Vikram Solar Q1 Profit Falls 85% to Rs 20 Crore on Rising Expenses
Key Takeaways
- •Vikram Solar's consolidated net profit fell 85% year-on-year to Rs 20 crore in the June 2025 quarter despite recording healthy revenue growth from operations.
- •Higher costs, including elevated polysilicon and raw material prices along with competition from low-cost imported modules, were the primary drivers of the profit decline.
- •The Indian government has imposed a 40% basic customs duty on solar modules and a 25% duty on cells to protect domestic manufacturers from cheaper imports.
- •Vikram Solar's board approved expanding its wafer and ingot manufacturing facility, with the added capacity slated to become operational by fiscal year 2029.
- •Indian solar manufacturers are increasingly pursuing vertical integration by adding wafer and cell capacity to reduce dependence on Chinese imports, which account for a significant share of module production costs.
Vikram Solar reported an 85% year-on-year decline in consolidated net profit to Rs 20 crore for the quarter ended June 2025, as rising expenses weighed on margins despite growth at the top line.
Revenue from operations posted a healthy increase during the quarter, indicating sustained demand for the company's solar photovoltaic modules. The revenue growth aligns with India's broader renewable energy expansion, where the government has set a target of 500 GW of non-fossil-fuel installed capacity by 2030, driving large-scale procurement of domestically manufactured solar equipment.
The sharp contraction in profit was primarily driven by higher costs, though the company did not provide a detailed segmental breakdown of the expense increase in its earnings update. Cost pressures across the Indian solar manufacturing sector have been compounded by elevated polysilicon and raw material prices as well as competition from low-cost imported modules, particularly from China and Southeast Asia, despite the government's imposition of a 40% basic customs duty on solar modules and 25% on cells.
In a separate strategic decision, Vikram Solar's board approved the expansion of its wafer and ingot manufacturing facility. The expanded capacity is expected to become operational by fiscal year 2029, positioning the company further upstream in the solar value chain. Vikram Solar is one of India's largest solar module manufacturers and has been a participant in the country's renewable energy buildout, which has gained policy support through initiatives such as the Production-Linked Incentive (PLI) scheme for high-efficiency solar modules.
The June-quarter results come amid a broader push by Indian solar manufacturers to integrate vertically, with several companies adding wafer and cell capacity to reduce dependence on imported components. India remains heavily reliant on China for solar wafers and cells, which together account for a significant share of the cost structure for module makers lacking upstream integration.
Source: Economic Times Markets
