Solar SME Grows Profits by 1,100%: Can it Outrun the Industry Giants?
A Greater Noida based solar SME has reported a massive 1,100% profit growth over the last three years. The company is now expanding its capacity to 3.6 GW. However, despite this rapid growth, rising promoter pledging and tight cash flow are raising important questions for investors.
With India aiming for a 500 GW clean energy target, the 2026 Union Budget has provided strong support for the sector. Taking advantage of this, Alpex Solar Ltd is scaling up its operations and investing in high efficiency TOPCon technology.
Beyond the 1,100% Profit Surge
Alpex Solar has transitioned to G12R TOPCon technology. This is a high efficiency solar cell design that significantly reduces energy loss. The company made this upgrade to stay competitive as technology in the solar sector evolves rapidly.
The Indian government allocated over Rs 30,000 crore to the solar sector in the 2026 Budget. This funding signals strong policy support, giving the industry a clear path forward. While the sector looks promising, investors must still look closely at individual company data. Alpex Solar is working to move from being a simple component supplier to becoming a fully integrated manufacturer.
The Manufacturing Strategy
Alpex currently operates a 2.2 GW solar cell plant. Impressively, the company funded this project mostly through its own internal cash flow rather than relying on heavy borrowing.
Under Managing Director Ashwani Sehgal, Alpex makes its own aluminium frames and solar cells in-house. This “do it yourself” approach reduces its dependence on outside suppliers and helps control costs. As India shifts away from fossil fuels, Alpex has successfully grown its footprint within the small and medium enterprise (SME) segment.
Moving Toward Main Board Standards
Investing in SMEs can be risky due to limited trading and lighter reporting rules. To build trust, Alpex has adopted SEBI’s stricter disclosure regulations. In late 2025, the board approved changes to align its policies with these higher standards, moving the company closer to the transparency expected of larger corporations.
Financial Performance and Efficiency
In the first half of FY26, Alpex Solar reported revenue of Rs 903 crore a 240% increase compared to the same period the previous year.
The company’s financial metrics are striking:
- Return on Capital Employed (ROCE): 51%
- Return on Equity (ROE): 48%
- Ebitda Growth: 78% over the last five years (compared to an industry average of 27%)
Despite these high numbers, the stock trades at a Price to Earnings (P/E) ratio of about 14.3. This is much lower than competitors like Waaree Energies or Premier Energies, which trade above 35.
The 3.6 GW Expansion Roadmap
Alpex plans to triple its capacity from 1.2 GW to 3.6 GW by FY2027. To support this, it is setting up an aluminium frame unit capable of producing 12,000 metric tonnes.
The company’s stock has seen a wild ride. After listing at Rs 360 in February 2024, it rose to Rs 816 by February 2026 a 125% gain. However, the stock has dropped 44% from its peak of Rs 1,450 reached in August 2025. During this time, net margins fell from 12.5% to 8.4%, and promoter pledging (using shares as collateral for loans) rose from 0% to 6.5%.
A Strong Order Book
As of late 2025, Alpex has over Rs 1,900 crore in pending orders. Major contracts include:
- Rs 211 crore from the Solar Energy Corp. of India.
- Rs 245 crore from the Central Mine Planning and Design Institute.
- Rs 65 crore for solar water pumps in Maharashtra.
Managing the Risks: Pledging and Cash Flow
While the growth is impressive, there are red flags. Promoters pledged 6.5% of their holdings in late 2025. Additionally, while cash flow from operations improved to Rs 69 crore in FY25, net cash flow dropped significantly to just Rs 3 crore.
This low cash reserve limits the company’s safety net. To stay afloat and funded, Alpex has turned to raising money through non convertible debentures (unsecured debt).
Conclusion: Can Alpex Outrun the Risks?
By making its own components, Alpex Solar is protecting its profit margins and aiming for massive scale. However, investors must weigh the company’s high operational growth against the risks of low cash reserves and increased promoter pledging.
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