Websol Energy: The Year The Solar Cells Finally Started Talking Numbers (FY26 & Q4)

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(Prices referenced are not live; computed from lagged CMP.)

1. At a Glance

Websol has cracked something. After seventeen years in a warehouse fire sale—burning cash on old technology, losing money, begging for relevance—it walked into FY26 with ₹1,049 cr in revenue, ₹303 cr in profit, and a sheet clean enough to fund its own expansion. Revenue jumped 82%, profit nearly doubled (95.8%), and the company went from drowning in debt to printing cash.

But here’s the tension: it got there by swinging all its guns at one piece of the market—domestic content rules and government tenders—and riding a 23.35% average cell efficiency that matters only if raw material costs don’t move. The company also just quadrupled debt for a greenfield 4 GW facility that hasn’t made a rupee yet.

Growth is real. Scale is real. But every rupee of shareholder equity sits on a bet that solar, DCR (domestic content requirement), and margin stability hold hands for the next 24 months.

Latest numbers: Revenue ₹1,049 cr (FY26), PAT ₹303 cr (28.6% margin), EPS ₹6.98. P/E at lagged CMP ₹106: 15.2x. Order book ₹1,161 cr. Cell capacity ₹1.2 GW (doubled mid-year), module capacity 550 MW. Debt/Equity 0.19x. ROCE 66%, ROE 67%.

2. Introduction

Websol Energy System Limited was founded in 1990 by Sohan Lal Agarwal, when solar cells were a hobby. The company spent the first two decades bouncing between multicrystalline and monocrystalline, never quite at scale. In FY23, it lost ₹24 cr. In FY24, it lost ₹121 cr. It was held down by legacy capacity, high costs, and a market that didn’t know it existed.

In February 2024, the company commissioned its first 600 MW Mono-PERC cell line—a shift in tech, a jump in efficiency, and a whole new playbook. By September 2025, a second 600 MW line went live (commissioned in under 12 months, fully self-funded). The combined effect rippled through FY26: manufacturing utilization hit 90%+ on cells and 74% on modules. Average cell efficiency: 23.35%.

Today the company is not a survivor. It’s a scale-up with a three-decade pedigree, full ALMM (Approved List of Models and Manufacturers) status on cells, and orders landing from solar pump OEMs and module makers who need capacity. Management approved a ₹1,721 cr capex to build a 2 GW Topcon cell and module facility in Andhra Pradesh, with another 2 GW planned after that. The debt will come from banks; internal cash from FY26 operations (₹255 cr operating cash flow, 84% of PAT) will fund part of the build.

3. Business Model: WTF Do They Even Do?

Websol makes solar cells—the silicon wafers that get assembled into modules that get bolted to roofs and fields. Think of it as the engine factory for the solar module makers; the module makers are the engine wholesalers to installers.

The company started with “conventional” multicrystalline cells (low efficiency, cheap), moved to monocrystalline, and is now in Mono-PERC (Passivated Emitter and Rear Contact: fancy framing that bumps efficiency to 23%+). By mid-2027, it plans to add Topcon cells (Tunnel Oxide Passivated Contact: even fancier, targets >24.5%, higher watts per cell due to a larger format, 210×182 mm vs the current 182×182 mm).

The product mix matters obsessively. FY26 revenue of ₹1,049 cr came from ₹575 cr of cells and (inferred from gross margins and the gross margin compression) lower-margin modules—the latter dragged average OPM from 44% to 41%. Modules are “structurally lower margin” than cells, per management. But modules are where the end customer sits, so Websol can’t ignore them.

The company sells cells mostly to module makers (about 40% of the order book) and modules to solar pump OEMs and installers (60% of the order book). Almost no direct tendering; it works through the supply chain. This is why DCR (domestic content requirement) schemes matter—government mandates a minimum % of locally made cells and modules in every tender, creating a captive pool of customers who have to buy domestic, and Websol is one of 13 approved makers.

Raw material is the jugular. Silicon wafers (the base), silver paste (the contacts), glass, aluminum frames, encapsulant film—all commodities with global prices. In FY26, polysilicon wafer prices stayed soft, which lifted EBITDA margin to 41% despite module dilution. When wafer prices spike (China has done it before), margin gets hammered. The company hedges by locking in selling prices on a “cost-plus fixed markup per watt” basis, but any sharp spike in input costs can squeeze realisation. Management claims working capital is “efficient” with “45–60 days” of inventory and mostly letter-of-credit (LC) backed sales, but inventory jumped from ₹34 cr (FY25) to ₹160 cr (FY26), a 4.6x swing. Receivables also jumped from ₹5 cr to ₹93 cr—a function of higher volumes and more customers.

4. Financials Overview

Figures are consolidated, in ₹ crore.

Q4 alone (Jan–Mar 2026) delivered ₹401 cr revenue (+132% YoY), ₹146 cr EBITDA (36.4% margin, down 892 bps QoQ due to module mix), and ₹125 cr PAT (30.8% margin, +157.9% YoY). The quarter was described as “best ever…on practically every parameter.”

From the May 2026 earnings concall:

Management attributed the margin compression (41% EBITDA margin in FY26 vs 44% in FY25, and 36.4% in Q4) to the shift in product mix toward modules, which are “structurally lower margin” than cells. Silver costs also increased, eating into cell margins despite higher volumes. Despite this, operating cash flow reached ₹255 cr (84% of PAT conversion, vs ₹167 cr in FY25), signalling strong cash generation and “no working capital stress.”

Working capital metrics tell a story: inventory expanded from ₹34 cr to ₹160 cr (₹126 cr increase), receivables from ₹5 cr to ₹93 cr (₹88 cr increase). Management attributed this to the doubling of cell capacity (more raw material on hand) and module ramp (modules “more inventory intensive”). Receivables growth was tied to higher sales volumes and a broader customer base, but the concall noted that a “portion” of receivables is “backed by letter of credit from prime banks,” mitigating direct credit risk.

5. Market Expectations & Historical Multiples

This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.

The market currently pays 15.2x annualised FY26 earnings, against the company’s own 5-year average of 37.4x and a peer group median of 28.4x. The compression is large.

EV/EBITDA sits at 10.6x, down from 20.4x a year ago. Price-to-book is 7.31x versus a 5-year average around 4.6x, still stretched but not relative to the peer set (median 4.25x, but some peers like Waaree Energies trade at 6.06x).

Return on capital metrics matter here. ROCE of 66% is not a typo; it reflects how efficiently the company deployed its (modest) capital in FY26 to generate operating profit. ROE of 67% (against a 5-year average of 37%) signals that equity is working hard and fast. Both numbers sit well above the peer median (21% ROCE, 18% ROE), but both are inflated by a small equity base (only ₹631 cr in FY26, up from ₹278 cr in FY25) deployed against a suddenly profitable and scaled operating base.

What is the market pricing in? Near-term, it appears to be factoring DCR demand sustainability (government tenders, ALMM mandates), full-year run-rate utilization on the new capacity (completed in Sep 2025, so most of FY27 will see a full year of production), and margin stability if polysilicon wafer prices hold. The multiple compression from 37.4x to 15.2x reflects a shift from a turnaround/speculative thesis to a now-profitable business trading at closer to industrials multiples.

6. What’s Cooking

Completed Sep 2025: 600 MW Mono-PERC cell line (Phase 2) commissioned in