. On the.
Chiranjeev Singh Saluja
Implemented you would see that by FY28 India market, I think 100 would be DCR. It starts off in 26 June, but then it’s a gradual phased implementation. The CNI gets implemented immediately and the IPP projects will come in after the earlier projects which are grandfathered are executed.
Puneet Gulati
Are you already seeing some bit of compression in margins on the non DCR side or that is yet to happen?
Chiranjeev Singh Saluja
No, maybe last quarter we had seen a slight compression but it’s now kind of started increasing Prices are start increasing.
Puneet Gulati
Okay. And lastly on your cell lines you talked about June and September. When should we assume that those lines will stabilize?
Chiranjeev Singh Saluja
So if you look at the historical track record which Premier has, you know, we have been able to ramp up lines between four to six months, you know, and in the top one line, if you see we have, we are already at about 80% as we speak. And by next month you’ll be 100% of what we can achieve. You know, in terms of plant utilization, it’ll be about 90%. But as the peak at which we can, which we have been, you know, achieving every quarter now for our new line, we expect the same thing that we will be able to achieve in about four to six months.
Puneet Gulati
So full utilization for the June line should happen by December for sure. Yes. Okay, great. That’s all from my side. Thank you so much and all the best. Thank you.
operator
Thank you. The next question is from the line of Shashank Cha from SB Capital. Please go ahead.
Unidentified Participant
Sir. I have two questions. First one is effective capacity utilization. Like when you say you have we’ll have 10 gigawatt of cell capacity, so how much you will be actually able to produce out of it?
Chiranjeev Singh Saluja
So, so we have always been very transparent with the market on effective capacity. In fact if you look at our Topcon cell line which we 1.2 gigawatt, we had our ALM inspection which got completed yesterday. And as per ALM, our capacity is 1.35 gigawatt. But we always talk about effective capacity.
Unidentified Participant
So like when you say 10 gigawatt expansion, so what will be the actually usable thing? Yes, the actual would be 90% of.
Chiranjeev Singh Saluja
10, that is 9 gigawatt and you.
Unidentified Participant
Are talking about G1 2 armor sales.
Chiranjeev Singh Saluja
Talking about G12R.
Unidentified Participant
Okay, okay, got it, got it.
Chiranjeev Singh Saluja
Yeah. If I, if I actually take it as a G12 then it will be even higher. But then we want to be conservative in an announcement that it is a 10 gigawatt line based on G12R, not.
Unidentified Participant
On G12 it will be the like. When you said 10 gigawatt it will the capacity and 9 gigabyte will be the actual production. Right? Right.
Chiranjeev Singh Saluja
After it is ramped up.
Unidentified Participant
One last question sir. When you expand it like India was to sell, you may have done some demand forecasting that by FY29, FY30 this will be the like usage for sales. So from where you get idea that I have to make my sale capacity to 10 gigawatt, what was the rational behind it doing this? Capex. I just want to Understand that?
Vinay Rustagi
Yeah. So I think that depends on the overall assessment of demand supply. You know, given the bottom up analysis of the market, we follow all the government policy announcements, the, you know, the technology developments and cost of production trends, etc very closely. And obviously we also follow the track of the competitive landscape in terms of different players, their execution status, funding status, etc. Very closely. So you know, like we have said, you know, we believe that it takes much longer time for companies to actually deliver on their announcement in terms of implementation of their lines and then to finally start production from these lines.
So given, you know, our view was that the demand supply landscape is expected to remain favorable. We saw an opportunity and that is why we decided to accelerate the implementation of a 7 gigabyte cell line because we feel that we have an opportunity to be able to sell these cells at attractive prices.
Unidentified Participant
Okay, got it. Any plan on moving to electrolyzers?
Vinay Rustagi
I mean, yes, I mean I think we have to see how the fundamentals of the green hydrogen market develop. There is obviously a lot of promise. The government of India has a target of 5 million tonnes of green hydrogen capacity. But I think the truth is that the technical and economical techno, economic viability of green hydrogen business is expected to take another three to four years. That is why you see the actual implementation of the ground to be very, very slow. We are tracking this market close. It remains of interest and we announced, you know, our plans based on, you know, our expectation of the market takeoff.
Unidentified Participant
Sir, one last question. It is regarding green hydrogen. So one green hydrogen translate to 1 gigawatt, I think translate to like 1 million metric and translate to fine green ammonia. And 5 million metric can translate to something around. I just wanted to confirm 20 megawatt of AC power, right? 5 megawatt gigawatt, that’s correct, yes. I think. Eight million metric, 10 green hydrogen solar modules. Yeah.
Vinay Rustagi
So it is very difficult to give a precise number because ultimately it would depend on the kind of renewable project configuration, whether it is solar plus storage or solar plus wind plus storage, etc. But I think based on broad industry trends, we expect about 15, 20 gigawatts of solar module demand for every million tons of hydrogen capacity. So if the government target is 5 million tons, the total solar module demand could be about 100 gigawatts.
Unidentified Participant
That’s great, Delta. Yeah, thank you.
Chiranjeev Singh Saluja
Thank you.
Unidentified Participant
Okay, so that’s all. Thank you.
operator
Thank you. The next question is from the line of Dhruv from HDFC anc, please go ahead.
Dhruv Muchhal
Yes sir, thank you so much, sir. One clarification you mentioned that most lot of pricing is also on dollar basis. So is it different for sell and module or similar? And if you can share what proportion of say for example the order book is dollar based pricing in how much is INR based?
Chiranjeev Singh Saluja
About majority. About 80 to 85% of our order book is dollar based. There are very few orders which we take on rupee based. Those are mostly short term orders. Sell and module both, be it dcr, non DCR or the cells is all dollar based.
Dhruv Muchhal
Okay, interesting. And sir, secondly, earlier in the comments you mentioned that we are seeing some price increases in modules. The industry is taking some price increase probably because of the inflation. But if I’m not wrong, probably I’m not heard that not much of talk is happening on the sell price increase for the BCR market. So just curious why? I mean there is a lot of inflation. Although you are hedging, probably you will replace with copper but that also will add to some element of the cost. So why is the industry probably not trying given the demand supply is favorable, why the industry is not aiming for a price increase in the DCR sales?
Chiranjeev Singh Saluja
So Dhruv, it would depend on the contracts which we have signed. So let’s say I’ve signed a contract with a customer where there is a. Waiver probably for the new contracts. For the new contracts. Incremental contracts. Yeah. So again for the incremental contracts for DCR pricing we are seeing prices to be fairly stable. In fact, you know, as per market estimates, there was a talk that DCR prices would fall to as low as 13 cents. But we have not seen this drop. We are still seeing price realization over 14 cents.
Dhruv Muchhal
I’m just trying to understand given the cost inflation, meaningful cost inflation, silver, although you hedge, but still the incremental, assuming the spot remains, the incremental hedge will also come at a higher value. So there is an inflation. So I’m just trying to understand as industry as a player, why are you trying to push for that cost increase?
Chiranjeev Singh Saluja
As we told we are for six. Months and the supplies beyond six months when they come up and depending on the silver prices as they progress, we would maybe push for a cost increase once that really comes in.
Dhruv Muchhal
Sure. Got it. Perfect. Thank you sir. I’ll do my best. Thanks.
operator
Thank you. The next question is from the line of Rishabh Sanghvi from Oakland. Please go ahead.
Unidentified Participant
Hi, thank you for taking my question. I know you mentioned the contribution of silver in a previous answer. Just wanted to know exactly as a percentage of the total cost of the cell how much is silver and how has that been trending the last six months? So. Hi Rishabh. You know I’m not able to give.
Vinay Rustagi
You a percentage number but like I said earlier the cost of silver, the share of silver has basically gone up. From about $0.01 awards to about 2.5 cents. And we would expect that number to. Actually start going down with the proposal.
Unidentified Participant
For reducing silver consumption. Got it. And I know you mentioned that a lot of the costs that we incur are passed through especially for cost escalations. But can you help us understand how the price, how the cost of the importance has actually gone up regardless of whether it’s passed through or not?
Chiranjeev Singh Saluja
Increase. Risha. Sorry, you mean the increase in the non DCR cell prices. Increase in the imported cell prices. So it’s gone up from levels of about sub $0.04 to about $0.06 now as we speak.
Dhruv Muchhal
Okay. God. So that I’m assuming is the entire. Thing is just from the silver what you’re saying from 1 to 2.5. Okay. Thank you so much.
operator
Thank you. The next question is from the line of Nitin Arora from Access Mutual Fund. Please go ahead.
Nitin Arora
Sorry, my questions have been answered. Thank you. Thanks.
operator
Thank you. The next question is from the line of Bala Subramaniam from Arihant Capital. Please go ahead.
Balasubramanian A.
Good afternoon sir. Thank you so much for the opportunities. So I think we have seen limited tariff impact from ALM to. It’s almost 0.1 per kilowatt hour for Captivo as well as openss. However I think we have 61 gigabyte solar and 20 gigawatt hybrid projects under dustband and what, what proportion of this pipeline is subject to ALM 2 and 3 and how we are going to absorb part of ALM related cost increase pressure which impact margins. My first question sir.
Vinay Rustagi
Bala. Hi. I’m not sure I followed the full question correctly but I think the question understood was about basically the split of the pipeline in terms of LMM1 and LMM2. Is that correct?
Balasubramanian A.
Yes sir. Between 61 gigawatt solar and 20 gigawatt hybrid projects which are under development. That one also.
Vinay Rustagi
Yeah. See I think if you look at the timeline for various auctions bulk of these auctions were completed in FY24 and FY35 and there has been a massive slowdown in auctions over the last year basically since the time that ALM2 has become effective. So I would expect as much as you know, I’m taking a very broad guess but as much as 90% plus of the current pipeline would be ALM1.
Balasubramanian A.
Okay sir. Answer. How we are exposed to changes in domestic content requirement especially for mandatory for VGA projects and how this will impact our cost structure.
Vinay Rustagi
So I think the movement to DCR and LMM2 is very very beneficial because we have a fully integrated business and we have a cell lines running at optimal capacity utilization. So this is only going to provide a further impetus to our business in terms of sales as well as margins.
Balasubramanian A.
May I ask you on small questions please? Yes sir. So I think like bigger panel companies are like targeting to occur small solar cell companies how this industry is consolidating. I think Goldie Solar is acquiring on upper small cell company based out of in Andhra Pradesh how the industries are shaping up in terms of consolidation.
Vinay Rustagi
So I think you know this is something which is expected to play out over the next two years as more and more companies get into the sector. We feel that many companies will find that actual execution and operations is far more challenging and particularly with complexity around technology scale, backward integration, etc. So we will see more consolidation opportunities over a period of time.
Balasubramanian A.
Okay sir, got it. Thank you.
operator
Thank you. The next question is from the line of Deepak from Swan Investments. Please go ahead.
Deepak Purswani
Yeah. Hi. Good afternoon sir. So just wanted to check it out. In terms of the spread in the dollar terms given the hike in the raw material, how do we see this spread in dollar terms whether this would be sustained in DCR and non DCR both. If you can share your perspective especially after the six months when our hedging. For the silver is going to get over. Hi.
Vinay Rustagi
So our margin in dollar terms like you know we have been at pains to elaborate that does remain unchanged because we’ve discussed the silver price cost increase, we’ve discussed increases or changes in other commodities. So basically you know we are trying to maintain our margin and pass on the cost of increase any increases in cost to our customers for new orders wherever possible. And the intent is to maintain the profitability and the overall margins.
Deepak Purswani
Okay. So spread in the dollar term is. Going to be maintained in even in the DCR and non DCR both.
Vinay Rustagi
Yeah, it is dollar term pricing as we had said in both.
Deepak Purswani
Okay, okay.
Chiranjeev Singh Saluja
And even for the current order book beyond six months also that will be maintained. Yes. So you know this is too much of speculation. It depends what the silver price is then. And you know our negotiations with our customers as far as we are concerned, our goal is to protect the margins and pass on any increase which comes in post our own internal processes to reduce silver consumption.
Deepak Purswani
Okay. Thank you. Thanks a lot for clarification. Thank you. Thank you.
operator
Thank you, ladies and gentlemen. We will take that as our last question for today. I now hand the conference over to the management for closing comments.
Vinay Rustagi
Thank you. So thank you everyone for staying on the call and giving us your time. We touched a lot of ground in terms of the industry landscape and the company’s business. I just want to close with some quick remarks about the demand landscape because I know that there is a lot of concern in this particular area. You know, we have seen unprecedented growth in solar capacity installations over the last two years, beating all industry estimates. And that basically vindicates our belief in the attractive fundamentals of this technology. We believe that growth and demand growth will surprise us.
On the upside now, with the new capacities coming up and the increase in scale of our operations, particularly over the next three to four quarters, we are poised for a tremendous growth growth in our business. Marking an inflection point in the company’s journey. And combined with proposed forays into storage inverters and transformers, we are set to see an exciting growth journey with combined benefits of scale and diversification. I want to thank all our investors and the analyst community for your continued support and look forward to working with you. Thank you.
operator
Thank you. On behalf of ICICI Securities. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.
Vinay Rustagi
Thank you.