Sahaj Solar Ltd Management Discussions

I. Global Economy Global Economic Landscape

The global economy demonstrated resilience during FY26 despite persistent geopolitical tensions, trade uncertainties, and uneven regional growth dynamics. According to the IMF, global GDP growth is estimated at approximately 3.0%-3.1% in 2025, with a modest improvement to 3.1%?3.3% in 2026. Advanced economies continued to witness slower growth of around 1.8%, impacted by weak industrial activity, elevated borrowing costs, and geopolitical disruptions. In contrast, emerging markets and developing economies remained the primary drivers of global growth at nearly 3.9%, led by India and emerging Asia.

Global inflationary pressures continued to ease during FY26 as supply chain conditions normalized and the impact of prior monetary tightening measures started reflecting across economies. However, inflation remained vulnerable to commodity and energy price volatility arising from geopolitical developments, particularly disruptions in the Middle East. Global inflation is expected to gradually moderate toward the 3%-4% range over the medium term, although regional trends remained divergent

Against this backdrop, global central banks adopted a more balanced policy stance during FY26. The US Federal Reserve maintained a cautious easing trajectory with expectations of limited rate cuts, while the European Central Bank largely maintained a measured approach amid weak growth and inflationary concerns. Overall, monetary policy globally moved gradually toward a more neutral and accommodative stance compared to the aggressive tightening cycle witnessed in previous years.

Overall, the global economy in FY26 operated in a moderated yet stable growth environment, supported by emerging market resilience, easing inflationary pressures, and gradual monetary policy normalization, while continuing to face risks from geopolitical volatility, trade disruptions, and uneven regional recovery trends.

A. Global Power Sector

1. Global Electricity Demand Trends

Global electricity demand growth moderated to 3% year-on-year in 2025, compared to a sharp 4.4% increase in 2024, which had been driven by extreme weather conditions and elevated industrial activity. Despite this normalization, the medium-term outlook remains robust, with demand projected to grow at an average annual rate of 3.6% over 2026-2030. This growth will be underpinned by rising electrification across industries, accelerated adoption of electric vehicles, expanding cooling requirements, and the rapid scale-up of data centre infrastructure.

Notably, China continues to anchor global demand, with consumption rising ~5% in 2025 and expected to contribute nearly half of incremental global demand through 2030.

2. Renewables Reshaping the Generation Mix

The global power mix is undergoing a structural transition, with renewables surpassing coal generation for the first time in the first half of 2025. Renewable generation increased by 7.7% to 5,072 TWh, accounting for 34.3% of total electricity generation, while coal declined to a 33.1% share. Solar energy led this expansion, registering a record 31% growth and contributing the majority of incremental demand during the period. Capacity additions remain heavily skewed toward clean energy, with solar and wind jointly accounting for approximately 80% of new installations in 2025. This momentum is expected to continue, with renewable generation projected to increase by ~60% by 2030, firmly establishing it as the dominant source of global electricity.

3. Coal Dynamics and Regional Divergence

Coal-fired generation remained broadly stable at a global level in 2025; however, regional trends diverged significantly. In key Asian markets such as India and China, coal usage declined due to slower demand growth and accelerated renewable deployment. In contrast, coal consumption increased in the United States, supported by higher natural gas prices and a slower pace of coal plant retirements. In Europe, while record solar generation provided downward pressure on coal usage, weaker hydropower and wind output offset these gains, resulting in a more muted decline. These dynamics highlight the transitional nature of coal within the evolving energy mix.

4. Emissions Stabilization and Energy Transition Outlook

A critical milestone was reached in 2025 as power sector CO2 emissions plateaued at approximately 13,900 million tonnes, breaking the trend of consistent annual increases. This stabilization occurred despite continued demand growth, indicating that renewable expansion is beginning to displace fossil-based generation rather than merely supplement it. Over the next five years, renewables, natural gas, and nuclear energy are expected to meet all incremental electricity demand. Concurrently, investments in grid infrastructure and storage are accelerating, driven in part by surging data centre demand and AI-led digital expansion. The global electricity system is thus entering a phase of structural decarbonization, with carbon intensity expected to decline at an accelerated pace through 2030.

II. Industry Overview

1. Global Renewable Energy Transition ? Structural Tailwinds

The global energy landscape continues to undergo a structural transition toward renewables, with total installed capacity reaching approximately 5,149 GW in CY 2025 following record additions of 692 GW. Renewables accounted for nearly 49% of total installed capacity and over 85% of incremental additions, underscoring a decisive shift in global power systems. Solar and wind remained the primary growth drivers, contributing ~96.8% of new renewable capacity, led by solar additions of 511 GW. While deployment remains geographically concentrated across China, the United States, and Europe, the broader trend reflects increasing electrification, policy support, and cost competitiveness of clean energy. However, the current growth trajectory remains marginally below the pace required to meet global 2030 decarbonisation targets, indicating sustained long-term demand visibility for renewable solutions.

2. India Renewable Energy Sector ? High-Growth Opportunity

India continues to emerge as one of the fastest-growing renewable energy markets globally, supported by strong policy momentum, rising electricity demand, and energy transition commitments. During FY2025-26, the country recorded its highest-ever renewable capacity additions of ~44.5 GW (till November 2025), taking total installed capacity to ~254 GW, representing a 23% year-on-year increase. Solar energy remains the key growth engine, with installed capacity exceeding 150 GW, while wind capacity has crossed 50 GW. Indias strong global ranking across solar, wind, and overall renewable capacity highlights its strategic importance in the global energy transition. This sustained growth provides a robust demand environment for integrated renewable energy players across manufacturing, EPC, and decentralised solutions

3. Domestic Manufacturing Push ? Enabling Backward Integration

The Government of Indias focus on building a self-reliant renewable ecosystem is driving significant expansion in domestic solar manufacturing capacity. Under policy initiatives such as the Production Linked Incentive (PLI) scheme, Indias module manufacturing capacity has scaled up to ~120 GW, with cell capacity at ~29 GW as of mid-2025. While execution timelines remain a work in progress, the ongoing capacity build-out is expected to reduce import dependence and strengthen supply chain resilience. Additionally, evolving global trade dynamics have created export opportunities for Indian manufacturers. This environment is particularly favourable for companies with in-house or integrated module capabilities, enabling better cost control, quality assurance, and margin stability across project execution.

4. Decentralised Solar & Agriculture ? A Scalable Growth Segment

Decentralised renewable applications are gaining traction, particularly in the agriculture sector through schemes such as PM-KUSUM. The programme aims to deploy 34,800 MW of solar capacity through decentralised plants and solar-powered irrigation systems. As of FY2025, over 10 lakh solar pumps have been installed or solarised, with a sharp acceleration in deployment during the year. This segment presents a significant opportunity for companies engaged in solar water pumping solutions, given its scale, policy support, and recurring demand across rural and semi-urban markets. The increasing focus on energy access, farmer income enhancement, and sustainable irrigation is expected to drive continued growth in this segment.

5. EPC Evolution ? Shift Toward Integrated Solutions

Indias renewable EPC segment is witnessing a transition from standalone solar or wind installations to integrated and hybrid energy solutions. Record capacity additions, including 22 GW in H1 2025 alone, highlight strong execution capabilities across the sector. There is a clear shift toward complex project structures such as hybrid (solar + wind), storage-integrated systems, and round-the-clock (RTC) renewable energy solutions. This evolution is expanding the scope of EPC players from pure execution to end-to-end solution providers, encompassing design, engineering, procurement, commissioning, and lifecycle support. Companies with diversified execution capabilities and strong supply chain linkages are better positioned to capitalise on this transition.

6. Pathways to Sustainable Growth

Despite strong growth momentum, structural challenges remain, particularly in grid infrastructure and power evacuation. High renewable penetration states have reported curtailment levels of 10-30%, while a portion of awarded capacity remains stalled due to delays in power sale agreements. Addressing these constraints through investments in transmission infrastructure, grid modernisation, and energy storage will be critical to sustaining growth. Going forward, the sector is expected to witness increased focus on storage integration, upstream manufacturing (including polysilicon and wafers), and digital grid management.

III. Company Overview

Sahaj Solar Limited is a renewable energy solutions provider incorporated in 2010 and headquartered in Ahmedabad, Gujarat, India. The Company operates as an integrated solar player with a presence across the value chain, including photovoltaic (PV) module manufacturing, engineering, procurement and construction (EPC) services, and solar water pumping systems.

The Companys manufacturing facility is located in Gujarat and focuses on the production of solar PV modules, which are also utilised in its downstream applications such as solar pumping solutions. Its EPC capabilities include end-to-end project execution, covering design, engineering, procurement, installation, and commissioning of solar power systems across commercial, industrial, agricultural, and government segments. In addition to utility-scale and rooftop solar solutions, the Company offers a diversified portfolio of products including solar water pumps, solar street lighting systems, and off-grid power solutions. This integrated business model enables Sahaj Solar to address both centralised and decentralised renewable energy demand, positioning it as a comprehensive clean energy solutions provider in India.

IV. SWOT Analysis Strengths

1. Integrated business model across the solar value chain

The company operates across PV module manufacturing, EPC services, and solar water pumping systems, providing diversification and cross-segment synergies.

2. Strong positioning in a high-growth sector

Indias renewable push and solar dominance directly benefit Sahaj Solar, which is well positioned as a domestic module manufacturer to capture industry tailwinds.

3. Established manufacturing capabilities with certifications

The company has a PV module manufacturing facility (~100 MW capacity) with IEC approvals and MNRE recognition, supporting credibility and execution capability.

4. Diversified product portfolio and applications

Beyond modules, offerings include solar pumps, EPC solutions, rooftop systems, and off-grid products?allowing participation in both utility-scale and decentralised segments.

5. Experienced management and execution track record

Promoter and management experience, along with a pan-India presence and order book visibility, strengthen execution reliability.

Weaknesses

1. Relatively small scale compared to industry leaders

With ~100 MW manufacturing capacity, Sahaj Solar is significantly smaller than large integrated players, limiting economies of scale and pricing power.

2. Working capital intensity and receivables risk

The company has high debtor days (~233 days) and rising working capital cycle, which can strain liquidity and cash flows.

3. Execution dependency on EPC and government-linked projects

A significant portion of business is linked to EPC and schemes like solar pumps, which are exposed to delays in payments, approvals, and tendering cycles (structural sector issue).

4. Limited upstream integration

Absence of backward integration into cells/wafers/polysilicon increases dependence on external suppliers and exposes margins to raw material price volatility.

Opportunities

1. Massive growth in Indias renewable energy demand

Indias aggressive renewable targets and rapid capacity additions provide long-term demand visibility across modules, EPC, and decentralised solutions.

2. Government-driven schemes (PM-KUSUM, PLI)

Strong policy support for solar pumps and domestic manufacturing creates a scalable opportunity, especially aligned with Sahaj Solars core segments.

3. Shift toward integrated and hybrid energy solutions

Increasing adoption of hybrid (solar + wind + storage) and RTC projects expands the scope for EPC players to deliver end-to-end solutions.

4. Export opportunity due to global supply chain shifts

Favourable trade dynamics for Indian solar manufacturers open up potential export markets, especially as global demand accelerates.

Threats

1. Intense competition from large integrated players

Companies with multi-GW capacities and backward integration (cells, wafers) have cost advantages, which could pressure margins and market share.

2. Policy and regulatory dependency

The business is highly influenced by government policies, subsidies, and tendering processes?any slowdown or change can impact growth visibility.

3. Grid and infrastructure bottlenecks

Sector-wide issues such as transmission constraints and project curtailment can delay execution and revenue realization.

4. Raw material price volatility and import dependence

Dependence on imported inputs (especially upstream components) exposes the company to currency fluctuations and global price swings

V. SEGMENT WISE/PRODUCT WISE PERFORMANCE

FY 2025-26 Product-Wise Highlights:

Product Segment	Performance Highlights (Company to give specific details)
Solar PV Modules	Continued to be a core revenue driver, supported by strong demand and manufacturing scale.
Solar Water Pumping Systems	Over 50,000 units executed cumulatively; remains a flagship product line.
EPC & Rooftop Solar Projects	Benefited from increased institutional orders and government initiatives.
AMC & Consultancy Services	Showed steady growth, reflecting rising demand for post-installation support.

VI. Financial Performance

The following table sets forth our financial summary (Consolidated):

Particulars (in Crs.)	FY 2025-26	FY 2024-25
Share Capital	2,197.20	1,098.60
Net Worth	13,813.95	10,862.06
Revenue	41,919.35	32,979.34
Profit After Tax	3032.11	2,800.70
Basic and Diluted Earnings per Equity Share (Considering bonus in all previous years) (in Rs.)	13.46	27.21
Net Asset Value/Book Value per Equity share (Considering bonus in all previous years) (in Rs.)	13,813.95	10,862.06
Total Borrowings	17,553.03	5,740.14

VII. Key Financial Indicators (Consolidated)

Metrics	2025-26	2024-25
Revenue from Operations	41,919.35 Cr	32,979.34 Cr
Total Income	42,108.46 Cr	33,082.14 Cr
EBITDA	5,367.07 Cr	4,323.47 Cr
EBITDA Margin	12.80%	13.11%
Profit after Tax	2,957.27 Cr	2,800.71 Cr
Profit after Tax Margin	7.23%	8.49%
Return on Capital Employed	16.60	25.25
Debt-Equity Ratio	1.27	0.53

VIII. OUTLOOK

The outlook for Sahaj Solar Limited remains positive, supported by the accelerating adoption of renewable energy, favourable government policies, and increasing investments in solar infrastructure across India and emerging international markets. With a robust order book of approximately Rs.402 crore, expanding EPC opportunities, growing participation in government- led solar programs such as PM-KUSUM, and a strong presence in solar water pumping solutions, the Company is well positioned to capitalize on the sectors long-term growth potential. The Companys vertically integrated business model, in-house manufacturing capabilities, and continued investments in advanced technologies such as anti-soiling and nano- coated solar modules are expected to enhance operational efficiencies and strengthen competitiveness. Furthermore, the strategic partnership with IDMC Limited to solarize Indias dairy cold-chain infrastructure opens a significant new growth avenue, while expansion into African markets such as Zambia and Uganda provides additional diversification opportunities. Backed by a healthy project pipeline, improving execution capabilities and sustained demand for clean energy solutions, Sahaj Solar remains focused on delivering sustainable growth, maintaining financial discipline and creating long-term value for all stakeholders.

IX. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Sahaj Solar Limited has established a comprehensive internal control framework aimed at ensuring the accuracy of financial reporting, safeguarding assets, and enhancing operational efficiency. The framework is aligned with the requirements of the Companies Act, 2013, and is subject to periodic review by the Audit Committee and senior management. The Companys internal controls encompass all key business functions, including procurement, manufacturing, inventory management, project execution, and financial reporting. These controls are supported by well-defined policies, standard operating procedures, and an ERP-driven system that strengthens transparency, monitoring, and accountability across operations. During FY 2025-26, internal audits were conducted on a regular basis across various functions, with no material weaknesses observed. Further, the statutory auditors, in their report dated March 31, 2026, have confirmed that the Companys internal financial controls over financial reporting are adequate and operating effectively. The Board believes that the existing internal control framework is commensurate with the Companys scale and nature of operations, providing reasonable assurance on the reliability of financial reporting and the effectiveness of operational processes.

X. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Sahaj Solar Limited considers human capital to be a key enabler of its long-term success. The Company believes that its employees play a pivotal role in driving growth and sustaining operational excellence. With a focus on attracting and retaining high-quality talent, the Company invests in continuous learning and development initiatives aimed at enhancing employee skills, building competencies, and enriching professional capabilities. These efforts support the Company in achieving its strategic and operational objectives. The Company is committed to nurturing a performance-driven and merit-based culture that promotes accountability, ownership, and innovation across all levels. Industrial relations remained stable and harmonious during the year, reflecting a positive, collaborative, and productive work environment.

XI. CAUTIONARY STATEMENT

Certain statements in this Management Discussion & Analysis Report, including the Companys projections, estimates, expectations, plans, or predictions, as well as comments on industry conditions, are “forward-looking statements.” Actual results may differ materially from those expressed or implied, as the Companys operations are subject to various external factors beyond its control.