Insolation Energy Ltd: Stock analysis

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Insolation Energy Ltd – Stock analysis, Insolation Energy Ltd – Fundamental analysis, Insolation Energy Ltd – Is it a buy?

Insolation Energy – Business

  • Founded in 2015, Insolation Energy Ltd. stands as a preeminent Solar Panel Manufacturer in India, situated in the vibrant city of Jaipur, Rajasthan. Spanning an expansive area of over 1,90,000 square feet, our cutting-edge and automated manufacturing facility adheres rigorously to top-tier environmental and safety standards
  • FY2023, solar PV modules generating capacity was 750 MW
  • The company’s IPO debuted in September 2022 at Rs 38 per share ( CMP : ₹ 1,676)
  • It is an SME.

Insolation Energy – Key Fundamental Ratios

MARKET CAP : ₹ 3,492 Cr.
CMP : ₹ 1,676
PE : 165 (Actually, it will quite less when FY2024 will be announced)
ROCE : 19.6 %
ROE : 28.5 %
Return over 1 year: 1025 % ( Yes, more than 10 times)
Industry P/E : 43.1
Debt to equity: 1.03
Book Value: 32.6
Dividend Yield: 0.00%
Promoter holding: 70% ( Change in promoter holding: 0.03 %)

Insolation Energy – Revenue YoY

FY2022-23 Revenue: 280 Cr.

FY2023-24 Revenue: 738.80 Cr.

March 2024 Revenue only: ₹104.57 Crores

As per company guidance, the revenue of FY2025 is going to double.

In FY 2025-26, company has further expansion plans of taking solar Panel manufacturing capacity to 3000 MW and Aluminium Frame Manufacturing to 6000 metric ton per Annum. As per FY2024, half yearly report, module Capacity is expected to be 1000MW With 70% being average capacity

Some key highlights

In FY2024 half yearly report ( Sep 2023), Company mentioned that in FY2025:

  • Planning to increase Capacity to 1200 MW.
  • Aspiring to Achieve an Actual Sales Volume 500MW+
  • Revenue Goal: ₹1000 crores. But at the end of FY2024, Company already declared revenue of 738 crores and said, it may double in the next financial year.
  • Migration from BSE SME to BSE Main Board and listing on NSE
  • Setting up our own Solar Cell line with the Capacity of 600MW

Insolation energy – My View

The company is related to the Solar sector and management looks quite ambitious from the fact that they achieve their set goal much before their target date. e.g. In the half-yearly report of FY2024, they mentioned that they are targeting to achieve 1000Cr. revenue in 2025. But at the end of FY2024, they reported to double their revenue in FY2025 from the current 738 Cr. and to further increase the capacity to 3000MW in FY2026.

They are also planning to set up their Solar cell plant rather than importing solar cells, which will further improve their margin. So, in the next 2 years, the company’s revenue may become more than 4 times from the current 738Cr.

PE which seems quite high now, will come to normal range once its results are announced for H2 of FY2024. H1, EPS is 7.22 at revenue of 278Cr. H2, EPS can be ~20 at revenue of 738Cr. Total EPS of FY2024 would be ~27 and PE comes out to be 62.

Note: I have not made any position in this scrip. It is still on my watch list. I am not SEBI registered person. The above views are my personal views only and are not a buy/sell recommendation. It is only for educational purposes. Please contact your financial advisor before making your financial decisions.

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