Patience Over Panic: Reading Websol Through India’s Solar Expansion.

~ Sumon Mukhopadhyay

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Introduction:

Websol Energy System Ltd (Rs. 85.18) is an Indian solar PV manufacturer focused on producing photovoltaic crystalline solar cells and modules — the essential building blocks used across utility-scale solar plants, commercial installations, and rooftop projects. The company manufactures monocrystalline solar cells and PV modules from its integrated production facility at Falta SEZ, West Bengal, serving both domestic and export markets.

As of early January 2026, the stock trades in the ₹83–₹88 range (around ₹85).

🔹 52-week range: ~₹79.8 to ~₹186.5.

🔹 Face value: ₹1.

🔹Market capitalisation: ~₹3,500–₹3,900 crore.

After a powerful multi-year rally followed by consolidation, the stock is now in a valuation reset phase where earnings delivery and sector momentum will drive the next directional move.

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Recent Market & Corporate Highlights:

🔹 Long-term wealth creation: The stock delivered exceptional multi-year returns prior to 2025, supported by a 1:10 stock split, which improved retail participation and liquidity.

🔹 Tax overhang resolved: In late December 2025, the stock rallied sharply after the company successfully resolved a major tax liability of approximately ₹73 crore, removing a material balance-sheet uncertainty.

🔹 Strategic collaboration: Websol signed an MoU with Linton, a global specialist in PV ingot and wafer technology, to explore domestic manufacturing of upstream components — strengthening supply security and reducing import dependence.

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Valuation & Operating Profile:

🔹 P/E: ~17–18x.

🔹 P/B: ~9–12x.

🔹 Dividend: Nil.

The stock has remained volatile after correcting from previous highs, yet maintains a strong long-term growth record. Valuations remain reasonable for a manufacturing-led renewable business, though not inexpensive.

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Q2 FY26 Performance (Quarter ended Sept 2025):

🔹 Revenue: ~₹168–172 crore — healthy double-digit YoY growth.

🔹 Net Profit: ~₹46 crore — stable profitability.

🔹 EPS: ~₹11 per share.

🔹 Margins: Net margin in the mid-20% range.

Sequential softness versus Q1 FY26 reflects normal business seasonality rather than operational stress. H1 FY26 performance remained strong.

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Q3FY26 Status:

As of mid-January 2026, Q3 FY26 results (December quarter) have not yet been declared. Only regulatory compliance filings have been made.

Expected announcement window: mid-February 2026.

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Risks to Monitor:

🔹 Intense competition from domestic and international solar manufacturers, especially low-cost Asian suppliers.

🔹 Earnings volatility linked to pricing cycles, raw material costs, and capacity utilisation.

🔹 Execution risks as the company expands upstream capabilities.

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Conclusion:

India added roughly 35 GW of new solar capacity in 2025, taking total renewable capacity beyond 200 GW, while government incentives under the PLI scheme are pushing domestic module capacity toward ~160 GW by 2027. This ensures steady demand visibility for domestic solar manufacturers over the next few quarters, even as pricing pressure and capacity competition remain.

Websol operates with an installed capacity of about 1.2 GW in solar cells and ~550 MW in modules, positioning it meaningfully within this expanding supply chain. With Q2 FY26 delivering revenue of ~₹170 crore and PAT of ~₹46 crore, earnings stability is already visible. Over the next 6–9 months, sector momentum is expected to remain stable to mildly positive, supported by installation growth and domestic sourcing policies.

For Websol, stock direction will depend primarily on Q3–Q4 earnings continuity, margin discipline, and execution efficiency, not speculative sentiment. If operating performance remains consistent, the stock is more likely to move through steady accumulation rather than sharp, volatile swings.

“The trend is your friend — until it bends.” — Jesse Livermore.