Vikram Solar Profit Soars 5x, Announces ₹4,371 Cr BESS Plan

Introduction

Vikram Solar Ltd. has announced a significant financial turnaround and a major strategic expansion, positioning itself for future growth in India's renewable energy sector. The company reported a fivefold year-on-year increase in its net profit for the third quarter of fiscal year 2026. Alongside this strong performance, its board has approved a substantial capital expenditure of ₹4,371 crore to enter the battery energy storage systems (BESS) market, signaling a pivotal move towards becoming an integrated energy solutions provider.

Stellar Q3 Financial Performance

The solar module manufacturer's net profit for the quarter ending December 31, 2025, surged to ₹98.15 crore, a remarkable increase from the ₹19.02 crore recorded in the same period of the previous fiscal year. This growth was primarily driven by higher sales volumes and significant improvements in operational efficiency. Revenue from operations for Q3FY26 stood at ₹1105.95 crore, marking a 7.79% rise from ₹1026.05 crore in Q3FY25. The company also managed to reduce its total expenses by 3.03% year-on-year, further bolstering its bottom line.

Margin Expansion and Operational Strength

A key highlight of the quarter was the substantial improvement in profitability margins. The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin expanded dramatically to 19%, a 142% increase from the 8% margin reported in the corresponding quarter of the previous year. This reflects strong execution and cost management. Operationally, Vikram Solar demonstrated robust performance with module sales increasing by 35% to 796 MW. The company achieved a high capacity utilization rate of 90%, indicating strong demand for its products and efficient management of its manufacturing assets.

Strategic Pivot to Energy Storage

In a landmark decision, Vikram Solar's board has greenlit a ₹4,371 crore capital expenditure plan to venture into the battery energy storage systems (BESS) sector. This investment will be channeled through its wholly-owned subsidiary, VSL Powerhive. The move is a strategic response to the growing need for reliable energy storage solutions to support India's expanding renewable energy grid. As more solar and wind power is added, grid-scale batteries become essential for ensuring stable and continuous power supply.

The BESS Roadmap Unveiled

The company has outlined a phased approach for its BESS ambitions. The initial phase involves commissioning a 5 gigawatt-hour (GWh) BESS manufacturing facility in Oragadam, Tamil Nadu, which is expected to be operational by the fiscal year 2027. This is part of a larger, long-term vision to establish an integrated cell and battery pack facility. The company is also advancing plans for backward integration into battery cell manufacturing, with a target of setting up a 7.5 GWh cell facility by FY29. The ultimate goal is to develop a total manufacturing capacity of 30 GWh for battery cells, modules, and packs.

Key Financial Metrics: Q3 FY26 vs Q3 FY25

To provide a clear overview of the company's performance, the following table summarizes the key financial figures for the third quarter.

Funding and Innovation Focus

The ambitious ₹4,371 crore capex will be financed through a combination of debt and equity, subject to necessary approvals. A crucial component of this strategic expansion is the establishment of a dedicated research and development (R&D) lab. This facility will focus on developing next-generation battery products and innovative solutions, aiming to secure a leadership position in the rapidly evolving energy storage market.

Management's Outlook

Gyanesh Chaudhary, Chairman & Managing Director of Vikram Solar Ltd., commented on the results, attributing the company's resilient performance to strong execution and continuous operational improvements. The management's forward-looking statements indicate a clear strategy focused on not only consolidating its leadership in the solar module space but also capturing significant opportunities in the emerging energy storage domain. The commissioning of the first phase of the BESS project in FY27 is a critical milestone in this journey.

Conclusion

Vikram Solar's strong Q3 performance and its bold investment in battery energy storage mark a transformative phase for the company. By delivering impressive profit growth while simultaneously laying the groundwork for a major diversification, Vikram Solar is evolving from a pure-play solar module manufacturer into a comprehensive clean energy solutions provider. This strategic expansion aligns perfectly with India's national goals for renewable energy and positions the company to capitalize on the immense growth potential of the energy storage market.