Monte Carlo targets Rs 17-18 crore solar revenue in FY28

Monte Carlo Fashions Limited expects its 35-megawatt Madhya Pradesh solar project to generate Rs 17-18 crore in financial year 2028 (FY28), after planned commissioning of all three sites on March 31, 2027. Management said all power purchase agreements are signed and estimated a 17%-18% return on investment.

What is Monte Carlo building in Madhya Pradesh?

Monte Carlo is building a 35-megawatt solar plant across three sites in Madhya Pradesh. Management said power purchase agreements, or PPAs, have been signed for all three sites, land has been identified and land aggregation is complete.

Management set March 31, 2027 as the commercial operation date, or COD, for each of the three sites. It said the project was on track for that date during the November 4, 2026 earnings call, with revenue recognition expected in FY28.

The project has a different revenue mechanism from Monte Carlo's garments and home-textile operations. The solar plant is intended to sell electricity under predefined PPAs, while the core business earns revenue through branded clothing, home textiles, retail stores and other sales channels.

How much revenue and return does Monte Carlo expect from solar?

Monte Carlo expects the solar project to generate about Rs 17-18 crore of revenue in FY28, with earnings before interest, tax, depreciation and amortisation, or EBITDA, margin above 80%. Management initially said it would provide the amount later, before stating the Rs 17-18 crore range in the same call.

Management also expects a 17%-18% return on investment, or ROI, from the 35-megawatt project. These are management projections rather than reported operating results because the sites are scheduled to start commercial operations only on March 31, 2027.

Management said the PPA structure makes the revenue range subject to a variance of plus or minus 5%. The call did not disclose a tariff, annual electricity generation, PPA tenure, counterparties, construction contractor, project cost or financing arrangement.

There is no reported FY27 solar revenue or operating profit available for comparison with the FY28 target. The Rs 17-18 crore figure is therefore the clearest disclosed indication of the planned investment's first-year scale, rather than evidence of an existing earnings contribution.

Why does Monte Carlo describe solar as a one-off investment?

Monte Carlo says the Madhya Pradesh project is a one-off investment rather than a new business vertical. Management said it took the opportunity because funds were available and it wanted to improve returns on investments, responding to investor questions about a move beyond branded clothing.

Management maintained that garments and home textiles remain the core business. It stated a longer-term intention to grow the core business by 15%-20% each financial year, subject to economic conditions, and reaffirmed double-digit revenue-growth guidance for the current financial year.

The company gave no target for another solar project, no renewable-energy capacity pipeline and no plan to create a separately expanding solar segment. That absence is consistent with management's description of the 35-megawatt installation as a limited deployment of available funds.

Monte Carlo also said only about 20% of its garments are made in-house, principally T-shirts and thermals, while the rest of the cotton category is outsourced. Woollens are made in-house, and management said it has no plan to add cotton manufacturing capacity, preferring marketing and outsourcing efficiency.

How does solar fit alongside Monte Carlo's retail plans?

Monte Carlo is pursuing the solar project alongside a plan to open 40-45 exclusive brand outlets, or EBOs, in the current financial year. Management said it was in the process of opening those stores, while future outlet additions would depend on economic conditions.

Existing EBOs recorded 9% like-for-like growth in the first half, compared with 10% in the prior year. Like-for-like growth covers outlets operating in both comparison periods, while newly opened stores add to total EBO sales but not to the comparable-store measure.

Management also said it aimed to raise store productivity from around Rs 12,000 per square foot to Rs 15,000 per square foot over the next two to three years. It did not provide a solar capital-expenditure amount or state whether the project would alter the 40-45 EBO opening programme.

In discussing funding, management said debt is typically elevated on September 30 because its accumulation model requires inventory before the winter selling season. It expects March 31 debt of around Rs 200 crore as permanent working-capital requirement, but did not link a specific part of that amount to solar.

What must happen before Monte Carlo records FY28 solar revenue?

Monte Carlo must commission all three Madhya Pradesh sites by the March 31, 2027 COD before it can begin FY28 revenue recognition. Signed PPAs, identified land and completed land aggregation are disclosed milestones, but the project had not begun generation as of the November 4, 2026 call.

The relevant first comparison will be between the eventual FY28 result and management's Rs 17-18 crore revenue estimate, above-80% EBITDA-margin expectation and 17%-18% ROI target. The call did not provide project-cost or financing details that would allow an assessment of those projected returns.

The core apparel business also remains important to the group's near-term performance. Management said November and December usually account for 80%-85% of winter-season revenue and said its positive commentary on the third quarter referred to year-on-year performance, not a quarter-on-quarter comparison.

Conclusion

Monte Carlo has set out a specific plan for a non-core investment: a 35-megawatt, three-site solar plant in Madhya Pradesh with signed PPAs, a March 31, 2027 commissioning target and projected FY28 revenue of Rs 17-18 crore. Management's one-off characterisation indicates that garments and home textiles remain the intended operating focus.

The next disclosed milestone is whether all three sites achieve COD on March 31, 2027, enabling FY28 revenue recognition. Investors can then compare reported performance with management's Rs 17-18 crore revenue range, above-80% EBITDA-margin projection and 17%-18% ROI expectation, alongside progress on the 40-45 EBO opening plan.