During Wednesday’s trading session, the shares of a leading player in solar panel module manufacturing surged nearly 10.2 percent to Rs. 3,654.5 on BSE, after receiving the single largest contract value of Rs. 500.5 crores from the Rajasthan government for the first time ever.
With a market cap of Rs. 7,364.3 crores, the shares of Insolation Energy Limited closed in the green at Rs. 3,535.1, up by nearly 6.5 percent, as against its previous closing price of Rs. 3,318.2.
What’s the news:
Insolation Energy Limited secured its single largest contract in the company’s history worth Rs. 500.5 crores, from Rajasthan Renewable Energy Corporation Ltd (RREC), to be executed in 18 months.
This contract involves the design, supply, installation, testing, and commissioning of Rooftop Solar (RTS) photovoltaic power Projects on state government buildings in Rajasthan.
The project will be executed under the Hybrid Annuity Mode (HAM) across the Ajmer, Jaipur, and Kota districts, with a total capacity of 77 MW.
According to the latest regulatory filings with the BSE, the project also includes a comprehensive 25-year operation and maintenance (O&M) agreement.
The contract, valued at Rs. 500.5 crores, along with a Rs. 208.32 crores order from Zetwerk Manufacturing Business Private Limited, signifies a substantial advancement in Insolation Energy’s performance, reflecting the company’s capability to consistently achieve results through back-to-back orders.
The total value of these orders, amounting to Rs. 708.82 crores, exceeds Insolation Energy’s entire sales for the first half of FY25.
Previous News & Orders:
During a board meeting on October 15, the company approved the issuance of up to 12,23,500 equity shares with a face value of Rs. 10 each at an issue price of Rs. 3,287 per share, including a premium of Rs. 3,277.
This will be conducted in one or more tranches, aiming for a total consideration of up to ~Rs. 402.2 crores on a preferential basis to non-promoter entities.
Additionally, on 24th October, Insolation Green Energy Private Limited, a wholly-owned subsidiary of Insolation Energy Limited, secured a purchase order valued at Rs. 208.31 crores from Zetwerk Manufacturing Business Private Limited.
The order involved the supply of 550 WP (Watt-peak) solar photovoltaic (PV) modules for the NTPC Khavada site in Gujarat, to be completed within the financial year 2024-25.
Financials:
The company reported a significant growth in revenue from operations, experiencing a year-on-year increase of nearly 164.2 percent, rising from Rs. 279 crores in FY23 to Rs. 737 crores in FY24.
Likewise, during the same period, the company’s net profit increased from Rs. 11 crores to Rs. 55 crores, representing a growth of around 400 percent YoY.
Future Outlook:
Insolation Energy Ltd recorded a volume growth of over 150 percent year-on-year. As module and solar cell prices have decreased, the company has managed to maintain and improve its gross spreads, leading to an expansion in profit margins.
The company anticipates sustaining and enhancing its current margins. It plans to add an additional 3GW of solar module capacity, bringing the total to 4GW, along with 12,000 MT of aluminium frame manufacturing capacity before the end of FY25.
Further, the company aims to establish 1.5GW of cell manufacturing capacity by the end of the next financial year, having already secured the necessary technology partnerships.
In the next phase of expansion, the company envisions reaching 6.5GW of operational solar modules and 3GW of solar cell manufacturing capacity within the next three years. Insolation Energy expects to achieve over $1 billion in revenue with profit-after-tax margins exceeding 10 percent in the same timeframe.
Key Financial Ratios:
In terms of key financial metrics, Insolation Energy currently has a Return on Equity (RoE) of 68.5 percent and a return on capital employed (RoCE) of 47.8 percent. Additionally, the company’s debt-to-equity ratio stands at 0.89.
Stock Performance:
The stock has delivered multibagger returns of nearly 526.8 percent in one year, as well as around 125 percent returns in the last six months. So far in 2024, the shares of Insolation Energy have given multibagger returns of about 347.7 percent.
About the company:
Insolation Energy Limited is mainly engaged in the business of manufacturing of a wide range of Solar Panels which includes Solar Module, Solar PCUs, and Solar Battery, under the brand name INA.
Written by Shivani Singh
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