Websol Energy System: Manufacturer of high-quality solar cells and modules.

Websol Energy System: Manufacturer of high-quality solar cells and modules.

Websol Energy System makes almost all its money by manufacturing and selling solar photovoltaic (PV) cells and modules, with revenue currently concentrated in India and driven by a sharp scale‑up in mono‑PERC cell and module volumes at attractive margins.

Websol Energy System's Business model and revenue mix

Websol is a pure‑play solar PV manufacturer; its only reportable segment is “Solar Photovoltaic Cells and Modules”, which contributed essentially 100% of the roughly ₹575 crore revenue in the latest year. The company sells high‑efficiency mono‑PERC and bifacial cells and modules (M10 and G12 formats, 525–660 Wp range), manufactured at its fully automated Falta (West Bengal) facility.

Geographically, revenue is overwhelmingly domestic, with India accounting for almost all sales in the latest year, indicating limited current export exposure but substantial leverage to Indian solar capacity additions. Revenue growth has been volume‑led: reported sales increased more than 20x year‑on‑year as the company ramped capacity utilisation and product mix shifted toward higher‑wattage modules. At the same time, realisations benefited from improved efficiency and a tight domestic supply.

Key revenue drivers today are:

• Volume growth from higher utilisation of its ~0.6 GW cell and ~0.6 GW module capacities and potential brownfield expansion.​

• Product mix upgrades toward higher‑efficiency mono‑PERC and bifacial modules, which support better pricing per watt and higher value per project.

Two primary moats stand out:

• Technology and quality positioning: Websol focuses on high‑efficiency mono‑PERC cells (around 23%+ cell efficiency and >21% module efficiency), positioning its products at the premium end of domestic manufacturing. Higher efficiency enables customers to generate more power per unit area, improving project IRRs and providing some pricing power versus lower‑efficiency modules.​

• Cost discipline and profitability: Despite smaller capacity (~0.6 GW modules vs. multi‑GW peers), Websol currently delivers sector‑leading margins, with EBITDA margin above 40% and PAT margin near 27%, significantly ahead of larger peers like Vikram Solar and even stronger players such as Waaree and Premier on recent numbers. This suggests process efficiency, tight cost control, and a disciplined pricing strategy rather than chasing commoditised volume.

Sector size, growth and demand

India’s solar PV panel market was about USD 7.3–7.5 billion in 2023 and is expected to grow at roughly 9–10% CAGR in value through 2030, with installed solar capacity rising at a low‑teens CAGR in GW terms. This is underpinned by India’s 500 GW renewables target by 2030 and the accelerating adoption of solar by utilities, C&I users and households to reduce power costs and decarbonise.​

On the manufacturing side, domestic module capacity is already around 68–80 GW and projected to exceed 120–160 GW by 2030, while cell capacity is expected to grow several‑fold from roughly mid‑teens GW today to 60–120 GW by 2030. Demand for locally made modules and cells is driven by policy (ALMM, basic customs duty, PLI), rising project pipeline, and an import‑substitution push as developers seek bankable Indian suppliers.

Competitive dynamics and structure

The industry has dozens of module manufacturers, but effective capacity is concentrated among 10–15 large players such as Adani, Tata Power Solar, Waaree, Vikram, RenewSys, Premier, Goldi and others, with many smaller regional firms, including Websol, operating at sub‑GW scale. Market concentration is moderate: the top few players have multi‑GW lines and strong brands, but no single firm dominates, and new entrants keep coming in under PLI and state incentives.​

Barriers to entry are meaningful in capital, technology and bankability: setting up integrated cell‑module lines is capex‑heavy, requires process know‑how and reliable quality systems, and project lenders often prefer established, ALMM‑listed suppliers. However, barriers are lower for pure module assembly importing cells and wafers, which keeps pricing competitive and limits long‑term pricing power for all but the most differentiated, high‑efficiency or integrated producers.

Main opportunities that could accelerate growth are:

• Successful ramp‑up of 1.2 GW cells and then 5.2 GW cells/4.5 GW modules with competitive TOPCon technology, allowing Websol to leverage fixed costs and still earn mid‑20s margins even in a more competitive environment.​

• Benefiting from ALMM‑II mandating domestic cells, which could push more module players and EPCs to source from established cell manufacturers like Websol.​

• Potential export optionality if tariffs and supply‑chain realignment keep India attractive as a non‑China source, especially for US and EU buyers.​

Key structural threats are:

• Overcapacity‑driven consolidation that favours only the largest, most integrated and lowest‑cost producers, where Websol risks being squeezed between commodity assemblers and giant integrated players unless it executes its expansion flawlessly.​

• Policy roll‑back or weaker‑than‑expected enforcement of domestic‑content requirements, which would immediately expose domestic producers to cheaper imports and hurt realisations.

Q2 FY26 / H1 FY26 call

• Key messages and strategy: For Q2 FY26, revenue grew ~21% YoY to about ₹1,680 crore (or ~₹387 crore H1 in another source context), with EBITDA margin holding at ~43–44% and net profit up sharply YoY. Management highlighted the commissioning of the additional 600 MW mono‑PERC bifacial cell line and outlined the broader plan to scale to 5.2 GW cells and 4.5 GW modules by 2028, funded mainly through internal accruals and some debt.​

• Highlights/surprises: Continued high margins despite sector talk of overcapacity, and the announcement of a 1:10 stock split, which management positioned as improving liquidity.​

• Revealing analyst questions: Analysts pressed on capex phasing, expected leverage metrics, and the risk of sector‑wide overcapacity; management acknowledged competitive intensity but maintained that ALMM‑II for cells and TOPCon technology would protect utilisation and pricing.​​

Websol’s last four calls emphasise a rapid turnaround to high growth and exceptional margins, driven by the ramp‑up of mono‑PERC capacity and plans for large TOPCon expansion, funded mainly from internal accruals and some debt. Management reiterates its confidence in demand, supported by ALMM‑II and the domestic manufacturing policy, while highlighting strong ROCE and balance‑sheet improvement. Analysts repeatedly question the sustainability of 40%+ EBITDA margins, customer visibility, and leverage for the multi‑GW capex. Still, management offers limited quantitative downside scenarios, leaving pricing power, contract mix, and the response to overcapacity as key open issues.