Vikram Solar Ltd (NSE: VIKRAMSOLR) Q3 2026 Earnings Call dated Jan. 20, 2026
Corporate Participants:
Gyanesh Chaudhary — Chairman and Managing Director
Ranjan Jindal — Chief Financial Officer
Rinal Shah — Investor Relations
Analysts:
Ketan Jain — Analyst
Shivam Patel — Analyst
Sahil Sheth — Analyst
Harshit Patel — Analyst
Nidhi Shah — Analyst
Akshay — Analyst
Sarang Joglekar — Analyst
Nikhil Abhyankar — Analyst
Bharanidhar Vijayakumar — Analyst
Sagar Parekh — Analyst
Darshil Jhaveri — Analyst
Prakhar Porwal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome you all to the Q3 and NM FY ’26 Earnings Conference Call of Vikram Solar Limited. Please note that today’s conference call is being recorded. The audio and content of this earnings call constitute proprietary corporate material of Vikram Solar Limited, may not be reproduced, redistributed or quoted in any public forum or media communication without the company’s prior written approval.
Please also note that any comment made during this conference relating to the company’s future outlook that may be constituted as forward-looking statement should be reviewed in the context of the risk that the company is subject to.
I now hand the conference over to Mr. Gyanesh Chaudhary, Chairman and Managing Director. Thank you and over to you, sir.
Gyanesh Chaudhary — Chairman and Managing Director
Thank you. Good evening, everyone and thank you for joining us for Vikram Solar’s quarter three and nine month FY ’26 earnings call. As we begin this call in the new year, I would like to take a moment to extend my warm wishes to all of you and your families. May this new year bring you Sukh, Samriddhi and Arogya and may it be a year of clarity, balance and progress for all of us.
At the outset, I would like to thank you for your continued confidence and support. We remain focused on strengthening our foundation across technology, governance and execution while pursuing disciplined growth and a clear road map towards integration across the solar value chain.
I would like to bring in a global perspective here. Globally, the clean energy transition has entered a more industrial phase where delivery capability, manufacturing credibility, and long-term resilience are increasingly shaping outcomes. Against this backdrop, India’s energy transition and the role of domestic manufacturing take on a greater strategic importance for all of us.
The next phase of this transition is increasingly systemic-led, shaped by the convergence of generation, storage, and grid infrastructure rather than standalone assets. India’s storage and green hydrogen ambitions will require significant scale-up in integrated renewable and storage capacity over the coming decade. This will shape demand patterns, technology choice, and capital allocation decisions.
Now, coming back to Vikram Solar, Q3 has been an important quarter from an execution standpoint. We successfully commissioned and stabilized our 5 gigawatt advanced module manufacturing facility at Vallam in Tamil Nadu. This takes our total installed module capacity to 9.5 gigawatt. This facility is a key step in enhancing our scale, strengthening quality, delivering reliability, and improving operating leverage as volumes ramp up.
Along scale, our focus has been on strengthening the overall robustness of our manufacturing platform, ensuring consistency, reliability, and long-term value creation for customers across segments. We have continued to upgrade our product platform and have successfully transitioned to a complete portfolio of high-efficiency N-type modules. This supports our focus on bankability, performance, and long-term customer value across utility, C&I, and distribution segments.
Subsequent to our FAB-IV commissioning at Vallam, our execution focus is firmly on Gangaikondan site, which will house 6 gigawatt of modules and 12 gigawatt of cells. This site is progressing as planned.
As the industry transitions through ALMM LIST-II for cells and the road map which has been given by the government for List III wafers, we believe depth in domestic manufacturing and supply chain resilience will become increasingly important. In this environment, agility and execution reliability are becoming as critical as cost competitiveness. Our objective remains to build a more integrated platform that can serve both domestic and non-domestic demand segments over time.
While quarterly demand trends can vary, the broader environment for solar in India remains structurally very strong. Adoption continues to expand beyond utility-scale projects into C&I and residential segments, and policy support continues to improve visibility for renewable growth over the medium term.
Recent assessments by NISE indicate over 3,300 gigawatts of deployable ground-mounted solar potential, pointing to a long runway for solar deployment and domestic manufacturing across modules, cells, and integrated solutions. Furthermore, solar capacity has expanded more than 40-fold since 2014, positioning India as the world’s third-largest solar market.
Now looking ahead, industry assessments project India to become the strongest [Phonetic] largest solar market globally in 2026, with over 50 gigawatt of new capacity additions, driven by primarily utility-scale projects supported by continued policy backing for rooftop adoption.
On the policy front, recent developments remain supportive. MNRE’s move to progressively raise minimum efficiency thresholds encourages technology upgradation. In addition, the draft renewable consumption obligation framework improves demand visibility, and fresh bids under Advanced Chemistry Cell Battery Storage PLI scheme reinforce the government’s push to build domestic capacity across generation, storage, and manufacturing.
Recent changes in China’s VAT export rebate could meaningfully alter price dynamics in selected markets. We view this as a constructive development that may moderate the extent of state-supported pricing and encourage greater cost discipline across the value chain.
With our capacity now at scale and conversion costs improving, we believe our competitiveness across select export markets, which include Europe and MENA, will strengthen and will enable more meaningful conversations with customers in these regions.
We continue to view this opportunity as structural rather than cyclical, even as near-term demand patterns may fluctuate. The long-term runway for clean energy storage, and integrated manufacturing remains very much intact. Companies aligned with integration, technology depth, and long-horizon thinking which are better positioned to navigate volatility and build enduring value.
In summary, our priorities remain clear: consistent execution, disciplined capital allocation, and building long-term competitiveness through technology and integration.
With that, I will now hand over the floor to our CFO, Mr. Ranjan Jindal, for a detailed financial walkthrough and an update on the key projects. Over to you, Ranjan.
Ranjan Jindal — Chief Financial Officer
Thank you very much, Mr. Chaudhary, and compliments of the season to all the participants who have joined us today. I am accompanied by Rinal from our IR team and SGA, our IR Advisors.
We have uploaded our earnings presentation on the stock exchanges and the company’s website. I do hope everyone had an opportunity to go through the same.
We are happy to report strong and resilient Q3 numbers that have contributed to cementing a formidable nine monthly FY ’26 position. With 800 megawatt of sales volume, the YTD sales volume of over 2.3 gigawatt surpasses the full year sales volume of the previous fiscal by 23%. The company reported a healthy nine monthly FY ’26 EBITDA of INR682 crores at 20.3% EBITDA margin, recording a 154% jump from the same period last fiscal.
Before we delve into financial and operational updates, let us go over the important sector developments in the past quarter. During the quarter, India added approximately 8.5 gigawatt of solar capacity. On a cumulative basis, solar installations during the last nine months reached around 30 gigawatt, taking the total installed solar capacity to 136 gigawatt as on 31st December, 2025. Out of total 510 gigawatt of India’s total installed power generation capacity, renewable sources currently account for 50%, underscoring the country’s accelerating energy transition.
Demand continues to be driven by utility-scale solar projects awarded through central and state auctions, increasing commercial and industrial adoption to achieve cost savings and decarbonization targets, and sustained growth in rooftop and distributed solar supported by favorable policy measures like PM-KUSUM and PM Surya Ghar Muft Bijli Yojana.
Under PM-KUSUM, against overall target of approximately 35 gigawatt by March ’26, around 10 gigawatt has been installed as on 31st December, 2025. Similarly, under the PM Surya Ghar Muft Bijli Yojana, approx. 8 gigawatt of rooftop solar capacity has been installed till date.
We will now discuss a few important Ministry notifications. The Renewable Consumption Obligation framework, with a target of 29.9% in ’24-’25 to 43.33% by ’29-’30 introduced via the Energy Conservation Amendment Act, 2022 and formalized in late 2025, sees a transformative policy shift. RCO provides a centralized legally binding national mandate that will significantly accelerate solar adoption shifting the focus to the actual consumption of renewable energy by designated consumers. The RCO categorizes Distributed Renewable Energy, that ensure investments into distributed solar assets, directly boosting the retail and rooftop solar segments.
Another important MNRE notification regarding increasing the threshold of minimum module efficiency signifies a move to eliminate obsolete technology from the Indian grid. The minimum efficiency threshold is increasing from 20% to 21.5% by FY ’28 for utility-scale projects and the same for rooftop would increase to 21%. It is an intentional move by the ministry to weed out unnecessary build-out of less-efficiency legacy systems.
To put the numbers in more perspective, of the total 145 gigawatts of ALMM-compliant module supply, only 78 gigawatts is capable of manufacturing more than 22% efficiency modules which has a minimum 3 gigawatt plant size. The ratio is even more skewed in the ALMM LIST II where only 30% of the enlisted capacity is N-type capable. This implies that there is a significant scope for adding N-type capacities both in module and cell.
MNRE in November had issued a letter to the renewable energy lenders to adopt a calibrated lending approach shifting the focus to upstream manufacturing capacity. However, in early December, the ministry issued a clarification that there is no freeze on solar lending but just a gentle nudge to incentivize vertical integration to ensure long-term energy security.
The DGTR on September 2025 recommended to the Ministry of Finance a levy of anti-dumping duty on the cells imported from China in the range of 23% to 30%, citing injury to the domestic cell manufacturers which the Ministry of Finance had to act within 90 days of such recommendation. However, the 90-day period for the Ministry of Finance to pass the notification has lapsed on 29 December, 2025 and there has not been any development on the matter.
With respect to the ongoing investigation for the levy of anti-dumping duty for import of encapsulants from China, South Korea, Thailand and Vietnam, no further findings have been published by the DGTR. From a policy standpoint, the ministry has remained committed towards encouraging establishment of indigenous manufacturing ecosystems.
The upcoming enforcement of ALMM LIST II and the proposed ALMM LIST III strengthens the long-term visibility of domestic manufacturers with depth and quality. Last quarter MNRE issued a draft road map to extend the ALMM framework upstream to ingots and wafers with ALMM III proposed to be effective from 1st June, ’28, subject to a minimum industry capacity threshold of 15 gigawatt capacity by three uncontrolled players. We are currently evaluating the commercial viability and demand outlook for FY ’28 and beyond and any capital deployment towards wafer manufacturing will be undertaken in a disciplined, safe and technology-driven manner. We will share further updates as our internal assessments progress.
Looking ahead, the horizon of the solar industry has never been more promising. While we navigate short-term supply chain realignment, the long-term fundamentals remain exceptionally robust. In the short term, we are navigating a tightening input cost environment driven by shifts in the Chinese supply chain, including polysilicon production controls compounded by removal of 9% VAT exports rebate from April 2026 which effectively shall raise the raw material cost.
We view this as a constructive decision for the industry health as it may reduce pricing distortions and support greater cost efficiency. The company has started sourcing cells from Southeast Asian countries, thereby reducing China dependence. Furthermore surging silver prices are placing pressure on the N-type cell input cost. However, new processes with new innovations in cell manufacturing like LECO, rear side usage of silver-coated copper pastes and other such initiatives are being explored in order to reduce the silver consumption per watt.
It is however pertinent to mention that the model supply contracts signed by the company are designed to pass through the impact of such rising input costs to the consumers since we operate in a cost-plus business model.
Coming to the operating performance, the third quarter reflected a mixed operating environment. On a year-on-year basis. Q3 FY ’26 sales volume stood at 796 megawatts compared to 590 megawatts in Q3 ’25, supported by a stronger execution base built over the course of last one year while revenue from operations increased to INR1,106 crores up from INR1,026 crores in the same quarter last year. EBITDA for the quarter stood at INR205 crores translating into a margin of 18.5% compared to INR85 crores and 8% in the corresponding quarter last year. Profit after tax for Q3 FY ’26 stood at INR98 crores against INR19 crores in Q3 FY ’25.
Looking at the nine-month period, performance remained robust and reflects the strength of execution in the first three quarters of the year. Sales volume of nine months FY ’26 aggregated to 2.3 gigawatts compared to 1.1 gigawatt in nine-month FY ’25, representing a significant year-on-year increase. Revenue from operations for the nine-month period stood at INR3,349 crores up from INR2,230 crores in the same period last year. EBITDA for nine-month FY ’26 stood at rupees INR682 crores with about 20% margin compared to INR268 crores and 12% margin in nine-month FY ’25 while the profit after tax improved to INR360 crores from INR49 crores last quarter.
The effective capital utilization for Q3 and nine-monthly FY ’26 stood at 90% and 885, respectively. These numbers emphasize operating leverage achieved during the year and reinforces the underlying strength of our business model.
During the quarter, we achieved an important milestone, as highlighted by Mr. Chaudhary, for the achievement of commissioning of our 5 gigawatt advanced module manufacturing facility at Vallam in Tamil Nadu, taking our total installed module capacity to 9.5 gigawatts. This facility has been designed as a highly automated future-ready plant built on advanced N-type technology with the flexibility to support next generation upgrades over time. Beyond capacity addition, Vallam meaningfully strengthens our ability to deliver consistent quality, predictable time line and scalable volumes to customers across segments.
One of the key highlights of this year is the improvement we have seen in cost efficiency as the business has scaled up. This has been driven by higher throughput, greater automation on the shop floor and a tighter grip on indirect cost. Additionally, the newer capacity additions feature highly differentiated set of advanced automation systems that address some of the labor-intensive and quality-sensitive operations.
From an operational impact standpoint, this framework delivers reduced manual touch points and significant reduction in the labor cost. Higher automation also results in stronger manufacturing yields, particularly during ramp-up and high-volume operations. We see this as a structural improvement in the business and an improvement driver of margin resilience as we continue to scale further.
The company has continued to maintain a strong focus on optimizing its finance cost. Consequently, the weighted average finance cost of debt declined to 6.5% during nine-month FY ’26 from 7% in H1 FY ’26. This reduction was supported by disciplined capital management, improved case profiles and lender confidence, increased utilization of low-cost working capital facilities and timely reset of interest rates in a declining rate environment.
Turning to our order book, as on nine-month FY ’26, it stood at 10.58 gigawatts compared to 8.2 gigawatts in the same period last year, representing a year-on-year growth of 28%. The order book continues to be well diversified with IPPs accounting for a significant share of approximately 55%, followed by a steadily increasing contribution from the C&I segment at around 21%. The government and EPC segments together contribute approximately 11%. In addition, our focused efforts to expand our distribution network to a growing base of distributors and dealers across the country reflect in our order book, with the distribution segment now contributing about 13%.
The Gangaikondan project continues to progress as planned, with all statutory approvals in place and the core site infrastructure completed, including access roads, construction power, site offices, and civil works for both the module and cell facilities ongoing in full swing. Construction activities at the module plant are on way, with structural works and roofing in progress, and the facility remains on track for commissioning in Q1 FY ’27.
At the cell plant, construction activities, including foundation and sub-structure work, are underway, with critical long-lead items of utility packages under finalization. We are thus on track for a phased commissioning with the first cell out in December 2026. Overall, execution remains aligned with defined milestones, and our focus continues to be on timely delivery and smooth ramp-up of these facilities.
In line with our upcoming capex expansion, we are actively strengthening our human capital. Our headcount has increased from 1,587 employees in December ’24 to 2,413 in December ’25, reflecting the addition of skilled professionals across manufacturing, operations and project execution to ensure smooth commissioning of our new facilities.
During the quarter, we further strengthened our product portfolio with the launch of Hypersol Pro, our latest N-type module, which was unveiled at the Renewable Energy India Expo 2025. With efficiencies of up to 23.7% and power outputs of up to 640 watt-peak, the product is designed to minimize internal energy losses, prevent reverse current and enhance long-term energy output and module life.
In addition to our financial and operational performance, we continue to receive strong third-party validation of our capabilities and market position. I am pleased to share that during the quarter, India Ratings upgraded our long-term bank facilities rating from Ind A to Ind A+, with a stable outlook, and also upgraded our short-term rating to Ind A1 to Ind A1+. This upgrade reflects our improved financial profile, disciplined capital management and a strong balance sheet.
We are also pleased to highlight the continued external validation of our operating capabilities. Vikram Solar has been recognized as a Tier 1 solar module manufacturing for the eighth consecutive quarter in the BloombergNEF Bankability Rating.
To summarize, the results for the quarter reflect disciplined execution across the business, supported by scale, improved cost efficiency and a continued focus on profitability. While near-term demand conditions remain dynamic, our strong order book, expanding manufacturing platform and the supportive industry environment gives us confidence in the sustainability of our performance over the coming quarters.
With that, we would be happy to take your questions. Thank you for hearing.
Questions and Answers:
Operator
Thank you so much, sir. [Operator Instructions] The first question comes from the line of Ketan Jain from Avendus. Please go ahead.
Ketan Jain
Thank you. Thank you for the opportunity, sir. First of all, congratulations on the commissioning of the module capacity. Sir, just a clarification on the point you said that raw materials are a pass-through. So how is a typical contract with a client designed? Does it mean that all the raw material prices like the cost of cell prices or cost of aluminum racks — are everything a pass-through? And also, the forex deviation since the INR has depreciated towards USD, so are all of these pass-through? Does the client pay you the difference in the raw material cost at the time of ordering and at the time of delivery? And how does the payment mechanism work with the client?
Ranjan Jindal
So, I’ll start with the payment terms. Most of the transactions are with big utilities and these are all LC-backed transactions. It means there are a part in advance and partly in the form of LCs. On the pass-through concept, the pass-through actually is only for the cell, not the BOM always. And if we have a revisit the order book as on 31st December, about 88% of the order book does have the pass-through benefit for the cell price only. BOM at times is required to be absorbed within the overall P&L.
So, the balance 12%, so we are in view of reaching out to these customers to revisit the pricing with the increased numbers. In fact, inventory as on 31st December takes care of a bit of the impact in pricing. Over and above the cell pricing, if there is a change in law that triggers an impact on input cost, that is something we can revisit with customers and seek for a hike in the price.
Ketan Jain
So, it has to be only if the customer agrees, or is it there in the contract? Can the customer dispute it?
Ranjan Jindal
No, that’s what I told, the cell cost and change in law is part of the contract.
Ketan Jain
Understood. So, at the time of delivery, they will pay you a revised price based on the revised raw material cost?
Ranjan Jindal
Exactly.
Ketan Jain
Also, I wanted to understand one thing. On the recent removal of export rebates by China, as you said, it makes us competitive in the global market, that I understand. But how does it impact us and the sector in a domestic perspective?
Ranjan Jindal
So it’s one and the same thing. Whether the increase in cell price for us for imports from China is on account of silver prices going up or export rebates going out, so this change in cell cost is a pass-through.
Ketan Jain
Okay. So, if the change in cell cost is a pass-through, then the developers will be impacted. So, am I right to say that their IRRs for projects will get impacted because of this in the supply chain…
Ranjan Jindal
Maybe true, but we did not — see, for example in Q1 and Q2, there were softening in the prices as well. So, maybe we’ll have to talk to the developers to understand their overall economics. But I think over the project period, they averaged out their overall procurement with some quarters being an increased cost and some lower than what they anticipated.
Ketan Jain
Understood. Just a last question, sir. We saw a reduction in margin sequentially. What would be the reason for that? And what would be the current DCR and non-DCR realizations in the country — in India?
Ranjan Jindal
So, this rationalization of EBITDA is not different than what we had anticipated, in fact, in the last quarter. And even on a nine-monthly basis, the company has delivered an EBITDA of 20% plus. And going forward, we expect the non-DCR business to deliver 18% to 20% on a sustained basis.
Ketan Jain
Understood. And just the realizations, what are the current realizations in DCR and non-DCR market?
Ranjan Jindal
So, with the current increase in cell cost, we expect the non-DCR to deliver a realization of INR14 to INR14.5 per watt-peak. And on DCR front, this change will not impact the DCR module price to go up. They still continue to remain at INR23, INR24.
Ketan Jain
So, that means the developers will be absorbing the increase in raw material price?
Ranjan Jindal
Yes.
Ketan Jain
Understood. Thank you, sir. I’ll get back to the queue.
Ranjan Jindal
Thank you.
Operator
Thank you. Our next question comes from the line of Shivam Patel from PL Capital. Please go ahead.
Shivam Patel
Yes. Thank you for the opportunity. Is it possible to give us the split of your current capacity of 9.5 gigawatt into TOPCon and Mono PERC?
Ranjan Jindal
Yes. Thank you, Shivam, for the question. But I’m glad to inform that the entire 9.5 gigawatt is TOPCon. And all our additions going forward, including the 6 gigawatt, would be TOPCon.
Shivam Patel
Okay, sir. Thank you. Yes, I’ll get back in the queue.
Operator
Thank you. Our next question comes from the line of Sahil Sheth from Anand Rathi. Please go ahead.
Sahil Sheth
Hi, sir. So, my first question would be, there has been a severe drop of about 20% year-on-year in terms of realization. And even on quarter-on-quarter basis, there has been a steep drop. What are your comments on that?
Ranjan Jindal
So, maybe — you’re Sahil, right?
Sahil Sheth
Yes.
Ranjan Jindal
So, Sahil, our numbers are a bit different than what you highlighted. Yes, there was some dip of realization in Q3. If you’re talking about non-DCR modules, there was an impact of about 30% to 40%. So, that overall has kept the Q3 EBITDA a bit lower than what Q2 was. But on a nine-monthly basis, it continue to remain at 20%.
Rinal Shah
And Sahil, if you’re comparing year-on-year realizations, in Q3 specifically, we had executed a DCR utility-scale contract because of which the realizations — the blended realization was higher. That is the main difference. And this quarter, it has been 100% non-DCR execution.
Sahil Sheth
Okay, got it. And one more just to clarify, in our previous communications in the last quarter IP, our total module capacity goal was at 17.5 gigawatts. But now it has been updated to 15.5 gigawatts. Has the 2 gigawatts capacity — plan to expand that Falta capacity has been cancelled?
Ranjan Jindal
No, we have not cancelled that. So, we have retained it at 15.5 gigawatts for the time being to ensure 75% backward integration with the 12 gigawatts capacities planned. And going forward, since there is — the country is moving towards ALMM-II cells being mandatory, we will have to revisit the decision of expansion of the 2 gigawatts, which we had planned in our existing facility in Falta.
Sahil Sheth
Okay, sir. And in your opening remarks, you mentioned that you have been working to reduce the silver consumptions on the cell front. Are there any currently viable technology or a substitute which would help us do that? Or are those still under R&D phase?
Rinal Shah
Absolutely. So, Sahil, from what we hear from our partners who have been suppliers of cell for us, we hear that processes like LECO reduces — it has a laser sharp precision because of which your fingers footprint is so narrow that the overall metallization comes down. So, that is, in the short term, a very viable option. There are, on a longer-term basis, electroplating with copper with a nickel barrier also being considered. There is rear side usage of copper paste coated with silver also being considered. And, on a global scale, Jinko and Aiko, global peers like that have successfully run commercial tests as well. So, we feel that this is a huge catalyst for the industry to innovate and converge towards, using better conducting polymers than silver.
Sahil Sheth
Okay. Got it. Thank you so much.
Ranjan Jindal
Thank you.
Operator
Thank you. Our next question comes from the line of Harshit Patel from Equirus Securities. Please go ahead.
Harshit Patel
Hi. Thank you very much for the opportunity. So, firstly, on our outstanding order book, there is a reduction on the Q-o-Q basis from the second quarter to the third quarter. So, was this because of the slowness in the industry or we have removed some projects from our outstanding order book?
Rinal Shah
Harshit, the overall — there is, of course, a net addition, but our momentum of execution was higher. It has nothing to do with momentum in the overall space. We believe that the domestic order book that we carry is enough and adequate to carry us through the next five quarters — next four quarters, where we do not have a cell capacity. Parallelly, we have also started interacting with our consumers for DCR inquiries for delivery starting in the calendar year ’27. So, we believe it’s an adequate order book and this will continue. I mean, we do not see any dip in the interest or momentum from the customers.
Harshit Patel
Understood. Secondly, you mentioned about diversifying the sourcing of the cells from China to some of the Southeast Asian countries as well. So, could you highlight what is our current procurement mix in terms of China versus Southeast Asia, and how this mix will pan out over the next two to three years? That is my last question.
Rinal Shah
So, currently, it is heavily skewed towards China, because they do have a cost advantage. But looking at the critical mass of supply now available in other Southeast Asian countries, we see a cost parallel being established, especially because the state-supported subsidizing of Chinese components is moving away, which is why we are acting ahead and have already activated conversations with our partners in the other countries.
Harshit Patel
Understood. Thank you.
Rinal Shah
That is only a one-year runway for us because after that, we will have our own cell to back on.
Harshit Patel
Thank you.
Operator
Thank you. Our next question comes from the line of Nidhi Shah from ICICI Securities. Please go ahead.
Nidhi Shah
Thank you so much for taking my question. So, I saw in the PPT that you mentioned that the new 5 gigawatt line is a leased line. So I wanted to know what would be our yearly lease payment and what is the total lease on books for this line?
Ranjan Jindal
So, Nidhi, we have taken this for a INR400 crore debt financing. It is at 8.5% lease and it would be apportioned over a period of five years starting from this quarter. And on an annual basis, it will be INR108 crores which takes care of the interest on the liability also. So, from income tax point of view, we get the deductions for the entire payments for this rental.
Nidhi Shah
So what is the rationale behind leasing a line for five years rather than putting up your own line that could probably last you longer than that?
Ranjan Jindal
We could have done that, but at the time when we conceived this project, somewhere in Feb ’25 with a target to commission in October, projects would have taken a bit longer time. So, this was a quicker deal for us to trigger. That was one. And second, we intended to keep the asset light as well. So, with the right of use coming in the books of accounts, you do not directly add to the fixed assets. And third, with this structure also there was no compromise or sacrifice on the income tax front as I told you in the previous statement. So, all the three factors basically motivated us to go for the lease concept.
Nidhi Shah
All right. My other question would be on the exports. So I see that about 20% of our order book is exports. Is it fair to assume that all of these would be modules where you are selling them fitted with Indian cells only?
Rinal Shah
Nidhi, 16% of our order book is from exports. Indian cells are unviable to use for exports because of the reciprocal tariff imposed on India as a country. And hence, a UFLPA-compliant and FEOC-compliant supply chain from other Southeast Asian countries needs to be worked out and have a preapproval from the CBP for us to be able to export to the U.S.
Nidhi Shah
All right. So, if you are essentially repackaging Southeast Asian cells, how do you see the outlook for the export order book going forward, given that there are a lot of other countries that are also doing this type of export where they’re purchasing from Southeast Asian countries where tariffs are not as much as India?
Rinal Shah
Nidhi, that universe has become a little smaller. The larger CMVT countries were imposed a similar sort of duty earlier in the calendar year of ’25, which is why there is some capacity coming up in North African regions and other Asian countries, which we have been actively working with and are using them for UFLPA-compliant supply.
Nidhi Shah
Lastly, my question is on TOPCon. Since our entire line is TOPCon, previously in the Indian market, there was no price differential between Mono PERC and TOPCon modules, not to say a meaningful extent. Are we seeing the distinction come in because of the difference in efficiencies? Are we seeing that there is a preference for TOPCon? Are customers willing to pay more for a TOPCon module?
Gyanesh Chaudhary
Hi, Nidhi. The way market looks at technology, we’ve seen this over the last two decades evolve significantly. When you have a higher efficient product, which delivers higher watt-peak within the same area, offering better levelized cost of energy, the customer naturally pivots towards that higher efficiency product.
Having said that, in the DCR market currently, we don’t see enough TOPCon product available. So for the immediate term, PERC DCR probably would remain a product which will be valid, but as far as non-DCR is concerned, according to us, the market has completely pivoted or expect the large manufacturers with significant capacity and control over quality and efficiency to deliver TOPCon only.
Nidhi Shah
So, are we seeing a price differential between Mono PERC and TOPCon for non-DCR modules?
Gyanesh Chaudhary
Non-DCR, as I said, there is hardly any expectation from the market of Mono PERC.
Nidhi Shah
All right. Thank you. Those were my questions.
Operator
Thank you. Our next question comes from the line of Akshay from UBS. Please go ahead.
Akshay
Hi, sir. Thank you for the opportunity, and really appreciate the industry insights and policy initiatives you have shared at the start of the call. My question is regarding capacity expansions, particularly for cell manufacturing. So what’s the status for the one capacity which is 9 gigawatt cell plant which is coming from Thailand and the organic expansion of 3 gigawatt which you are doing?
Ranjan Jindal
Thank you. This 12-gigawatt plant project is being handled collectively and the cell line from Thailand will start getting shifted. It’s a four-month exercise from the start of dismantling up till delivery at site. We expect the clean room to be ready somewhere by September, October, thereby expecting the commissioning and first cell out by December ’26. So, considering that, the shifting exercise should logically start somewhere in April, May and the team is on track to get that done.
Akshay
Got it. Thank you. And a follow-up question to this, sir. At the start of the call, you said you’re moving all the modules to G12R module. All the capacity is now shifting to that. While Thailand plant, if I understand it right, it’s based on M10 technology. So, am I getting confused between two things or what’s the disconnect here?
Rinal Shah
No, Akshay. Both of our upcoming cell plants will be capable of manufacturing both M10R as well as G12R cells. We spoke about the module portfolio being shifting to a more efficient G12R of our existing 9.5 gigawatt of module capacity.
Akshay
Okay, right. So, the Thailand line is already G12R-capable. Got it. Thank you.
Ranjan Jindal
Thank you.
Operator
Thank you. [Operator Instructions] Our next question comes from the line of Sarang Joglekar, from Vimana Capital. Please go ahead.
Sarang Joglekar
Yeah. Thanks for the opportunity. So just wanted your view on the industry, now that we have seen that a lot of capacity, particularly in the module, has already come up. Do you already see any aggressive pricing by your competitors? And this quarter already there is some decline in your margins. So, do you see further decline in your margins going forward?
Rinal Shah
Hi, Sarang. I wouldn’t call a few basis points swing in the margin as a decline. You have to understand that, quarter-to-quarter, our realizations depend on a particular set of execution that we have committed to. This particular quarter had a significant portion, about 30%, of the order executed of government contracts that we had taken about a year back. So, this is in absolutely a normal course of business. As to the overcapacity or pricing pressure that you mentioned, we do not believe that, in the customer circle, where top 10 of our customers, about 7 out of 10 are repeat customers and are repeatedly granting their patronage to a credible name like Vikram Solar. We do not see that fight. And most of your overcrowding exists in the lesser efficient legacy systems. If you see the PowerPoint in the slide, we mentioned that the top 15 manufacturers control about 100 gigawatt of supply. And then there are 95 other manufacturers that control the remaining capacity of 45. That is where the overcrowding exists. And that would be mostly in the policy-driven Mono PERC supply.
Sarang Joglekar
Understood. Thank you.
Operator
Thank you. Our next question comes from the line of Nikhil Abhyankar from UTI Mutual Fund. Please go ahead.
Nikhil Abhyankar
Thank you, sir. Sir, just a couple of questions. I want to understand your outlook on the DCR — utility-scale DCR demand in FY ’28, if you can?
Rinal Shah
Nikhil, so far after the threshold date of 1st September, ’25, we have seen RFS’ of close to 20 gigawatt coming through, of which about one tender has given result. But looking and mapping each and every tender and its bid submission and results time line, we believe that about 30, 35 gigawatt-plus kind of a utility-scale DCR demand will come through in Fiscal ’28. We are expecting a healthy pipeline of more RFS’ to be announced in the coming quarters that will be adding to the utility-scale demand.
Nikhil Abhyankar
Sure. And on the new capex of INR44 odd billion, just want to understand the funding source for this.
Ranjan Jindal
So both these units collectively, which is a 6 gigawatt module and a 12 of cell, the overall funding would be for INR6,400 crores, which would require a debt of INR3,800 crores. Balance to come in, in the form of equity, of which part of the funds, about INR1,500 crores, has come in from the IPO. Balance will be taken care through the internal accruals.
Nikhil Abhyankar
I was mentioning about BESS plan, sir, Yes.
Ranjan Jindal
On the BESS front, the overall capex is at INR4,300 crores, which — on a debt equity of 65-35, the financial closure for which is underway, would fetch some INR2,800 crores on the debt part, balance INR1,300 crores over the next 30 months as of now is planned to be funded from the internal accruals of the company.
Nikhil Abhyankar
Sure, sir. Sure. That’s all from my side. Thank you.
Ranjan Jindal
Sure, Nikhil. Thanks.
Operator
Thank you. Our next question comes from the line of Bharani from Avendus. Please go ahead.
Bharanidhar Vijayakumar
Yes. Good evening. Am I audible?
Ranjan Jindal
Yes, yes.
Bharanidhar Vijayakumar
Yes, this is Bharani from Avendus. So I was just wondering, in times of increasing module prices, this happened post-COVID also, developers put their projects on hold or delay their, say, purchase of modules even if orders have been given. So do you feel that this is happening now — starting to happen now?
Ranjan Jindal
So developers deferring the module uptake will trigger the levy of LD if there is any delay in the project. So obviously they will do their math to determine as to whether they should go the deferment route and absorb the LD. But up till now, we have not encountered or seen any developer asking for a shift in the supply. And you could see that even in the last quarters, our production, vis-a-vis sales, have almost been at the same level, maintaining the same stock. So even for the current quarter, customer-wise mapping with regard to dispatches is all in place, and with payments in place, LC is coming on time. So we don’t foresee any deferment as such on the module uptake front.
Bharanidhar Vijayakumar
My second question is on, again, the utility-scale demand. The awarding activity so far has been much lower than what we saw last year. So how are we confident of the 35 gigawatt of DC demand from utility in ’28?
Rinal Shah
Bharani, for the next two fiscals at least, we already have an addressable market of tendered capacity of about 104 gigawatts on the non-DCR side, and a little over 15 gigawatts for the DCR side. So the installation run rate runs no risk of slowdown in the next two fiscals. For the demand beyond fiscal ’28, like I said, the DCR RFS’ have been issued to the extent of about 20 gigawatt already in the last quarter itself and we believe a much healthier pipeline will come through in the coming quarters that will take care of the installation run rate beyond.
And over and above this, we also have the two rooftop scheme-driven installations that is picking up pace, plus the C&I adoption, which is going to be a game changer, along with — combined with storage. So we do not see any slowdown in momentum of installation, so to say, for the next 5 to 10 years in fact.
Bharanidhar Vijayakumar
Okay. Can you break down that 108 gigawatts of tenders? Is it adjusting for the around 40 gigawatts without PPA or…
Rinal Shah
So, the 42 gigawatt, there has not been any official communication from the ministry of their cancellation, so to say. But even if you were to remove them from the overall 120 gigawatts, you are still left with about 70 to 75 gigawatt of TAM. And then you have the DCR demand to take over.
Bharanidhar Vijayakumar
Got it. So net of the 42 gigawatts, it is around 70 gigawatts. And that 70 gigawatts is non-DCR, and that is the AC, right, you’re talking about?
Rinal Shah
That is AC. Absolutely.
Bharanidhar Vijayakumar
Okay. Final question, how do we manage adverse movement of forex that has happened…
Ranjan Jindal
We do have a Board-approved, well-defined forex policy. And we did a match to see that if you enter into a forward for the whole procurement, the 30-70 hedging policy takes care of the overall impact of the forex changes.
Bharanidhar Vijayakumar
Understood. Meaning we have hedged.
Ranjan Jindal
Yes.
Bharanidhar Vijayakumar
Okay, got it. Thank you.
Operator
Thank you. Our next question comes from the line of Sagar Parekh from Renaissance Asset Managers. Please go ahead.
Sagar Parekh
Yes. Hi, this is Sagar from Renaissance Asset Managers. So my two questions, one on the BESS side. So you said INR4,300 crores of capex, right? So would you be like setting up the cells also, lithium-ion battery cells, or this is more like a battery pack unit that you’re looking at?
Rinal Shah
So, we will begin with the battery pack. That is the first plan of setting up 5 gigawatt hour, which will be commissioned in fiscal ’27. And parallelly, we will begin work for 7.5 gigawatt hour of integrated cell as well as battery pack facility.
Sagar Parekh
So do we have a tie-up in place for the cells — lithium-ion battery cells?
Rinal Shah
Yes, we will be announcing it soon once it reaches a point of an update. So battery pack unit getting cell supply is not at all a challenge. Technology partnership is also in advanced stages, and we’ll make an announcement soon.
Sagar Parekh
So basically — so just for my understanding, it will be 5 plus 7.5 total at full capacity of INR4,300 crores capex?
Rinal Shah
No, it will be — once the cell capacity comes through, it will be an overall 7.5 gigawatt hour of additional — so in that facility, there’ll be a 2.5 gigawatt hour of additional assembly that will be set up.
Sagar Parekh
Right. So that’s coming for — trying to do the math here. Usually all these companies who have announced, they are doing only INR600 crores, INR700 crores per gigawatt, right? So INR4,300 crores — so that’s coming up to a similar, INR570 crores, INR600 crores kind of number per gigawatt capex.
Rinal Shah
Yes.
Sagar Parekh
And secondly, on this — I wanted to understand on the silver part, so how big is the silver cost for us in the overall BOM cost?
Rinal Shah
For us, there is no direct silver cost because we import the cells as of today.
Sagar Parekh
So — but the cell — cost inflation of cell is a pass-through for us, right? 88% of our order book, the cost inflation is pass-through — the cell inflation?
Rinal Shah
That’s correct.
Ranjan Jindal
Yes.
Sagar Parekh
Then there is no price impact for us in that 88% of the order book?
Rinal Shah
That’s correct.
Sagar Parekh
Right. And lastly, on the capex side, [Indecipherable].
Ranjan Jindal
Can you repeat please? We could not hear you properly.
Sagar Parekh
On the capex side, so INR6,400 crores you said for the cell and module and INR4,300 crores for the battery. So that comes to about INR10,000 crores of capex. that is to be put in, in the next two years. If you can give us a break-up, like FY ’26, how much are we looking at ’27 and ’28, 3 years? What is the capex number that we’re looking at?
Ranjan Jindal
So in total, this capex will be spent over next 24 to 30 months. And the equity requirement for this collectively would be at INR2,400 crores to be fetched in from the internal accruals which the company shall earn gradually herein after.
Sagar Parekh
Okay. Got it. Right. So how much is the capex that we have done — nine month capex till now?
Ranjan Jindal
So up till December, we have spent approx INR300 crores.
Sagar Parekh
And Q4 will be approximately?
Ranjan Jindal
So this figure collectively should touch INR1000 crores to INR1,100 crores, something like that.
Sagar Parekh
So Q4 will be capex-heavy broadly, INR900 crores of capex?
Ranjan Jindal
Yes.
Sagar Parekh
Okay, got it. Okay, that’s it from my side. Thanks.
Ranjan Jindal
Thank you.
Operator
Thank you. [Operator Instructions] Our next question comes from the line of Darshil Jhaveri from Crown Capital. Please go ahead.
Darshil Jhaveri
Hello, good evening and thank you for taking my question. Hopefully, I’m audible?
Ranjan Jindal
Yes, yes, very clear, Darshil.
Darshil Jhaveri
Yes, yes. Hi, sir. So, a lot of my questions have already been answered, but just wanted to get a sense of the order inflow? So, in FY ’27, what order inflow are we seeing? Because I think our capacities will be fully utilized, like our current book will be fully executed in like a period of next four quarters. So, what’s the target for FY ’27, sir?
Rinal Shah
So, the target for us is always on a rolling basis, having a 1.2 times or 1.3 times our scheduled deliveries for the next four quarters. And hence in fiscal ’27, that would be the target that we’ll be working into.
Darshil Jhaveri
So, I think in FY ’26, we have around 9.5 gigawatts. So roughly 14 to 15 gigawatts, that would be our rough, right? Like if I could — that would be.
Rinal Shah
That’s the target.
Darshil Jhaveri
Okay, okay, fair enough. And so, where do we see these order flows coming majorly from, like government or IPP or — I just wanted to understand about that.
Rinal Shah
If you see the order book split, it’s a good mix that we have. IPP accounts for about 50% of our order book. Government is a very periodic, sporadic percentage. As in when the tenders come, their proportions keep on changing. What is more important is the C&I and distribution now account for a significant portion. So, we will be focusing our energies on these segments.
Darshil Jhaveri
Okay, okay. So — but in FY ’27, we see more focus from non-government, if that would be a fair assumption, ma’am?
Rinal Shah
Yes, yes, that should be — yes.
Darshil Jhaveri
Yes, and just last question from my end. So, post when our cell manufacturing comes into play, how do we see the export market? I think assuming tariffs, we have a trade deal in place or something, maybe by FY ’27. So how do we categorically see how — our export potential?
Gyanesh Chaudhary
So, I think India has achieved significant critical mass in terms of manufacturing now. And considering that there is ample access to technology, capital, as well as economies of scale, for manufacturers like us who are running for excess of 10, 15 gigawatts of capacity, we would be looking at competing with China at a global scale going forward. So, we don’t see a challenge there. Trying to bid and win large orders and accessing markets like Europe, MENA, you’re right, current tariff regime is creating a bit of a challenge. But ultimately, the market is still very strong. Solar deployment is still very, very strong and robust, because the overall cost of energy is unmatched to any other form of energy. So, there are adequate policy measures taken by several governments in place which support solar deployment in spite of all the narratives. So if India remains competitive, we should have access to all the markets globally.
Darshil Jhaveri
Okay, okay. Fair enough. Yes, that’s it from my side. Thank you so much. All the best.
Gyanesh Chaudhary
Thank you.
Operator
Thank you. Our next question comes from the line of Prakhar Porwal from Ambit Capital. Please go ahead.
Prakhar Porwal
Hello. Am I audible?
Ranjan Jindal
Yes, yes, Prakhar. Please go ahead.
Prakhar Porwal
Sir, just two clarification questions. One is, when you say you import cells from Southeast Asia to export modules to U.S., so as per FEOC restrictions, does the Chinese value addition is limited from cell and henceforth, or does it apply to wafer, polysilicon also?
Rinal Shah
No, see, it is non-Chinese from the wafer onwards. But more important than that, no sourcing of polysilicon also from the Xinjiang region. So, UFLPA is now the stricter benchmark to source any sort of value change from any cells.
Prakhar Porwal
So maybe the Southeast Asian cell producer would be maybe sourcing it from somewhere else and then producing wafer and cells, and we are importing cells from there.
Rinal Shah
That’s correct.
Prakhar Porwal
And second thing is, when you say — in the opening remarks, when sir said that you are shifting some of the purchases to Southeast Asia for cells, given you want to move away from maybe Chinese purchase. So anyway, since 88% of order book is a pass-through, at least in cells, so what is the rationale for maybe shifting that? And I would assume cells from Southeast Asia would be costlier?
Ranjan Jindal
No, nothing like that. And the whole purpose of making a shift from China to Southeast Asia is not entirely commercial. It’s always good to have diversified sources from the volume point of view also. And let us not forget Chinese cells do attract levy of basically to the extent of 27.5% and cells from all the non-Chinese South Asian countries that landed, pricing point of view continues to remain the same almost.
Prakhar Porwal
Understood. Okay, sir. Those are my questions. Thank you.
Ranjan Jindal
Thank you.
Operator
Thank you. Ladies and gentlemen, due to the time constraint, that was the last question for today. I would like to hand the conference over to the management for the closing comments. Thank you, and over to you, sir.
Ranjan Jindal
Thank you very much. Thank you all for joining us today. I hope we were able to address all the questions. We remain committed to keeping the investment community informed with regular updates on the developments of the company. For any further queries, if they were left unattended today, please feel free to reach us or SGA, our Investor Relations Advisor. Thank you all of you to remain connected and allowed us to take you through the operations of the company. Thank you very much.