Onix Solar Energy Ltd Management Discussions

1. Industry Structure and Developments

Indias clean energy build-out reached a defining milestone during the period under review. As of end-Iuly 2026, the countrys non-fossil power

Exhibit 1: Indias non-fossil power capacity — progress against the 2030 national target.

A manufacturing base racing to keep pace

This growth in installed generation capacity has driven rapid expansion of Indias solar module manufacturing base. As of August 2026, module manufacturing capacity listed under the Ministry of New and Renewable Energys Approved List of Models and Manufacturers (ALMM) stood at approximately 217 GW — a substantial increase over little more than a year. This expansion rests on a deliberate policy architecture: Basic Customs Duty of 40% on imported modules and 25% on imported cells (effective April 2022); the ALMM listing

generation capacity crossed 300 GW — placing India past 60% of the Governments 500 GW nonfossil capacity target for 2030. Solar power has been the principal driver of this growth, with installed capacity reaching approximately 165 GW by mid-2026, up fromjust 2.82 GW in 2014.

framework itself; and a Production-Linked Incentive scheme with an outlay of approximately X24,000 crore for high-efficiency solar PV manufacturing. The Ministrys own budgetary allocation for FY27 stands at X44,614.67 crore, an increase in excess of 40% year-on-year.

The gap that matters: modules versus cells

Indias module manufacturing capacity has significantly outpaced its upstream cell manufacturing capacity — the more capital- and technology-intensive stage of the value chain. As of December 2025, cell manufacturing capacity stood at approximately 27 GW, against module capacity exceeding 200 GW.

Governments ALMM List-11 framework came into effect. Under this framework, solar modules deployed in government-backed projects, government-assisted schemes, and open-access or net-metered installations must incorporate cells sourced from domestically approved manufacturers. This policy shift materially increases the strategic value of backward integration into cell manufacturing, and correspondingly increases the exposure of module-only manufacturers to a constrained and increasingly contested external cell supply market.

Gujarat: the centre of gravity

Gujarat continues to serve as the principal hub for Indias solar manufacturing industry, hosting a significant share of the countrys ALMM-listed module capacity as well as leading investment in next-generation cell manufacturing, supported by the states industrial infrastructure, port access, and

a consistent renewable energy policy environment sustained over more than a decade. The Companys manufacturing operations, based in the Rajkot cluster of Gujarat, are positioned within this ecosystem alongside a number of larger and longer-established solar manufacturers also headquartered in the state.

A year of trade volatility

The period under review also saw considerable volatility in the international trade environment. Tariffs applied by the United States to Indian solar module imports rose from approximately 50% in mid-2025 to a preliminary countervailing duty rate as high as 126% by late 2025, before a revised bilateral trade understanding, concluded in early 2026, brought the applicable tariff down to approximately 18% by February 2026. Indian solar module exports to the United States declined by approximately 35% across this period of escalation.

What this means, and what it does not mean

It would be easy to read the above as a story of unqualified tailwinds — a fast-growing market, protective policy, and a structural gap waiting to be filled. That would be an incomplete reading. Government capacity targets can slip, PLI disbursement timelines can extend, and a gigawatt of announced demand does not automatically become a gigawatt of contracted, paid revenue for any single manufacturer — it becomes revenue only for manufacturers who execute reliably, price competitively, and qualify their product with customers on schedule.

What the industry structure above does provide is a genuine, multi-year demand runway in exactly the segment the Company has chosen to compete in, and a live, current policy reason to move early on cell manufacturing rather than later. The Companys task, addressed in the sections that

follow, is converting that structural opportunity into installed capacity, qualified product, and collected revenue — and being equally candid about the execution and working-capital pressures that stand between the opportunity and the outcome.

2. Business Overview and Business Model

2.1 What the Company does

Onix Solar Energy Limited is engaged in the manufacturing of solar photovoltaic modules and is listed on the BSE (Scrip Code: 513119). The Companys core business model is straightforward: procure raw materials and components — principally solar cells, glass, backsheet, junction boxes, and framing material — convert them into finished, tested solar modules through a controlled manufacturing process, and sell them to EPC contractors, project developers, and, over time, directly into government and institutional renewable energy programmes.

2.2 Manufacturing base

The Company operates two manufacturing facilities in the Rajkot cluster of Gujarat: its original facility at GIDC Metoda, which also serves as the Companys corporate office, and a second facility at

Shapar Bilyada, which adds production depth and supply chain resilience. Together, these facilities provide an installed module manufacturing capacity of 200 MW. During the year under review, the Company operated this capacity at an average utilisation of approximately 90%.

2.3 Product portfolio

• Mono PERC bifacial modules — published efficiency of 20.9%, power output up to 540 Wp (144-cell configuration).

• N-type TOPCon bifacial modules — published efficiency of 21.6%, power output ranging from 560 to 670 Wp (132/144-cell configuration).

Every module manufactured undergoes testing through the Companys in-house PV Module Test Lab prior to dispatch.

2.4 Manufacturing process and quality control

The Companys production process follows five sequential stages for every module manufactured, designed to identify and resolve quality issues at the point of manufacture rather than through postdispatch warranty claims.

2.5 Corporate structure

Onix Renewable Limited is the Companys controlling shareholder. Nexgenix Solar Manufacturing Private Limited is a 99%-owned subsidiary of the Company and is consolidated in its financial statements; the goodwill of X458.44 crore recognised on this consolidation reflects the value attributed to this acquisition during theyear, and is discussed further in Section 5.

2.6 Strategic priorities

The Companys near-term strategy rests on three pillars: scale — a 1,200 MW module manufacturing facility under development, taking total installed capacity to approximately 1.4 GW; backward integration — the planned development of the Companys own solar cell manufacturing capability, addressed in Section 3; and capital discipline — this years expansion has been funded through equity rather than debt, discussed in Section 5.

3. Segment / Service-line Performance

The Company currently operates within a single reportable business segment — the manufacturing and sale of solar photovoltaic modules. Performance for the year is accordingly discussed as one integrated operating segment across the sub-sections below.

3.1 Capacity utilisation

Against the Companys installed base of 200 MW, the Company achieved an average utilisation of

approximately 90% during the year. This is, in managements assessment, the single most significant operating indicator of the year: it demonstrates that the Companys existing manufacturing infrastructure, workforce, and quality processes are capable of sustained operation close to rated capacity — a necessary precondition for the credibility of the capacity expansion described below.

3.2 Product mix and technology positioning

The Companys current output spans both Mono PERC bifacial and N-type TOPCon bifacial technology, with the industry — and the Companys own roadmap — progressively favouring the higher-efficiency TOPCon and bifacial category. The Companys technology roadmap additionally provides for a transition towards Heterojunction and Back Contact (HIT/BC) module technology in later phases, positioning the Companys product offering to track the industrys advancing technology frontier.

3.3 The expansion roadmap

The Companys 1,200 MW module manufacturing facility, which will take total installed capacity to approximately 1.4 GW upon completion, remained under development during the year and did not contribute to reported revenue. Alongside module capacity, the Company is developing its own solar cell manufacturing capability in two phases: an initial 1,200 MW TOPCon cell production line, followed by a further 1,200 MW of HIT/BC cell capacity in a subsequent phase.

Exhibit 6: Onix Solar Energy Limiteds technology and capacity roadmap — module and cell manufacturing.

3.4 I ndependent power production and green hydrogen

The Companys broader roadmap extends to independent power production, with planned capacity additions structured in phases towards an aggregate target of approximately 1,300 MW by 2030, and to green hydrogen, presently at the research and development stage, with a phased production target of 1,50,000 metric tonnes per annum by 2030. Neither initiative contributed to the Companys revenue during the year under review; both are disclosed as elements of the Companys long-term strategic direction rather than near-term revenue contributors.

3.5 Revenue for the year

On a standalone basis, the Company reported revenue from operations of X157.12 crore for FY26. On a consolidated basis, incorporating the results of Nexgenix Solar Manufacturing Private Limited, the Company reported revenue from operations of X165.42 crore. A detailed discussion of these results, and of the Companys profitability and balance sheet position, follows in Section 5.

4. Opportunities and Threats

4.1 Opportunities

• The domestic cell-supply gap. With Indias cell capacity (-27 GW) at roughly one- seventh of its module capacity (-217 GW), and ALMM List-II now directing demand specifically towards domestically cell- backed modules, manufacturers who move early to build cell capacity are positioned to capture a durable structural advantage. The Companys planned 2,400 MW of cell capacity is a direct response to this opportunity.

• Scale of Indias domestic demand. To remain on track for its 500 GW target, India needs to add renewable capacity at a

sustained pace of approximately 45-50 GW annually. Schemes such as PM-KUSUM — under which the Onix Group has been recognised as one of the largest single awardees, with an allotted capacity of 2.7 GW — together with government tenders, rooftop programmes, and open-access installations, represent a large and diversified domestic demand base.

• Access to Group ecosystem and relationships. As part of the Onix Group, the Company benefits from established relationships across EPC, IPP, and O&M businesses, providing project pipeline visibility and institutional credibility that a comparable standalone manufacturer would ordinarily take considerably longer to build.

• Sustained and increasing policy support. Import duty protection, the ALMM framework, the PLI scheme, and a sharply increased FY27 MNRE budget allocation together represent a multi-year policy commitment providing a comparatively stable planning environment.

• Technology positioning. The Companys phased roadmap — from current Mono PERC/TOPCon production, through TOPCon cell manufacturing, towards HIT/BC module and cell technology — positions it to track the industrys advancing efficiency standards rather than commit capital to a single, potentially ageing technology.

4.2 Threats

• Cell-supply dependency in the interim. Until the Companys own cell capacity is commissioned, its module business remains dependent on externally sourced cells, in a market where demand for ALMM- compliant domestic cells is increasing faster than supply.

• Execution risk on a large-scale expansion. Increasing installed module capacity from 200 MW to -1.4 GW is a sevenfold increase, alongside a parallel and more technologically complex cell manufacturing build-out. The value of this expansion depends entirely on timely commissioning, successful product qualification, and effective commercial conversion.

• Working capital intensity during scale-up. As discussed in Sections 5 and 6, the year saw a substantial increase in receivables and inventory relative to sales — a normal feature of a capacity build-out phase that nonetheless requires continued, disciplined working capital management.

• Trade and export-policy volatility. The tariff swing experienced by Indian solar exporters to the United States during 2025-26 illustrates the speed with which external trade policy can affect a manufacturers addressable market. While the Company does not currently carry material export volumes, any future export strategy would need to explicitly account for this volatility.

• Industry capacity growth and pricing pressure. With Indias ALMM-listed capacity having grown substantially within the twelve months preceding this report, the industry carries a risk of capacity additions outpacing near-term demand growth in certain segments, which could pressure realisations sector-wide.

• Reliance on continued policy consistency. A meaningful proportion of the Companys addressable demand is linked to continued government policy — ALMM enforcement, customs duty protection, and scheme- based demand such as PM-KUSUM.

5. Financial Performance Discussion

5.1 Standalone results — FY26

On a standalone basis, the Company reported revenue from operations of X157.12 crore for theyear ended 31 March 2026, against total expenses of X117.55 crore, resulting in a profit before tax of X40.19 crore. The provision for tax for the year was nil, and profit after tax accordingly also stood at X40.19 crore. The absence of a tax provision reflects the Companys utilisation of available tax benefits and allowances against theyears taxable profit; this position should be read in context when comparing FY26 profitability to subsequent years, in which the Companys effective tax position may differ.

5.2 Consolidated results — FY26

On a consolidated basis, incorporating the results of subsidiary Nexgenix Solar Manufacturing Private Limited, the Company reported consolidated revenue from operations of X165.42 crore and consolidated total income of X166.65 crore, against consolidated total expenses of X122.12 crore, resulting in a consolidated profit before tax of X44.53 crore. The consolidated tax provision for the year was X13.05 crore, and consolidated profit after tax stood at X31.48 crore, translating to a consolidated earnings per share of X12.56.

crore) is attributable to the contribution of Nexgenix Solar Manufacturing Private Limited, and reflects the additional scale the Company gained through this subsidiary during the year. Shareholders should treat standalone and

consolidated figures as complementary rather than interchangeable measures of performance, and this report has accordingly presented both distinctly rather than combining them.

5.4 Financial performance summary table

Particulars (. in Crore)	Standalone FY26	Consolidated FY26
Revenue from Operations	157.21	165.42
Total Income	157.76	166.65
Total Expenses	117.56	122.12
Profit Before Tax	40.20	44.53
Tax Provision	10.04	13.05
Profit After Tax	30.16	31.48
Earnings Per Share (H)	12.03	12.56

5.5 Balance sheet — Consolidated, FY26

The Companys consolidated balance sheet changed substantially over the year. Total equity (net worth) increased from X5.42 crore at the close of FY25 to X774.19 crore at the close of FY26, comprising share capital of X25.07 crore and reserves and surplus of X749.12 crore. This increase is primarily attributable to two factors: the X249.87 crore raised through the Companys rights issue

during the year, and the goodwill of X458.44 crore recognised on consolidation, arising from the Companys 99% acquisition of Nexgenix Solar Manufacturing Private Limited. Shareholders should note that this goodwill represents an accounting recognition of the value attributed to the acquired business at the time of acquisition, and is distinct from cash-generating operating assets.

Balance Sheet Item (. in Crore)	FY26	FY25
Total Equity (Net Worth)	774.19	5.42
— Share Capital	25.07	—
— Reserves & Surplus	749.12	—
Total Non45urrent 6orrowin8s	55.62	—
Total 5urrent Liabilities	35.12	—
— of which Trade Payables	19.02	—
Total Assets	864.94	—
Goodwill on Consolidation	458.44	—
Inventories	77.18	—
Trade Receivables	118.58	—
Cash & Bank Balances	2.10	—

5.6 Cash flow

The Companys net cash Wow from operations for FY26 was negative X188.12 crore on a consolidated basis. This outcome is directly connected to the substantial increase in trade receivables and inventory discussed above, and reflects the working capital demands typical of a manufacturing business scaling production and sales activity ahead of the full realisation of cash collections — a pattern also evident in the Companys inventory turnover and trade receivables turnover ratios, discussed in Section 6.

Management wishes to state plainly that this is a characteristic feature of a capacity scale-up year rather than an indicator of underlying operating weakness, but it is a trend management is monitoring closely and intends to actively manage as new capacity is commissioned and begins converting into collections. The Companys preference for equity funding over debt during the year — evidenced by the two rights issues and the resulting decline in the Debt-Equity Ratio discussed in Section 6 — has been a deliberate response to this working capital intensity,

preserving balance sheet flexibility during a phase of significant cash consumption.

6. Key Financial Ratios — Significant Changes

As disclosed in Note 41 to the standalone financial statements for the year ended 31 March 2026, in accordance with Schedule V, Part B of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Ratio	FY26	FY25	Change	Reason for Change
Current Ratio	8.05	1.16	+594%	Increase in current assets
Debt-Equity Ratio	0.03	6.27	-99%	Decrease in debt due to issue of new equity and its utilisation
Debt Service Coverage Ratio	271.26	3.70	+7,232%	Increase in net profit after tax
Return on Equity (ROE)	0.08	0.31	-75%	Due to issue of equity shares
Inventory Turnover Ratio	1.67	193.25	-99%	See Section 6.2
Trade Receivables Turnover Ratio	3.47	187.6 5	-98%	See Section 6.2
Trade Payables Turnover Ratio	21.66	57.32	-62%	As the debtor cycle improved, the creditor cycle also improved
Net Capital Turnover Ratio	0.85	6.30	-87%	As the turnover increased
Net Profit Ratio	0.19	0.05	+284%	Due to increase in sales and profit
Return on Capital Employed (ROCE)	0.28	0.32	-11%	—
Return on Investment (ROI)	—	—	—	No investment income during the year

6.1 Reading these ratios together

Two developments dominate the movement in this years ratios, and they are best read as connected rather than in isolation.

The first is the Companys rights issues. The Debt- Equity Ratio fell from 6.27 to 0.03, and the Current Ratio rose from 1.16 to 8.05, both substantially driven by the X249.87 crore of fresh equity capital raised during the year and the corresponding reduction in reliance on borrowed funds. The Debt Service Coverage Ratio improved sharply for the same reason, combined with growth in net profit after tax. Return on Equity, by contrast, declined from

0.31 to 0.08 — not because underlying profitability weakened, but because the equity base against which profit is measured grew far faster than profit itself in the year the capital was raised. This is a normal and expected pattern in the year following a substantial capital infusion, and shareholders are encouraged to read FY26s ROE in this context rather than as a standalone indicator of business performance.

6.2 I nventory and receivables turnover — an honest reading

The Inventory Turnover Ratio fell from 193.25 to 1.67, and the Trade Receivables Turnover Ratio fell from 187.65 to 3.47. Both movements indicate a

substantial increase in average inventory and average trade receivables held during the year, relative to sales — consistent with the Companys year-end inventory of X77.18 crore and trade receivables of X118.58 crore on a consolidated basis, and consistent with the negative operating cash Wow discussed in Section 5.6. This pattern is characteristic of a manufacturing business scaling production and sales activity during a capacity expansion phase, where finished and in-process inventory, and outstanding receivables from a growing customer base, build up ahead of the cash collection cycle catching up. Management is monitoring this trend closely and views disciplined working capital management as a priority alongside the Companys capacity expansion over the coming year.

6.3 Profitability and capital employed

The Net Profit Ratio improved from 0.05 (5%) to 0.19 (19%), reflecting the improvement in the Companys underlying profitability during the year. Return on Capital Employed declined modestly from 0.32 to

0.28, reflecting the substantial increase in capital employed — driven by the equity raise — outpacing the growth in earnings before interest and tax over the same period, consistent with the ROE trend discussed in Section 6.1.

7. Outlook

Managements outlook for the coming year is structured around a sequential execution plan, prioritised in the order in which each stage must be completed before the next can meaningfully begin.

• Commission — completing construction, installing and testing utilities, and conducting trial production runs at the planned 1,200 MW facility.

• Qualify — stabilising manufacturing yield, completing product testing, and securing the customer and regulatory approvals necessary before new capacitys output can be commercially sold.

• Commercialise — building a confirmed order book, dispatching product, and collecting payment.

• Report — continued, transparent reporting of output, capacity utilisation, and cash conversion to shareholders on a regular basis.

7.1 Cell manufacturing and beyond

Alongside module capacity, management intends to progress the Companys planned cell manufacturing capability in phases — an initial

1.200 MW TOPCon cell line, followed by a further

1.200 MW of HIT/BC cell capacity — directly in response to the ALMM List-II policy environment discussed in Section 1. The Companys independent power production and green hydrogen initiatives will similarly be progressed over the medium term, with further detail to be provided as each moves from planning towards execution.

8. Risks and Concerns

Execution and commissioning risk

The Companys near-term growth outlook is substantially dependent on the timely commissioning of its planned 1,200 MW facility. Delays in construction, equipment installation, utility connection, or the testing and approval process could materially affect the revenue and profitability outlook described in Section 7.

Cell-supply dependency

Until the Companys own cell manufacturing capacity is commissioned, its module business remains dependent on externally sourced solar cells, in a market where demand for ALMM List-II- compliant domestic cells may outstrip near-term supply.

Working capital and liquidity risk

As discussed in Sections 5 and 6, inventory and trade receivables grew substantially relative to sales during FY26, resulting in negative operating cash Wow of X188.12 crore on a consolidated basis. Continued growth in working capital requirements, without a corresponding improvement in collection efficiency, could place strain on the Companys liquidity position and may necessitate further capital raising or borrowing.

Concentration risk — geography and product

The Companys entire manufacturing base is currently located within the Rajkot cluster of Gujarat, and its revenue is presently derived entirely from solar module manufacturing. Any disruption specific to this location, or any structural shift in demand away from the Companys current product technology, would affect the Company disproportionately relative to a more diversified manufacturer.

Trade and export-policy volatility

While the Company does not currently carry material export volumes, the volatility experienced by the broader Indian solar export industry during the year — tariffs moving from approximately 50% to a preliminary 126% and back to approximately 18% within months — illustrates a risk that would apply directly to any future export strategy the Company may pursue.

Industry capacity growth outpacing demand

With Indias ALMM-listed module capacity having grown substantially over the past year, the industry carries a risk of capacity additions outpacing nearterm demand growth in certain segments, which could pressure realisations sector-wide.

Interpretation risk in early-stage ratios

Several of the Companys key financial ratios for FY26, as set out in Section 6, reflect the substantial

impact of the rights issues and the Companys transition-phase working capital position, rather than a stabilised, steady-state pattern of operations. Shareholders and analysts are encouraged to read these ratios together with the explanatory discussion provided, and to exercise caution in extrapolating FY26 ratio levels directly into future periods.

Reliance on continued policy support

A meaningful proportion of the Companys addressable market depends on continued government policy support, including ALMM enforcement, import duty protection, and scheme- based demand. Any material change to this policy framework could affect the Companys competitive position.

PLEASE NOTE

This section does not purport to be an exhaustive statement of all risks facing the Company. Shareholders are advised to read this section together with the Companys audited financial statements and the risk factors disclosed elsewhere in this Annual Report.

9. Internal Control Systems and Their Adequacy

The Company has instituted internal control systems that management believes are commensurate with its size, the nature of its manufacturing operations, and the current complexity of its business, covering the authorisation, recording, and reporting of financial transactions, with the objective of providing reasonable assurance regarding the reliability of financial reporting and compliance with applicable la s.

At the operational level, the Companys manufacturing process incorporates structured, sequential quality control at every stage of

10. Human Resources / Industrial Relations

The Companys manufacturing operations are directly dependent on the discipline and consistency of its workforce at the Metoda and Shapar Bilyada facilities, and management regards the Companys ability to sustain approximately 90% capacity utilisation through the year as a direct refection of the quality and stability of that orkforce.

As part of the Onix Group, the Company draws on the wider Groups experienced base of engineering,

production, supported by in-house testing through the Companys PV Module Test Lab. This process- level control forms an integral part of the Companys broader internal control environment, given the materially higher cost and reputational consequence of quality issues identified after dispatch relative to those identified within the manufacturing process.

Given the substantial increase in the Companys working capital requirements during the year, management has identified strengthened controls over inventory management, receivables monitoring, and working capital forecasting as a priority area for the coming year, particularly as new manufacturing capacity is commissioned and scale increases further.

project management, and operations personnel as it builds out its own dedicated manufacturing workforce. As the new 1,200 MW facility progresses towards commissioning, management anticipates a corresponding and proportionate increase in its manufacturing, quality control, and technical orkforce.

Industrial relations across the Companys manufacturing facilities remained cordial throughout theyear, with no material disruption to production on account of labour relations.