Indosolar Ltd Management Discussions

1. Industry and Company Overview and Context

Indosolar Limited (the Company or Indosolar) is a subsidiary of Waaree Energies Limited (Waaree), one of Indias largest solar photovoltaic (PV) module manufacturers. The Company operates as a solar module manufacturing entity, leveraging the integrated expertise. and established market presence of the Waaree Group.

The Companys manufacturing facility is located at Greater Noida, Uttar Pradesh, with an installed module manufacturing capacity of 1.3 GW per annum. Indosolars product portfolio encompasses a range of high-efficiency solar modules, including TOPCon modules and Mono PERC technology. As a subsidiary of Waaree, Indosolar benefits from the Groups robust supply chain, procurement synergies, established customer relationships, and brand equity.

Global renewables hit 5,149 GW by end-2025 (up 15.5%, a record 692 GW added), now 49.4% of global power capacity. Solar and wind drove 96.8% of net renewable additions, and renewables still made up 85.6% of total capacity growth despite a non-renewable rebound. Generation-wise, renewables plus nuclear grew faster than total global demand growth, while coal-fired generation declined more than gas rose. The IEA nonetheless trimmed its 2025-2030 renewable growth forecast by 5% on policy and geopolitical uncertainty. China, the US, and EU together drove 79.5% of global additions, with China leading and shifting from fixed tariffs to competitive auctions. Africas renewable growth (led by solar) is outpacing the global average but from a very low base, and the world is still short of the pace needed to triple capacity by 2030 per the COP28 target.

India crossed 532.74 GW total installed capacity by March 2026, with renewables past the halfway mark at 51.6%, making India the worlds third-largest renewable capacity holder, behind only China and the US. India hit 50% non-fossil installed capacity in June 2025, five years ahead of its 2030 target, and reached 283.46 GW non-fossil capacity by March 2026 (274.68 GW renewable: 150.26 GW solar, 56.09 GW wind, 11.75 GW bio, 5.17 GW small hydro, 51.41 GW large hydro; plus 8.78 GW nuclear). Total generation for FY2025-26 (through March) was 1,845.92 BU, with non-fossil sources at 29.2% (538.97 BU). A further pipeline of 486.94 GW is in progress (184.24 GW under implementation, 48.74 GW tendered as of November 2025), including hybrid, round-the-clock, and thermal-plus-renewable projects to strengthen grid stability.

Sources: PIB, IRENA, MERCOM INDIA, DOWN TO EARTH, JAPAN TIMES, PLANETE ENERGIES, SAUR ENERGY

2. Opportunities and Threats

For module manufacturers, key trends include the growing demand for solar PV modules, particularly in the residential and rooftop segments, driven by government initiatives and environmental concerns. However, uncertainties exist around fluctuating raw material costs (especially metals), logistics challenges, and potential shifts in government policies. Additionally, competition from other technologies and regions, as well as the pace of technological advancements, add to the complexities.

(a) Opportunities

Indias solar capacity is expected to nearly quadruple by 2035, providing sustained growth potential across the value chain.

Rooftop solar adoption is accelerating among both residential and commercial users, expanding the distributed segment alongside utility-scale growth.

The ALMM policy is directing procurement toward domestically manufactured components, benefiting manufacturers and integrators strengthening local supply chains.

Demand is tilting toward higher-efficiency formats, with bifacial panels and perovskite technology moving from niche applications to mainstream adoption faster than anticipated.

Hybrid solar projects paired with storage are becoming more prevalent, helping address the intermittency issue that has historically constrained large-scale adoption.

(b) Threats

Cell prices, a key input for module manufacturing, remain vulnerable to fluctuations driven by demand surges and other market dynamics, which can affect profitability.

Shifts in government regulations, incentives, and renewable energy targets can materially affect demand for solar PV modules.

The fast pace of advancement in solar cell efficiency and module design means manufacturers must continually innovate to stay competitive.

Global economic conditions and geopolitical developments can shape both demand for solar energy and the broader market environment.

Growing competition from other manufacturers, along with the emergence of alternative energy technologies, can pressure pricing and market share.

Source: https://mnre.gov.in/en/solar-overview/

3. Segment or Product-wise Performance

Indosolars manufacturing facility at Greater Noida has an installed capacity of 1.3 GW per annum of solar PV modules. The facility operates across multiple automated production lines equipped with state-of-the-art stringing, layup, lamination, framing, and testing equipment The Company is also securing orders from developers of power projects. We rigorously ensure impeccable quality, safety and compliance, underscoring our unwavering commitment to excellence.

4. Outlook

a. Managements Plans and Strategies

Following are the managements Plans and Strategies: i. Strategic Sourcing and Supply Chain Management:

Raw Material Procurement: Source key inputs such as silicon wafers and glass at competitive prices, while cultivating strong supplier relationships and pursuing both domestic and international sourcing avenues.

Inventory Management: Deploy robust inventory control systems to reduce wastage, make efficient use of storage capacity, and ensure materials are available in time for production needs.

Diversified Supplier Base: Build a broad network of dependable vendors to lower dependence on any single supplier and cushion the business against supply chain disruptions.

b. Optimized Manufacturing Processes

Lean Manufacturing Principles: Apply lean manufacturing practices to simplify production workflows, reduce waste, and enhance overall operational efficiency.

Standard Operating Procedures (SOPs): Establish and maintain clear SOPs across all manufacturing processes to ensure consistency, repeatability, and compliance with quality benchmarks.

c. Stringent Quality Control

Quality Assurance: Put in place a strong quality assurance framework covering every stage of manufacturing, from inspection of raw materials through to final product testing.

Certifications and Standards: Maintain compliance with applicable international and national quality standards (e.g., IEC, BIS) to strengthen customer confidence and support access to markets.

Cost Optimization: Pursue strategies to lower production costs, make efficient use of resources, and keep overhead expenses under control.

Working Capital Management: Follow sound working capital management practices to maintain adequate cash flow for day-to-day operations, ensure timely supplier payments, and meet debt obligations.

d. Human Resources and Workforce Development

Talent Acquisition: Attract and onboard skilled professionals across engineering, production, quality control, and management functions.

Training and Development: Invest in training initiatives that equip employees with up-to-date technical skills and knowledge relevant to solar panel manufacturing and quality control.

Employee Retention: Adopt measures to retain skilled talent, including competitive compensation, opportunities for career growth, and a positive workplace environment.

5. Risks and Concerns

At Indosolar, we place the utmost importance on proactive risk management through regular assessments, strategic contingency planning, and robust mitigation measures. By vigilantly monitoring market trends, regulatory changes, technological advancements, and operational vulnerabilities, we are committed to safeguarding the interests of stakeholders. Our commitment to risk management enables us to navigate challenges adeptly and maintain a resilient business environment. We have identified and implemented effective strategies to mitigate various risks, ensuring the stability and sustainability of our operations. Here are some of the risks we mitigate and our corresponding strategies:

Risk Category	Description	Mitigation
Raw Material Risk	Escalating raw material costs could weigh on solar photovoltaic products and affect future prospects.	Despite volatility in prices of key inputs such as polysilicon, aluminium, and copper in recent quarters, our operating margins have improved on the back of stronger order flow. We manage this risk through pass-through clauses embedded in most orders and order-backed procurement practices, which ensure that raw material price increases are largely passed on to customers, shielding the Company from adverse impact.
Competition Risk	Intensifying competition presents a material risk to profitability.	We have obtained product certifications and built strong relationships that support our competitive standing. Backed by a wide channel network and strong service capabilities, we hold a favourable market position. As one of Indias largest and most innovative solar photovoltaic manufacturers, we operate with among the lowest production costs in the domestic PV industry, reinforcing and further strengthening our market position.
Liquidity Risk	Liquidity risk for a solar PV company can stem from sudden shifts in demand or pricing, or from reliance on short-term financing.	We hold adequate cash and cash equivalents. Cash accruals expected over the next two fiscal years should comfortably meet our debt obligations, supported further by customer advances against orders, which bolster liquidity. Capital expenditure will be met through a mix of existing cash reserves, internal accruals, and sanctioned debt facilities.
Working Capital Risk	An extended working capital cycle could increase the need for borrowing to meet operational requirements.	We have introduced measures such as tighter inventory management and improved receivables collection to shorten the working capital cycle, and are also evaluating alternative financing options like factoring or supply chain financing to reduce reliance on borrowings. In addition, we have put in place strong cash flow management policies and adopted technology-driven automation to further ease this risk.
Policy Risk	Changes in government policies and regulations affecting the renewable energy sector including subsidies, tax incentives, or import/export restrictions could affect demand for solar products and Indosolars ability to grow its market presence..	We stay proactive by closely tracking and adjusting to policy developments. As part of the Waaree Group, which is simultaneously broadening its product range and entering new markets, this shared readiness allows us as a group to anticipate challenges, adapt to a changing business environment, and reinforce our position as an industry leader with a diversified, resilient portfolio.
Skilled Labour Risk	Access to skilled employees and reliable contractors is essential to maintaining operational efficiency and executing supply orders smoothly.	We focus on developing a capable workforce through structured training programmes that keep our teams equipped for high performance. The Company also places emphasis on sustaining strong ties with established contractors and suppliers to ensure dependable service delivery.

6. Internal Control Systems and Their Adequacy

The Company has adequate internal control systems which ensure protection against misuse or loss of the Companys assets. The Company deploys a robust system of internal control that facilitates the accurate and timely compilation of financial statements and management reports; ensures regulatory and statutory compliance and safeguards investors interests by ensuring the highest level of governance and periodical communication with investors. The Audit Committee also reviews the effectiveness of the Companys internal control system which provides adequate safeguards & effective monitoring of its transactions.

7. Discussion on Financial Performance with Respect to Operational Performance

During the period under review, total revenue of the Company for the year was Rs. 68,136.54lakhs as against Rs. 32,474.56 lakhs in the previous year. During the period under review, the Company earned profit before tax of Rs. 23,428.46 lakhs against the profit before tax of Rs. 5,477.74 lakhs in the previous year. The profit after tax for the year is Rs. 24,659.91 lakhs against the profit after tax of Rs. 5,478.19 lakhs in the previous year.

For an Indian solar manufacturer, liquidity and capital resources are crucial for sustaining operations and growth. Key aspects include readily available cash, access to working capital, and the ability to manage debt obligations. Strong liquidity ensures the company can meet short-term liabilities, while robust capital resources support long-term investments in expansion and technology upgrades. We aim to maintain sufficient cash and cash equivalents and may explore arrangements for loans for its working capital requirements.

8. Human Resource Development

Human Resource Development is paramount in every organization. The management continues to lay emphasis on identifying, developing the talent in the organization with a view to retain them and further train those who are capable of handling additional responsibilities. Developing people and harnessing their ideas is a high priority for the Company.

As of March 31, 2026, Indosolar employed 91 full-time personnel. In addition, we strategically partner with third party workforce and service providers to engage contract labourers, numbering 597 individuals as of the same date. The deployment of contract labour fluctuates based on the specific scope and nature of outsourced projects.

9. Details of Significant Changes (i.e. Change of 25% or More as Compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor

Ratio	2025-26	F.Y. 2024-25	Reason if change is more than 25%
Debtor Turnover Ratio	6.35	139.15	Decrease in the ratio mainly company started fully operational during the year.
Inventory Turnover Ratio	7.53	5.29	Increase in the ratio due to Inventory efficiently utilised and company started fully operational during the year.
Current Ratio	6.70	0.81	Increase in the ratio is mainly company started fully operational during the year.
Debt Equity Ratio	0.01	1.24	Decrease in the ratio is mainly full repayment of borrowings and increase in net worth driven by higher profitability
Operating Profit Margin			Increase in the ratio is mainly company started fully
	34.24%	16.65%
(%)			operational during the year.
Net Profit Margin (%)	36.00%	17.00%	Increase in the ratio mainly company started fully operational during the year.
Return on Net Worth	0.82	0.76	NA

Ratio	2025-26	F.Y. 2024-25	Reason if change is more than 25%
Interest Coverage ratio	185.56	4.97	Increase in ratio due to repayment of loans.
Debt Service Coverage Ratio	4.28	0.64	Increase in the ratio is mainly full repayment of borrowings and increase in net worth driven by higher profitability.
Return on Equity Ratio	1.51	4.21	Decrease in the ratio mainly increase in net worth driven by higher profitability.
Trade Payables turnover Ratio	5.93	6.32	NA
Net capital turnover Ratio	3.35	(11.99)	Decrease in the ratio mainly company started fully operational during the year.

10. Cautionary Statement

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of the applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

For and on behalf of the Board of Directors Indosolar Limited

Sd/-

Chairman and Managing Director DIN: 00293668 Place: Mumbai Date: July 23, 2026