Whalesbook
Major Indian renewable firms posted strong FY26 growth, but investors should look beyond revenue. While the sector's expansion is clear, rising working capital needs and cash flow trends are becoming critical monitorables.
What Happened
India's renewable energy sector is currently experiencing a period of rapid growth, driven by a national push for higher power capacity, local solar manufacturing, and greener energy alternatives. Three notable companies—Oriana Power, Waaree Energies, and Fujiyama Power Systems—have reported strong top-line growth and healthy profit margins for the financial year 2026. While their revenue figures reflect a robust demand environment, their financial statements also highlight the complexities of scaling up operations in this capital-intensive sector. Investors are now paying closer attention to how these companies manage their cash rather than just how fast their sales are growing.
The Balancing Act at Oriana Power
Oriana Power has reported a strong performance with revenue surging by over 83% to Rs 1,814 crore in FY26. The company is actively diversifying beyond traditional solar projects, moving into Battery Energy Storage Systems (BESS) and green ammonia through a significant Rs 3,135 crore purchase agreement. While this expansion into new technology areas aims to future-proof the business, the company’s ability to collect payments from its clients remains a key area of focus. With debtor days—the time taken to collect payments from customers—averaging 135 days, the company has a significant amount of cash locked up in receivables. As the company scales its pipeline of 2,500 MW in solar and 3,000 MWh in BESS, ensuring that these projects turn into actual cash will be a primary concern for investors.
The Scale Challenge at Waaree Energies
Waaree Energies is operating at a different scale, having reported revenue of Rs 26,537 crore in FY26. With a massive order book of Rs 53,000 crore, the company has strong visibility for the next three to four years. A critical strength for Waaree is its export-focused model, with nearly 70% of its orders coming from international markets, which helps insulate the company from fluctuations in domestic solar tariffs. However, the company is undertaking a massive Rs 30,000 crore capital spending plan. This expansion is putting pressure on cash flow, which declined to Rs 1,627 crore in FY26 from Rs 3,158 crore in the previous year. This dip is largely tied to an inventory build-up caused by logistical delays, illustrating how even market leaders face friction when expanding capacity rapidly.
Fujiyama Power Systems and The Growth Gap
Fujiyama Power Systems has shown aggressive market penetration in Tier 2 and Tier 3 cities, reporting a 72.3% revenue jump to Rs 2,655 crore in FY26. The company is betting heavily on local manufacturing with its new 2,000 MW plant in Ratlam. While the company reports high return ratios, its financial structure is currently showing signs of strain. The firm recorded a slightly negative operating cash flow of Rs 3 crore for the year. This is largely attributed to high inventory days reaching 180 days, as the company stocks up on raw materials to support its ambitious manufacturing plans. For a company growing this quickly, the ability to fund this growth without relying on debt or fresh equity will be the ultimate test.
Why Cash Flow Matters For Investors
In the renewable energy sector, companies often spend money upfront on equipment and project setup long before they receive payments from customers. This creates a gap between reported profit and actual cash in the bank. When a company has high debtor days, like Oriana, or high inventory levels, like Fujiyama and Waaree, it means the company is essentially lending money to its clients or tying up capital in goods that have not yet been sold. If this trend continues, companies may need to borrow more, which increases debt pressure and interest costs. Investors monitor these metrics to ensure that growth is sustainable and that the company is not just booking sales that take a long time to convert into cash.
What Investors Should Track
Moving forward, the primary monitorables for these companies include the trend in debtor days and inventory turnover. Investors may watch whether the companies can bring these numbers down as they achieve better economies of scale. Additionally, the progress of large capital spending projects, such as Waaree’s US facility and Fujiyama’s Ratlam plant, will be critical. The market will be looking for signs that these projects are being completed on time and within budget, without causing significant further strain on cash reserves.