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Insolation Energy Plans Cell Production By Q3/Q4, Sees It As Major Profitability Driver Photograph: (AI)
Insolation Energy expects to commence production from its upcoming 4.5 GW solar cell manufacturing facility by Q3/Q4 FY27, with the company identifying the project as its biggest long-term profitability driver as India transitions towards deeper domestic solar manufacturing under stricter localisation norms.
Speaking during the company’s Q4 FY26 investors call, management said the Narmadapuram-based solar cell plant in Madhya Pradesh is progressing as planned and will significantly improve margins, strengthen backward integration and enhance competitiveness under the evolving ALMM framework.
“Our EBITDA margin should increase whenever the cell line becomes operational,” the company said during the call, adding that margins could expand from the current 14-15% range to 17-18% initially and eventually cross 20% once the entire facility stabilises at optimal utilisation.
The company expects phased commissioning to begin in Q3/Q4 FY27, with full ramp-up likely by Q1 FY28. Insolation said the entire 4.5 GW capacity may not become operational immediately, but production will progressively scale over the subsequent quarters.
The solar cell facility forms the centrepiece of Insolation Energy’s broader strategy to transform itself from a module manufacturer into a fully integrated solar manufacturing company. Alongside the cell project, the company is also expanding aluminium frame manufacturing capacity and preparing future plans for wafer and ingot manufacturing.
Management indicated that backward integration has become increasingly critical amid the government’s implementation of Approved List of Models and Manufacturers (ALMM) and domestic content requirement (DCR) policies, which are expected to sharply increase demand for locally manufactured solar cells.
The company sounded particularly bullish on the domestic solar cell opportunity, noting that India still faces a sizeable gap between solar module manufacturing capacity and domestic cell availability.
“Lots of India market is now available for solar cell supply also,” management said during the interaction, highlighting that several projects awarded before tighter localisation norms still permit non-DCR modules, creating additional transitional demand over the next 12-18 months.
To support the expansion, Insolation Energy has earmarked nearly Rs 1,500 crore capex for the solar cell facility, while total FY27 capex guidance stands at around Rs 2,500 crore including investments in IPP and PM-KUSUM-linked renewable energy projects.
The company acknowledged that debt levels would rise sharply during the expansion phase, with peak debt expected to approach Rs 1,500 crore during FY27. However, management argued that the integrated manufacturing model would eventually generate strong operating cash flows once the cell facility reaches stable utilisation.
Insolation Energy currently operates 5.5 GW of solar module manufacturing capacity and is targeting module sales of 2-2.5 GW during FY27. Management maintained that revenue growth momentum similar to FY26’s 60%-plus expansion could continue in FY27 depending on market conditions and the impact of ALMM implementation from June 2026 onward.
The company also revealed that it has already secured additional land in Madhya Pradesh for future wafer and ingot manufacturing projects and aims to establish upstream manufacturing before ALMM Part-III comes into force in June 2028.
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