Indian solar module makers reported mixed Q1 FY27 results, with in-house cell production becoming the key driver of profitability. Companies like Premier Energies outperformed, while Vikram Solar and Waaree Energies faced margin pressure due to reliance on external sourcing and inventory costs.
Indian solar module manufacturers posted very different financial results for the quarter ending June 2026. While the sector is expanding rapidly, the ability to manufacture solar cells in-house, known as backward integration, has emerged as the most important factor separating profitable companies from those struggling with profitability.
Companies like Premier Energies and Emmvee Photovoltaic Power stood out with stronger growth. By having their own facilities to make solar cells, these firms reduced their reliance on expensive imports. Premier Energies, for example, reported a 53% increase in its Q1 FY27 profit, reaching ₹472 crore. This efficiency allowed them to capture better value from their module sales compared to peers who still depend on outside suppliers for essential components.
In contrast, firms that lacked sufficient in-house cell manufacturing capacity faced a difficult quarter. Vikram Solar, despite seeing its revenue grow by 38% to ₹1,563 crore, reported a sharp 85% decline in net profit to ₹20 crore. Without its own solar cell capacity, the company was forced to buy components at market rates, leaving it vulnerable when module prices fell. This resulted in a significant squeeze on its operating margins, which dropped to 8%. Waaree Energies also faced challenges, missing analyst estimates for earnings. The company struggled with high-cost inventory that was accumulated earlier and a slowdown in product exports, which impacted its ability to maintain profit margins.
The solar industry in India has been moving at a very fast pace, adding 27 GW of capacity in the first half of 2026 alone. This surge was driven largely by the industry's rush to meet the June 1, 2026 deadline for the government's ALMM-II policy, which mandates the use of approved models and manufacturers for utility-scale projects. However, this rapid growth has created a competitive environment where companies with deeper control over their supply chain have a distinct advantage.
Investors should note that setting up new manufacturing facilities is not an overnight process. Even for established players, it often takes three to four quarters for a new plant to run at full efficiency. For the coming quarters, the key monitorables will be how quickly these companies can scale up their in-house cell and wafer production to lower costs. Additionally, managing inventory levels and navigating the price competition in the domestic market will remain important factors for shareholders to track as companies try to balance expansion with profitability.