Vikram Solar shares fell sharply following disappointing June-quarter results, with profit plummeting 85%, prompting analysts to scrutinise the company’s margin pressures and ambitious expansion plans in the competitive solar sector.
Vikram Solar shares fell sharply after the company’s June-quarter results disappointed investors and analysts, with the stock dropping 10.2% to ₹156.25 on the Bombay Stock Exchange. The fall extended a bruising year for the solar module maker: the shares have now lost 49.6% over the past 12 months.
The company reported profit after tax of ₹20 crore for the quarter, down 85% from ₹133 crore a year earlier, even as revenue from operations rose 38% to ₹1,563 crore. EBITDA margin narrowed to 8% from 21%, underscoring the pressure from costs and pricing in the sector. Vikram Solar also said employee expenses climbed 56% year on year to ₹55 crore, other expenses rose 46% to ₹114 crore, depreciation increased 34% and finance costs jumped 53% to ₹49 crore.
JM Financial said it had expected a marked slowdown among pure-play module makers but that Vikram Solar’s performance fell short of even cautious expectations. The brokerage said non-DCR prices continue to ease while the gap between cell supply and demand remains wide, limiting the prospect of a quick recovery. It said the key issue to watch is the commissioning of the company’s cell production facility and how quickly it stabilises at efficient output.
For now, JM Financial has kept an “ADD” rating on the stock, although it said it will revisit its view after the company’s analyst call. Bloomberg consensus, based on seven analyst targets, points to ₹260, implying about 55% upside from the latest closing level cited in the report. Elsewhere, Financial Express reported that JM Financial recently cut its stance on the stock to “Reduce” and trimmed its target price, reflecting concern about margin compression.
Vikram Solar is pushing ahead with expansion plans, including an upgraded backward-integrated wafer and ingot manufacturing project at its Gangaikondan site in Tamil Nadu. The company says that facility, now enlarged from 6 GW to 9 GW, is scheduled for commissioning by FY29. It is also targeting a fully integrated 15.5 GW module capacity by FY27, a scale-up that investors will be watching closely to see whether it can restore profitability.
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