Fujiyama Power Systems: FY26 closes with sharp growth, Ratlam capacity build-out, and tighter focus on DCR-led rooftop demand

Fujiyama Power Systems Limited (UTL Solar and Fujiyama Solar) ended FY26 with a strong finish, delivering its first full-year performance as a listed company after the November 2025 IPO. Revenue from operations for FY26 was INR 26,545 million (INR 2,654.5 crore), up 72.3% year on year. Operating profitability expanded faster than revenue, with EBITDA rising 97.3% to INR 4,903 million (INR 490.3 crore) and margin improving to 18.5% from 16.1% in FY25. PAT for FY26 was INR 3,041 million (INR 304.1 crore), with margin at 11.5%.

Q4 FY26 was the standout quarter. Revenue from operations grew 87.5% year on year to INR 9,008 million (INR 900.8 crore). EBITDA for the quarter more than doubled to INR 1,715 million (INR 171.5 crore), and PAT increased to INR 1,063 million (INR 106.3 crore). Management attributed the improvement to higher operating scale, improved utilisation across manufacturing facilities, and a rising contribution from backward integration.

The company operates primarily in the residential rooftop solar and power-backup ecosystem, selling integrated solar power generating systems that include inverters and power electronics, solar panels, and batteries. The business remains heavily B2C-led, with the presentation stating 90%+ revenue from B2C and an end-customer base of 1.4 million+ in the last five financial years. Distribution is central to the operating model, and the company reported 8,900+ channel partners as of March 2026.

Financial performance: growth plus margin expansion

The headline theme in FY26 was clear: growth and operating leverage came together. Q4 was also helped by increased participation in the on-grid solar segment, particularly under the Pradhan Mantri Surya Ghar Muft Bijli Yojana, which supported volume growth during the quarter.

Inventory, however, rose meaningfully, and working capital stretched. FY26 inventory days increased to 123 from 98 in FY25. In the Q&A, the CFO explained this was primarily raw material build to support expanded capacity and new locations. Management also disclosed that out of about INR 900 crore inventory, over INR 500 crore is raw material, with the remainder in WIP and finished goods.

On the balance sheet, equity increased sharply due to IPO proceeds and profitability. As of March 31, 2026, total equity was INR 12,734 million (INR 1,273.4 crore) versus INR 3,968 million (INR 396.8 crore) a year earlier. Gross debt increased to INR 4,615 million (INR 461.5 crore) but net debt to equity improved to 0.25x (from 0.85x), reflecting the equity infusion and debt repayment using IPO proceeds.

Ratlam and backward integration: manufacturing expansion aligned to policy demand

The strategic narrative is built around integration and policy-linked rooftop demand. The investor presentation explicitly ties growth opportunity to the PM Surya Ghar programme, which requires DCR-compliant panels and on-grid or hybrid inverters for subsidy eligibility. The company framed this as a structural demand shift toward compliant domestic supply.

On execution, management said the 2,000 MW solar panel manufacturing facility at Ratlam has been commissioned, strengthening module readiness. The company is also building out the remainder of the Ratlam integrated platform, which includes inverters and lithium-ion batteries. These lines faced delays as the company incorporated newer lithium-ion technologies and due to geopolitical impacts on machinery supply timelines. Updated timelines shared on the concall were:

1. Inverter manufacturing line expected to be commissioned by Q1 FY27 (machinery received).
2. Battery line expected to be commissioned by Q2 FY27 (machinery orders placed).

The company is also expanding solar cell capacity to address DCR requirements. The presentation states a 1 GW MonoPERC DCR solar cell facility has been commissioned, and a 1.2 GW TOPCon solar cell capacity has been announced. On the concall, management discussed the TOPCon line capex at around INR 350 crore and said the order would be placed after board approvals and quotation comparisons. Management also clarified that solar cell manufacturing is backward integration and is expected to improve margins and supply reliability rather than add standalone revenue.

In a separate operational metric, management said the existing cell line was running at about 65% utilisation, with an expectation to ramp to around 80% in one to two months.

Distribution scale and product mix: the moat management keeps emphasizing

Fujiyama’s operating model relies on a wide distributor-dealer-service network, particularly in Tier 2 and Tier 3 markets where the company sees persistent need for backup-based systems. The presentation states 950+ distributors, 6,800+ dealers, 1,150+ shoppes, and presence across 23 states. Q4 additions included 80+ distributors, 450+ dealers, and 30 shoppes.

In product terms, management did not provide audited segment reporting, but did share a broad estimate during Q&A that the revenue mix can be considered roughly 40% solar panels, 40% power electronics, and 20% batteries at the current time, noting the ratio changes by geography and demand patterns.

The company also highlighted in-house digital initiatives to support conversion and service delivery, including lead management through tele-calling and AI-driven WhatsApp nurturing, and an internal UTL AI platform covering sales orchestration, service ticketing, predictive spares allocation, and dealer engagement.

Key risks and disclosures: operational disruption, regulatory queries, and working capital

Two issues stood out in the concall as near-term watch items.

First, the company disclosed an unfortunate fire incident at its Bawal facility on May 6, 2026. Management said there were no casualties, operations have been temporarily suspended, and the affected facility had a lead-acid battery manufacturing capacity of 1.3 GW. The company stated it has comprehensive insurance coverage for the plant, inventory, and related assets, and that it activated alternate manufacturing arrangements via third-party partners to ensure business continuity.

Second, the company discussed BIS seizures relating to a small subset of its product range. Management said it has around 500 SKUs, and about 10 to 15 SKUs (mainly in inverters and batteries) were under question. They said they believe BIS was not mandatory on those SKUs, while the department believes it is, and that the legal process will determine the outcome. Management said penalties could be up to the seizure value under provisions, but they expect the matter to settle without material impact.

Working capital is the third theme to monitor. Inventory build raised net working capital days to 83 in FY26 from 71 in FY25, with management stating inventory days should normalize over time as the expansion stabilizes.

Outlook: guidance for FY27 and what the market should track

Management provided explicit guidance of 50% revenue growth for the current year. On profitability, management guided PAT margins of 11% to 13% for the coming year, while also indicating a willingness to pass part of the DCR-linked margin benefit to customers to accelerate customer acquisition.

The near-term execution milestones are clear from management commentary. Investors are likely to focus on the commissioning and ramp-up of the Ratlam inverter line (Q1 FY27) and battery line (Q2 FY27), the progress on TOPCon capex and ordering, and normalization in working capital intensity.

FY26 shows that the company is scaling quickly, and it has started aligning capacity additions to a subsidy-driven rooftop market where compliance and supply readiness matter. The next phase will test how smoothly new lines ramp up, whether inventory levels come down as planned, and how effectively the company balances growth with margin stability.