Swelect Energy Systems Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

Company Overview

SWELECT Energy Systems Limited (SWELECT) celebrates 41 years of engineering excellence and marks its 31st year as a public listed company in FY 2025–26. From its origins as Numeric Power Systems Limited - a pioneering manufacturer of UPS and power electronics - the Company has transformed itself into a fully integrated clean energy solutions provider, with energy storage remaining at the core of its engineering heritage and competitive identity.

FY 2025–26 was a year of significant transformation - not just in scale, but in leadership, strategy and ambition. The Company adopted a new brand ethos - "Powering the World Responsibly" - signalling its evolution from a product-focused solar manufacturer to a comprehensive, responsible clean energy company serving homes, industries and utilities across India.

In September 2025, the Company welcomed Dr. Arulkumar Pudur Shanmugasundaram as Chief Executive Officer and Managing Director, with Mr. R. Chellappan assuming the role of Whole-Time Director and Vice Chairman. This leadership transition has brought renewed energy and sharper strategic focus across all business verticals - with an accelerated push into EPC, IPP, BESS and channel markets, alongside continued investment in manufacturing excellence at SWELECT HHV Solar Photovoltaics Private Limited (SHPV).

SWELECTs integrated business model spans Solar PV module manufacturing (through wholly-owned step-down subsidiary SHPV), Module Mounting Structures and Solar PV Balance-of-System (BOS) manufacturing, Engineering Procurement

& Construction (EPC), Independent Power Production (IPP), Battery Energy Storage Systems (BESS) and product distribution through a pan-India channel network. The Companys manufacturing infrastructure includes a Solar PV module manufacturing facility in Coimbatore with a 2 GW expansion nearing completion and an MMS and BOS manufacturing facility near Salem expanded to 1 GW installed capacity.

With over 10,700 installations and 1 GW+ of cumulative project experience, SWELECT stands as a trusted and growing contributor in Indias clean energy transition - committed to powering the world responsibly.

Business Segments

SWELECT Energy Systems Limited operates primarily under one business segment as defined under IND AS 108 - "Solar and other related activities." The below classification underscores the companys focused strategy in the energy sector.

Major Lines of Business - Manufacturing:

Solar PV Modules: TOPCon N-Type (M10R and G12R formats) and Mono PERC modules String Combiners, and Module Mounting Structures Electrical Switchboards for Solar Projects Servo Stabilisers

Major Lines of Business - Projects and Services:

Product Distribution through Channel Partners (Solar Power and Solar Water Pumping) Rooftop Solar Power Projects Ground-Mounted / Utility-Scale Solar Power Projects (Turnkey EPC) Green Energy Generation - Independent Power Production (IPP) and RESCO

Battery Energy Storage Systems (BESS) - Design and Implementation - Home, C&I, and Utility scale -

Solar PV Module Manufacturing

SWELECT HHV Solar Photovoltaics Private Limited (SHPV), a wholly-owned step-down subsidiary, is the manufacturing backbone of the SWELECT Group. Operating from a Class 100,000 / ISO 8 cleanroom facility in Coimbatore, Tamil Nadu, SHPV produces a comprehensive range of solar PV modules spanning Mono PERC (P-Type), TOPCon M10R and TOPCon G12R formats - in both Glass-Backsheet and Glass-to-Glass bifacial configurations - ranging from 365 Wp to 620 Wp. With a 2 GW capacity expansion nearing completion (expected July 2026), SHPV is positioned to serve domestic utility-scale, C&I, and export markets at significantly greater scale. The facility holds a full suite of domestic and international certifications including IEC, UL, BIS, ALMM, BEE and ROHS, and is enrolled in PVELs extended reliability certification programme. SHPVs competitive positioning is built on delivering high-quality, fully certified modules at near-market pricing. The facility met 90% of its energy requirements through solar power in FY 2025–26, and has made significant strides in workforce diversity, with women comprising 31% of core production roles against a near-term target of 50%.

MMS and BOS Manufacturing

SWELECTs Module Mounting Structures and Balance of Systems manufacturing facility near Salem, Tamil Nadu, reached a significant milestone in FY 2025–26 with installed annual capacity expanding from 500 MW to 1 GW. The facility produces a comprehensive range of mechanical and electrical balance of systems - including Module Mounting Structures, Array Junction Boxes, String Combiner Boxes, DC Distribution Boards, AC Distribution Boards, and Servo Stabilisers. Equipped with automated roll-forming machines and CNC fabrication systems, the facility provides SWELECT with a captive supply advantage for its EPC and IPP projects while also serving the external market.

Engineering, Procurement and Construction (EPC)

SWELECTs EPC division delivers turnkey solar power solutions across the full project size spectrum - from 1 MW rooftop installations to 50 MW+ ground-mount solar farms. The operationalisation of the Delhi office in FY 2025–26 extended SWELECTs execution reach pan-India, with active expansion planned across North India. The Company is pursuing hybrid solar-plus-BESS EPC mandates under SECI and state-level RTC tenders alongside its established C&I and developer project pipeline. SWELECT remains committed to a 1 GW cumulative EPC target.

Independent Power Production (IPP)

SWELECT is a significant and growing Independent Power Producer (IPP) with a solar asset portfolio that has crossed 160 MW. The Company is on a defined trajectory towards 1 GW in two years. The IPP portfolio spans ground-mount utility-scale plants, rooftop RESCO model installations, and SWELECTs maiden Wind-Solar-BESS hybrid project - serving state and central electricity boards and C&I customers under long-term Power Purchase Agreements. SWELECT is actively developing Round-the-Clock power models combining solar, wind, and BESS to attract premium PPA tariffs from C&I customers with CBAM compliance and net-zero obligations.

Battery Energy Storage Systems (BESS)

FY 2025–26 marked SWELECTs formal entry into the Battery Energy Storage Systems market as a structured commercial vertical - a natural evolution for a company whose roots in energy storage go back four decades to its origins as Numeric Power Systems. SWELECT launched a comprehensive BESS product range spanning home storage, C&I BESS systems, and utility-scale BESS. This launch is backed by the operational

SWELECTs EPC division delivers turnkey solar power solutions across the full project size spectrum - from 1 MW rooftop installations to 50 MW+ ground-mount solar farms. The operationalisation of the Delhi office in FY 2025–26 extended SWELECTs execution reach pan-India, with active expansion planned across North India.

credibility of SWELECTs 500 kW Wind-Solar-BESS hybrid pilot, commissioned in March 2025. The company plans to launch BESS products through the channel partner network, opening a new and recurring revenue stream for partners across Tier 1, 2, and 3 markets.

Channels Division

SWELECTs Channels Division distributes solar power products and solutions across India through a network of over 100 channel partners. The Division expanded its portfolio significantly in FY 2025–26 with the launch of Solar Power Generation System (SPGS) kits, the introduction of BESS products to the channel portfolio, and active participation in the PM Surya Ghar: Muft Bijli Yojana. It strengthened its market presence through expansion in North India and the establishment of strategic warehousing facilities in proximity to customers, enhancing reach and service capabilities across key markets. The Division also extended its direct project execution capability to rooftop systems up to 500 kW. Focus segments include residential rooftop, SME, C&I buyers, agricultural solar water pumping, and the growing BESS market.

The Division enters FY 2026–27 with an expanded product and service capability, building on the launch of SPGS kits and BESS products and the extension of direct rooftop execution to systems up to 500 kW achieved during FY 2025–26. PM Surya Ghar remains a sustained demand catalyst supporting growth in the residential segment. Plans for FY 2026–27 include deeper digital enablement of channel partners, expansion of BESS distribution, and growing penetration into Tier 2 and Tier 3 markets.

Economic Overview

Global Context

The global economy demonstrated resilience in 2025, with world GDP expanding 3.4% despite headwinds from shifting trade policies, geopolitical tensions, and regional divergence. Technology investment provided meaningful support, while global inflation moderated to 4.1% -- better than projected.

Geopolitical risks remained elevated. Tensions in West Asia, particularly around the Strait of Hormuz, pressured energy prices and supply chains, while the Russia-Ukraine conflict continued to weigh on oil, commodities, and freight costs.

Emerging markets outperformed at 4.4% collective growth, led by India at 7.7% and China at 5%. Advanced economies grew at a measured 1.9%, with the U.S. at 2.1%, the euro area at 1.4%, and Japan at 1.2%. Investment in renewables and clean technology continued to accelerate.

Looking ahead, the IMF (World Economic Outlook, April 2026) projects global growth to ease modestly to 3.1% in CY 2026 and 3.2% in CY 2027. Advanced economies are expected to slow gradually from 1.9% to 1.8% and then 1.7%, while emerging markets -- after moderating to 3.9% in CY 2026 -- are projected to recover to 4.2% in CY 2027. Trade fragmentation, climate disruptions, and regional conflicts remain persistent risks to the outlook. Global inflation is projected to edge up to 4.4% in CY 2026.

Indias Economic Trajectory

Indias economy remained resilient in 2025-26 despite global trade uncertainty. Second Advance Estimates put real GDP growth at 7.7% and GVA growth at 7.9%, driven by strong agricultural output, stable urban consumption, and easing inflation. India remains among the worlds fastest-growing major

Indias economy remained resilient in 2025-26 despite global trade uncertainty.

Second Advance Estimates put real GDP growth at 7.7% and GVA growth at 7.9%, driven by strong agricultural output, stable urban consumption, and easing inflation.

economies, with nominal GDP at ~$4.15 trillion in 2026 - the 6th-largest globally, a slight dip from 5th place, though growth is expected to drive recovery in ranking over time. Private consumption continues to anchor demand, while investment has strengthened, backed by Rs.12.2 lakh crore in public capex (Budget 2026-27) for infrastructure, manufacturing, and energy. Initiatives like Viksit Bharat 2047 support long-term self-reliance. Headline CPI fell to a historic low of 1.7% in the first nine months of FY 2025-26, with full-year inflation finalized at 3.4% by MoSPI, reflecting disciplined spending and steady credit growth. The banking sector remains healthy, with strong capital buffers and low NPAs. On structural reforms, India ranks as the third most desirable global manufacturing destination, targeting $1 trillion in goods exports by 2030 via Make in India and PLI schemes. The power sector mirrors this shift, with rising demand and an accelerating clean energy transition. India enters FY 2026-27 well-positioned—domestically anchored, policy-supported, and geared for sustainable, inclusive growth.

Sector Overview

Global Renewable Energy Landscape

Global renewable power capacity reached 5,149 GW by end-2025, with a record 692 GW added during the year—a 15.5% increase. Renewables now account for 49.4% of total installed global power capacity, up from 46.3% a year earlier. Solar and wind drove 96.8% of net renewable additions, and renewables made up 85.6% of all new capacity added globally, even as non-renewable installations partially recovered.

On generation, global electricity output rose over 850 TWh in 2025, with renewables and nuclear together exceeding the total increase, while fossil fuel generation declined as falling coal output outweighed a marginal rise in gas. Looking ahead, the IEA has trimmed its 2025-2030 renewable growth forecast by 5%, citing policy uncertainty, regulatory headwinds, and geopolitical volatility. Indias installed power capacity reached 532.74 GW by March 2026, with renewables crossing 51.6% of the mix (53.2% including nuclear). India has overtaken Brazil to rank third globally in installed renewable capacity, behind only China and the US. China, the US, and the EU together drove 79.5% of global renewable additions in 2025, with Chinas shift from fixed tariffs to competitive auctions reshaping procurement economics worldwide. Africa, despite low per-capita electricity consumption, is seeing demand grow faster than the global average, led by scalable solar deployment. Still, the gap to COP28s goal of tripling renewable capacity by 2030 remains significant, requiring a sharper acceleration in additions.

Overall, renewables now account for nearly half of global installed power capacity—a milestone reached on the back of record solar deployment in 2025.

Note: For the complete dataset, see Renewable Capacity Statistics 2026, available at: www.irena.org/Data/Statistical-publications/Yearbooks Disclaimer: This map is provided for illustration purposes only. Boundaries and names shown on this map do not imply any endorsement or acceptance by IRENA.

Indian Renewable Energy Landscape

India is on track to meet its COP26 commitment of 500 GW non-fossil fuel capacity by 2030. In June 2025, non-fossil sources crossed 50% of Indias cumulative installed capacity - five years ahead of schedule. By March 2026, this had grown to 283.47 GW, comprising 274.68 GW of renewables (150.26 GW solar, 56.09 GW wind, 11.75 GW bioenergy, 5.17 GW small hydro, 51.41 GW large hydro) and 8.78 GW of nuclear. Total power generation for 2025-26 (through March 2026) reached 1,845.921 BU, with non-fossil sources contributing 29.2% (538.97 BU). As of November 2025, Indias installed and pipeline renewable capacity stood at 486.94 GW, including 184.24 GW under implementation and 48.74 GW at tendering. The pipeline includes hybrid systems, round-the-clock supply arrangements, and thermal-plus-renewable projects aimed at strengthening grid reliability. With MNRE driving policy support, India remains well-positioned to meet its clean energy targets.

Generation Performance during April–March 2026 (Prov.)

Category-wise	Target Generation during current Year 2025–26 (Upto March 2026) (BU)	Generation during current Year 2025–26 (Upto March 2026)* (BU)	Achievement w.r.t. Targets (%)	Generation during Previous Year 2024–25 (Upto March 2025) (BU)	Growth w.r.t. Previous Year Generation (%)	% of Total Generation
E Generation from Fossil Fuel:
Coal	1,429.000	1,250.189	87.49	1,298.052	-3.69	67.7
Gas	37.262	26.009	69.80	31.580	-17.64	1.4
Lignite	37.000	30.323	81.95	32.995	-8.10	1.6
Diesel	0.400	0.430	107.42	0.443	2.93	0.0
Total (Fossil Fuel)	1,503.662	1,306.951	86.92	1,363.069	-4.12	70.8
E Generation from Non-Fossil Fuel
Generation from Renewable Sources (Including Hydro)
Wind	91.712	106.089	115.68	83.347	27.29	5.7
Solar	152.499	173.525	113.79	144.150	20.38	9.4
BioPower & Others	30.789	29.199	94.84	27.512	6.13	1.6
Total: Solar, Wind & Other Re	275.000	308.813	112.30	255.009	21.10	16.7
Hydro	155.674	167.163	107.38	148.634	12.47	9.1
Bhutan Import	9.472	7.813	82.48	5.484	42.46	0.4
Total RE Generation (Incl. Hydro)	440.146	483.789	109.92	409.127	18.25	26.2
Nuclear	56.592	55.181	97.51	56.681	-2.65	3.0
Total (Non-Fossil Fuel)	496.738	538.970	108.50	465.808	15.71	29.2
E Total Generation (Fossil Fuel & Non-Fossil Fuel)
Total Generation	2,000.400	1,845.921	92.28	1,828.877	0.93	100.0

Indian Solar Market

Solar energy has emerged as the primary driver of Indias clean energy transition. Capacity additions surged to approximately 44.6 GW in FY 2025-26, nearly double the 23.8 GW added the previous year, bringing cumulative installed solar capacity to 150.26 GW. This spans ground-mounted (114.87 GW), rooftop (25.73 GW), hybrid (3.86 GW), and off-grid systems (5.80 GW). India now ranks third globally in installed solar capacity (IRENA RE Statistics 2025). The market, valued at 122.5 GW in 2025, is projected to reach 348.57 GW by 2031 at a CAGR of 19.05% (Mordor Intelligence). Growth is underpinned by Indias 500 GW non-fossil fuel target, competitive auction tariffs now below the cost of coal-based power, and a rapidly scaling domestic manufacturing base in cells, wafers, and polysilicon -- progressively reducing import dependence that previously exceeded 90%. Demand is broadening beyond utility-scale projects, supported by declining levelised costs, rooftop subsidies, and open-access reforms. Developers are increasingly co-locating solar with storage to manage evening peak loads, while approaches such as canal-top installations and agrivoltaics are expanding the deployment frontier.

India Solar EPC and O&M Market

Indias domestic solar EPC and O&M market is currently estimated at approximately USD 6 billion and is expected to grow at a CAGR of around 6% over the same period, anchored by the countrys ambitious renewable energy targets and a substantial pipeline of utility-scale and distributed solar projects. The market remains structurally underpenetrated, with a limited pool of large, credible EPC contractors able to meet growing project requirements. This demand-supply gap presents a compelling opportunity for well-positioned players to capture disproportionate market share as India advances toward its 500 GW non-fossil energy target.

India Solar Manufacturing

Indias solar manufacturing sector scaled significantly in FY 2025-26. Approximately 119 GW of module and 9 GW of cell manufacturing capacity were added in CY 2025, bringing cumulative totals to 210 GW and 27 GW respectively. ALMM List I capacity for solar PV modules stood at 173.14 GW as of March 2026, while ALMM List II for solar cells had grown to nearly 30 GW. The PLI Scheme was a key catalyst, with beneficiaries commissioning approximately 11 GW of module and 5 GW of cell capacity during 2025. The India solar PV market is projected to grow from USD 9.5 billion in 2025 to USD 20.9 billion by 2032. The supporting policy framework - comprising PLI incentives, ALMM mandates, Basic Customs Duty on imported cells and modules, and Domestic Content Requirements - represents the most enabling regulatory environment for domestic solar manufacturing in Indias history, reflecting a deliberate push to reduce import dependence and build an integrated domestic supply chain. However, rapid capacity expansion has created structural overcapacity in the module segment,

The global BESS EPC market covering end-to-end engineering, procurement, and construction for battery storage infrastructure reached USD 10.72 billion in 2025 and is projected to hit USD 27.19 billion by 2030, growing at a 20.5% CAGR.

with ALMM List I capacity of 173.14 GW significantly exceeding annual domestic installation demand of approximately 44 GW. This dynamic favours manufacturers with technology differentiation, international certifications, and strong quality systems. Additionally, antidumping and countervailing duty investigations initiated by the United States in August 2025 have introduced near-term uncertainty for Indian exporters, prompting a strategic reorientation toward Europe, Southeast Asia, and the Middle East.

Battery Energy Storage Systems Market

BESS solutions capture energy from renewable sources for discharge during peak demand or supply shortfalls, enabling effective grid balancing. The global BESS market was valued at USD 32.62 billion in 2025 and is forecast to reach USD 161.12 billion by 2034, at a CAGR of 18.86%, driven by the accelerating shift toward low-emission energy, rising renewable penetration, and supportive policy environments. Asia Pacific leads the market, propelled by electrification and grid modernisation across India, Japan, South Korea, and Australia. In India, the market was valued at USD 1.54 billion in 2025 and is projected to reach USD 8.59 billion by 2031 at a CAGR of 33.2%. The Central Electricity Authority estimates India will require 47 GW or 236 GWh of BESS capacity by 2032 to sustain grid reliability. Deployment is accelerating sharply, with installed capacity expected to surge from approximately 507 MWh in 2025 to around 5 GWh in 2026 -- a near tenfold increase in a single year. The policy framework is comprehensive, encompassing a PLI scheme of INR 18,100 crore for domestic battery cell manufacturing, Viability Gap Funding covering up to 40% of project costs, and Energy Storage Obligations for utilities. Lithium-iron-phosphate battery prices falling below USD 100 per kWh are further improving cost competitiveness. Collectively, strong policy support, rapid renewable expansion, and improving project economics position Indias BESS market for growth that is expected to outpace the broader renewable energy sector.

BESS EPC INDUSTRY

The global BESS EPC market covering end-to-end engineering, procurement,andconstructionforbatterystorageinfrastructure reached USD 10.72 billion in 2025 and is projected to hit USD 27.19 billion by 2030, growing at a 20.5% CAGR. Growth is primarily driven by rising renewable energy adoption, which demands cost-competitive storage and grid stability solutions, along with growing investment in long-duration storage, grid ancillary services, EV charging infrastructure, and hybrid energy systems. In India, storage capacity is becoming central to the renewable energy push. Cumulative tendered storage capacity grew from 6.8 GW in 2018 to 90.7 GW in 2025, with standalone BESS making up 60% of capacity tendered that year. Of the 10.4 GW allocated in 2025, 2-hour configurations dominated, though 4-hour projects have gained traction since mid-2025 for evening peak demand. About 1.8 GWh of grid-scale BESS was commissioned as of March 2026, mostly in H2 FY26. Near-term risks include implementation delays of up to 18 months due to financial closure, procurement, and commissioning challenges, plus tariff viability concerns roughly 75% of allocated 2-hour capacity falls into higher-risk categories due to gaps between discovered tariffs and actual costs. While lithium-ion currently dominates, flow batteries and sodium-ion are expected to gain ground for specific use cases. Despite these headwinds, Indias BESS EPC outlook remains strong, backed by a deepening pipeline and the 500 GW non-fossil capacity target by 2030.

Government Initiatives

India is accelerating its clean energy transition through a suite of flagship programmes, including the National Green Hydrogen Mission, PM-KUSUM, and PM Surya Ghar: Muft Bijli Yojana, collectively aimed at scaling renewable capacity, expanding energy access for rural and farming communities, and reducing dependence on fossil fuels. Reflecting heightened ambition, India has set bold climate targets of a 45% reduction in emissions and 60% non-fossil power by 2035.

Rooftop Solar

Rooftop solar delivers a range of benefits spanning reduced household electricity bills, lower carbon emissions, decreased peak grid demand, and improved energy security. Advances in energy storage, digital monitoring, and decentralised grid infrastructure are expected to sustain rooftop PV growth, with emerging markets and energy-as-a-service models broadening adoption globally.

PM Surya Ghar: Muft Bijli Yojana has crossed 40 lakh beneficiary households within two years of launch and is on track to reach 75 lakh households by December 2026. The scheme targets installation of rooftop solar systems across one crore residential households by FY 2026-27, backed by a total outlay of INR 75,021 crore to promote distributed renewable energy adoption. Since its launch in February 2024, the programme has facilitated the addition of 12,357.84 MW of rooftop capacity, with 34,35,072 installations completed and INR 23,362.84 crore disbursed as Central Financial Assistance. Rooftop solar now constitutes nearly 45% of residential solar capacity, with deployment growth rising to 85% during 2024 to 2026.

At the state level, Gujarat leads with 5,78,324 total installations and an 85.6% conversion rate on applications, the highest efficiency among all states. Maharashtra follows with 4,71,509 installations, while Uttar Pradesh ranks third with 3,98,292 installations, continuing to scale in line with its large regional demand base. The government is targeting the addition of 30 GW of residential rooftop solar capacity by 2027, with an expected generation of 1,000 billion units of electricity and a reduction of 720 million tonnes of CO2 equivalent emissions over the 25-year lifetime of installed rooftop systems.

Strengthening Domestic Solar Manufacturing

The Union Budget for FY 2026-27 reduced Basic Customs Duty on Sodium Antimonate, used in the manufacture of solar glass, from 7.5% to nil, supporting cost reduction across the solar supply chain. The Approved List of Models and Manufacturers and Approved List of Cells and Modules frameworks, administered by MNRE, ensure that only quality-certified domestic manufacturers of solar modules, cells, ingots, and wafers are eligible for use in government and grid-connected projects. The framework is being progressively extended across the solar value chain, from modules under List I, to cells under List II, and further to ingots and wafers under List III, effective June 2028, with an objective of reducing import dependence and building a more resilient domestic manufacturing base. A reduction in GST on solar modules from 12% to 5% has further reduced project costs for developers.

PM KUSUM Scheme

The PM KUSUM scheme promotes solar energy adoption in agriculture, with the dual objective of enhancing farmer incomes and strengthening rural energy security. The scheme targets the addition of 34,800 MW of solar capacity by March 2026, supported by a central financial allocation of INR 34,422 crore. Implementation progress includes the installation of over 10 lakh standalone solar pumps and the solarisation of 13 lakh grid-connected agricultural pumps across the country.

IREDA Financing

The Indian Renewable Energy Development Agency has played a pivotal role in channelling capital into the sector. Cumulative loan sanctions reached INR 2,89,799 crore and cumulative disbursements stood at INR 1,91,030.21 crore as of 31 March 2026. During FY 2025-26, loan sanctions rose to INR 51,883 crore, reflecting 9% growth over the prior year, while disbursements increased by 16% to INR 34,946 crore. The outstanding loan book expanded by 22% to INR 93,075 crore as of March 2026, compared to INR 76,282 crore in FY 2024-25.

Solar Parks and Battery Storage Initiatives

The Government of India has approved 55 solar parks and Ultra Mega Renewable Energy Power Parks with an aggregate capacity of 41,137 MW. Of this, 13,054 MW has been commissioned, 15,181 MW is under construction, and 12,902 MW is under award or tendering as of March 2026. The Solar Park policy has been extended through FY 2029.

In parallel, under the Viability Gap Funding scheme supported by the Power System Development Fund, 30 GWh of BESS capacity is being promoted with an allocation of INR 5,400 crore. Supporting measures include an ISTS charge waiver for co-located BESS projects up to June 2028 for a period of 12 years, a minimum 20% local content requirement, and a minimum 2-hour storage duration requirement for solar-linked energy storage system projects.

Solar Village Initiative

The Model Solar Village initiative aims to develop one solar-powered village per district across India, with a total allocation of INR 800 crore and central assistance of INR 1 crore per selected village. The programme focuses on rooftop solar deployment, solar pump installation, solar street lighting, and community infrastructure solarisation, with the objective of making villages energy self-reliant. Implementation is carried out through state renewable energy agencies and district-level committees.

In Andhra Pradesh, six villages have been shortlisted under the initiative, with planned interventions spanning rooftop solar, solar street lighting, and solar-powered irrigation. In Telangana, the state is scaling the concept to one solar village per mandal, with 81 villages already under pilot implementation covering 38,216 households and the solarisation of 16,078 agricultural pumps.

New Solar Power Scheme Under PM JANMAN and DA JGUA

MNRE is implementing a dedicated solar scheme for tribal and Particularly Vulnerable Tribal Group habitations under the Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan and the Dharti Aabha Janjatiya Gram Utkarsh Abhiyan. The scheme provides off-grid solar solutions including Solar Home Lighting Systems and Solar Mini Grids to tribal households, multipurpose centres, and public institutions in areas where grid-connected electrification is not technically or economically feasible. As of 30 November 2025, a total of 4,919 households had been electrified under the scheme during 2025.

2. OPPORTUNITIES AND THREATS

2.1 Opportunities

Robust and Sustained Domestic Demand

Indias 500 GW non-fossil fuel target by 2030 requires approximately 160 GW of additional solar capacity over the next four years - a bar that FY 2025–26 has already demonstrated India can exceed, with a record 44 GW of solar added during the year. This is not cyclical demand - it is structurally mandated by climate commitments, energy security imperatives, and Indias industrial growth trajectory. For SWELECT, this translates into a sustained pipeline across every business vertical. SWELECTs integrated model means it participates in this demand wave at multiple points in the value chain simultaneously - a structural advantage that pure-play manufacturers or project developers cannot replicate.

BESS - Energy Storage in SWELECTs DNA

Battery Energy Storage Systems represent one of the most significant growth opportunities in Indias energy transition, and SWELECT brings a unique and deeply rooted credibility to this segment. The Companys origins as Numeric Power Systems - a pioneer in UPS and power electronics for over four decades - mean that energy storage is not a new capability acquired opportunistically, but a core competency that has been part of SWELECTs engineering heritage since inception. This foundation in power electronics, energy management, and storage technology gives SWELECT a distinct advantage as the market evolves from traditional UPS and backup power into grid-scale solar-plus-storage and round-the-clock renewable power systems. With a full BESS product range now available - spanning home, C&I, and utility-scale applications - backed by the operational 500 kW Wind-Solar-BESS pilot and decades of power electronics experience, SWELECT is positioned to serve this growing market with genuine technical depth.

ALMM, PLI, and Domestic Manufacturing Tailwinds

As at March 2026, ALMM List I (Solar PV Modules) stood at 173.14 GW of enlisted capacity, and ALMM List II (Solar PV Cells) had grown to nearly 30 GW. SHPVs full ALMM compliance, BIS certification, and comprehensive international accreditation portfolio place it among the highest-credentialed domestic module manufacturers - eligible for every government-mandated programme from PM-KUSUM to PM Surya Ghar to CPSU Scheme Phase-II to SECI tenders.

C&I and CBAM - Structural Demand Acceleration

The Carbon Border Adjustment Mechanism (CBAM), operative from January 2026 for key sectors including steel, aluminium, cement, and fertilisers, has created an immediate and time-sensitive business case for Indias export-oriented C&I sector to procure certified green power. SWELECTs IPP and EPC segments are directly positioned to serve this demand through group-captive structures, long-term PPAs, and RTC power backed by wind-solar-BESS hybrid configurations.

PM Surya Ghar Government Outlay

The Channels Division enters FY 2026–27 with the most comprehensive product portfolio. The addition of SPGS kits and BESS products to the channel offering transforms the Division from a product distributor into a solutions provider. PM Surya Ghar, targeting one crore residential rooftop installations with Rs. 75,021 Crore of government outlay, is creating a sustained wave of residential demand that SWELECTs channel network is positioning itself to capture, particularly in Tier 2 and Tier 3 markets.

Export Potential - Quality-Backed Market Access

SHPVs internationally certified product portfolio - IEC, UL, BIS, BEE, ROHS, and ongoing PVEL enrolment - creates a tangible export market opportunity in quality-driven markets. The 2 GW capacity expansion will provide the manufacturing scale needed for meaningful export volumes. SWELECT will opportunistically explore this market.

Indias 500 GW non-fossil fuel target by 2030 requires approximately 160 GW of additional solar capacity over the next four years - a bar that FY 2025–26 has already demonstrated India can exceed, with a record 44 GW of solar added during the year.

2.2 Threats

Geopolitical & Global Instability

Ongoing conflicts and US trade policy uncertainty are driving supply chain disruptions and input cost volatility across the sector.

Domestic Module Overcapacity

ALMM List I capacity of 173.14 GW against annual demand of ~44 GW is generating intense pricing pressure in non-DCR segments.

Policy & Regulatory Risk

Frequent changes in ALMM, net metering, open access, or BCD structures can disrupt planning and project economics.

Technology Obsolescence

Rapid advancement in solar technology demands continuous investment to stay competitive. SHPV addresses this with upward-compatible manufacturing lines, a TOPCon-first strategy aligned with the dominant technology cycle through 2028–2030, PVEL certification enrolment, and an expanding R&D programme.

Working Capital Intensity

Scaling manufacturing, EPC, and IPP operations simultaneously creates elevated working capital needs.

Human Resource Risk

Talent shortages and wage inflation across the sector threaten operational continuity.

3. SEGMENT_WISE AND PRODUCT_WISE PERFORMANCE AND OUTLOOK

SWELECT Energy Systems Limited operates under one business segment as defined under IND AS 108 - ‘Solar and other related activities.

3.1 Module Manufacturing (SHPV)

SWELECT HHV Solar Photovoltaics Private Limited (SHPV), a wholly-owned step-down subsidiary, delivered a strong performance in FY 2025–26, recording revenue of Rs. 45,538.93 Lakhs - a growth of 47% over Rs. 30,977 Lakhs reported in FY 2024–25. Operating from its Class 100,000 / ISO 8 cleanroom facility in Coimbatore spanning over 6 acres with a 1.30 Lakh sq. ft. built-up area, SHPV produced Mono PERC, TOPCon M10R, and TOPCon G12R modules ranging from 365 Wp to 620 Wp, with N-type TOPCon accounting for over 80% of production volume. The facility maintains a comprehensive certification portfolio including IEC 61215, IEC 61730, UL 1703, UL 61730, BIS, BEE, ALMM and ROHS, along with ISO 9001, ISO 14001, ISO 45001 and ISO 50001:2018 accreditations. During the year, SHPV launched its G12R Glass-to-Glass TOPCon module (132X, 620 Wp) in January 2026 - extending its product range to the current utility-scale power class benchmark - and continued enrolment in PVELs extended reliability certification programme, with completion expected in FY 2026–27. The 2 GW capacity expansion is progressing well and is expected to be commissioned by July 2026. 40-50% of the modules produced intended to be consumed by internal businesses mitigating the market risks. SWELECT has an assured supply of domesticly manufactured cells ensuring no supply chain disruption for its manufacturing.

3.2 EPC and O&M

The EPC and O&M segments delivered strong performance in FY 2025–26, contributing Rs. 23,380.53 Lakhs to consolidated revenue. Projects spanning rooftop installations to utility-scale ground-mount solar farms were executed across multiple states, with cumulative completed project delivery exceeding 300 MW. The operationalisation of the Delhi office extended SWELECTs execution footprint pan-India, with active plans to deepen presence across North India. The O&M business continued to grow alongside the expanding installed base. The Company remains committed to its 1 GW cumulative EPC target.

3.3 Independent Power Production (IPP)

SWELECTs IPP portfolio grew to 159 MW/195 MWp as at March 31, 2026 - up from 147 MW/181 MWp in the prior year - through the commissioning of 12 MW of new capacity across 3 projects. Energy sale revenues stood at Rs. 11,324.58 Lakhs, representing 17.23% of consolidated turnover. Currently the pipeline of more than 150 MW PPAs are being pursued and expected to be signed by Q1 of FY 26-27. The company is targeting to secure at least 500 MW PPAs by March 2027.

3.4 MMS and BOS Manufacturing

SWELECTs integrated MMS and BOS manufacturing facility near Salem, Tamil Nadu, delivered a significant capacity milestone in FY 2025–26, with installed annual capacity doubling from 500 MW to 1 GW. The facility produces MMS, Array Junction Boxes, String Combiner Boxes, DCDBs, ACDBs, and Servo Stabilisers, and remains audited and empanelled with multiple leading EPCs and developers. We are targeting the revenue under this category at Rs. 10,000 Lakhs.

3.5 Channels Division

The Channels Division has pan-India network of over 100 channel partners. Two significant developments broadened the Divisions proposition during the year: the launch of Solar Power Generation System (SPGS) kits for the residential and SME segments, and the introduction of BESS products through the channel network. Active participation in PM Surya Ghar deepened reach in Tier 2 and Tier 3 markets. The Division also extended its direct rooftop project execution capability to systems up to 500 kW. We intend to atleast double the channels revenue in FY 26-27.

3.6 BESS - Scaling on a Foundation of Heritage

Battery Energy Storage Systems represent SWELECTs most transformative growth vertical - and one where the Company competes with genuine depth rather than as a new entrant. SWELECTs origins as Numeric Power Systems, a four-decade pioneer in UPS and power electronics, mean that energy storage is embedded in the Companys engineering DNA. This heritage provides a foundation of technical credibility, customer trust, and product development capability that pure-play solar companies entering the BESS space cannot replicate. With a full product range now available across home, C&I, and utility-scale BESS applications - backed by the operational 500 kW Wind-Solar-BESS pilot - FY 2026–27 will focus on converting a growing pipeline into commercial contracts. SWELECTs combination of power electronics heritage, solar IPP capability, and a comprehensive BESS product range positions it to serve this market in a way few competitors can match - not as a new entrant, but as a company for whom energy storage has always been core business.

The global shift to renewable energy is creating structural demand for Battery Energy Storage Systems (BESS) to address intermittency and enable reliable, dispatchable power. Leveraging its established solar and power quality expertise, the Company is executing a focused, multi-segment BESS Approach to capitalise this growing opportunity.

Significant groundwork has been laid across all target segments.

In the Residential segment (up to 500 kWh), product configurations and application designs are ready, with BIS CRS certification compliance underway.

For Commercial & Industrial (C&I) applications (up to 10 MWh), pilot projects are underway - including deployments at the Companys own manufacturing facilities - validating peak load management, backup power, and energy cost optimization use cases.

At Utility scale (up to 100 MWh), the Company has entered major BESS and hybrid tenders in partnership with established OEMs.

Internationally, a joint venture initiative Fortify-SWELECT targeting the U.S. market is progressing, leveraging local project pipelines and regulatory frameworks.

Across all segments, supply chain partnerships have been secured through formal MoUs and agreements ongoing, ensuring component access, cost competitiveness, and execution readiness.

Indias 500 GW non-fossil fuel target by 2030 requires approximately 160 GW of additional solar capacity over the next four years - a bar that FY 2025–26 has already demonstrated India can exceed, with a record 44 GW of solar added during the year.

Market Signals near-term demand is strongest in C&I and facility segments. Residential adoption is emerging, tied to cost reduction and policy support. Utility-scale opportunities are expanding rapidly through government-led tenders.

Priorities for the Year Ahead from preparation to execution, with five clear priorities: commercial launch of residential and C&I offerings post-certification; scaling pilots into standardized, repeatable solutions; expanding utility-scale tender participation; operationalizing the U.S. joint venture; and strengthening engineering, procurement, and project delivery capabilities.

With product readiness and now pilots, partnerships, and market participation ongoing, the Company is well-positioned to establish a competitive, steady scalable presence in the BESS market.

Standalone Segment / Product Performance

Product Name	March 31, 2026	March 31, 2025
Solar Photovoltaic Panels	392.00	57.74
Solar Power Generating Systems and Accessories including Traded Goods	31,058.90	37,268.31
Solar Power	4,150.20	4,079.75
Wind Power	178.09	109.37
Sale of Services	1,072.57	800.00
Grand Total	36,851.76	42,315.17

Consolidated Segment / Product Performance

Product Name	March 31, 2026	March 31, 2025
Solar Photovoltaic Panels	29,170.59	22,260.37
Solar Power Generating Systems and Accessories including Traded Goods	23,684.46	28,314.25
Solar Power	11,146.49	10,189.92
Wind Power	178.09	109.37
Sale of Services	534.82	379.25
Grand Total	64,714.45	61,253.16

4. RISKS AND CONCERNS

SWELECT is well placed to capture opportunities from the expanding renewable energy sector; however, its business performance, project delivery, and long-term sustainability remain exposed to various risks. To address these challenges, the company maintains a structured framework of risk management and governance practices, ensuring ongoing evaluation and mitigation.

Risk Category	Description and Mitigation
Policy & Regulatory Risk	Frequent changes in ALMM, net metering, open access banking, or BCD structures disrupt planning. Mitigation: Proactive MNRE/NSEFI engagement, robust compliance monitoring, and regulatory change provisions in long-term contracts. Diversified revenue base reduces single-category concentration risk.
Geopolitical & Supply Chain Risk	Global conflicts and trade policy uncertainty create input cost volatility and logistics disruptions. Mitigation: SWELECT is structurally insulated against this through predominantly domestic revenue, long-term fixed-price PPA revenues from IPP operations, secured cell supply via structured long-term partnerships, and a diversified business model spanning manufacturing, EPC, IPP, BESS, and channels ensuring no single external shock can disrupt all revenue streams at once.
Domestic Overcapacity & Competitive Pressure Cell Supply Risk	ALMM List I capacity of 173.14 GW against 44 GW annual demand creates intense pricing competition in non-DCR segments. Mitigation: SHPV counters this by competing on quality, certification breadth, and compliance, delivering high-quality TOPCon modules at near-market pricing, while ALMM compliance secures eligibility for DCR schemes where competitive dynamics are structurally moderated. SHPV sources cells through structured long-term partnerships with established manufacturers, with supply continuity and pricing assured. Strategic buffer inventory provides an additional layer of supply assurance.
Technology Obsolescence	Rapid technology advancement creates obsolescence risk. Mitigation: Upward-compatible manufacturing lines, TOPCon-first strategy through 2028–2030, PVEL certification, and expanding R&D programme.
BESS Execution Risk	Entering BESS as a structured commercial vertical introduces technology and execution risks. Mitigation: Phased approach from operational 500 kW pilot, structured technology partnerships, and careful due diligence on battery supply. SWELECTs four-decade power electronics heritage provides a strong technical foundation.
Working Capital Risk	Scaling manufacturing, EPC, and IPP simultaneously elevates working capital needs. Mitigation: The Company has project finance for all its IPP Projects and currently working to complete the financial closure for IPP at the start of the execution reducing working capital requirements for construction. The company has also worked with the banks and optimised and enhanced its working capital lines. The company has also freed up the liens on its FD and Mutual Funds providing greater flexibility for investing equity for the new IPP projects to meet its IPP targets.
Human Resource Risk	Talent shortages and wage inflation pose execution risk. Mitigation: SESL has a committed work force with an average tenure being 11+ years. SHPV mitigates this through localised hiring, structured in-house training, campus recruitment partnerships, and retention programmes, including a womens workforce initiative targeting growth from 31% to 50%, which expands the hiring pool and builds a more stable workforce.

5. RISK MANAGEMENT COMMITTEE

Though SWELECT Energy Systems Limited is not categorised under Regulation 21(5) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has voluntarily established a Risk Management Committee. This committee is tasked with continuously monitoring business and operational risks through an efficient risk management system.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company maintains an Internal Control System commensurate with the size, scale, and complexity of its operations. Management clearly defines the scope and authority of the Internal Audit function.

The internal audit report for every quarter ended are being submitted to the Audit Committee of the Board by the Internal Auditors.

These reports assess the efficacy and adequacy of the internal control system within the Company, ensuring compliance with operating systems, accounting procedures and policies at all locations. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board. Based on the findings of the internal auditors, the Audit Committee/Management takes corrective actions in respective areas, thereby strengthening the controls.

7. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Standalone Performance

During the year under review, the Company registered a turnover of Rs.37,613.21 Lakhs, as compared to Rs.43,134.11 Lakhs in the previous year, reflecting a decline of 12.80% on a year-on-year basis.

However, the Company demonstrated a significant improvement in profitability, recording a Net Profit of Rs.1,956.40 Lakhs during the year as against Rs.857.66 Lakhs in the previous year, representing a robust growth of 128.11% over the preceding year. This was largely driven by focused cost control, leaner operations and improved business efficiencies during the year.

The Basic Earnings Per Share (EPS) stood at Rs.12.91 and the Diluted EPS stood at Rs.12.89 reflecting the companys strong earnings potential and financial health.

Consolidated Performance

For the financial year under consideration, the Company reported a turnover of Rs.65,712.33 Lakhs as against Rs.62,167.11 Lakhs in the preceding year, posting a growth of 5.70% on a year-on-year basis. On the profitability front, the Company recorded a Net Profit of Rs.5,758.31 Lakhs for the year under consideration as against Rs.1,397.80 Lakhs in the preceding year, reflecting a substantial increase of 311.96% over the previous year. This strong performance reflects the combined efforts of the Group towards better resource utilisation, cost efficiency and sound business practices across operations. The Basic EPS stood at Rs.36.40 and the Diluted EPS stood at Rs.36.36 suggesting enhanced shareholder value on a consolidated level.

Financial Highlights - Ten Years (Standalone)

S. No Particulars	2016-17	2017-18	2018-19	2019-20	2020-21	2021-22 ###	2022-23	2023-24#	2024-25	2025-26
1 Revenue from operations	17,006.97	17,382.92	11,984.43	14,204.04	18,453.22	22456.33	22,891.46	24,882.21	43,134.11	37,613.21
2 Other Income	4,615.85	3,807.93	3,494.58	3,170.98	3,279.04	3,051.75	3,211.47	4,471.65	5,143.02	3,541.05
3 Total income from operations	21,622.82	21,190.85	15,479.01	17,375.02	21,732.26	25508.08	26,102.93	29,353.86	48,277.13	41,154.26
4 Employee Cost	1,151.30	1,140.03	1,264.19	1,194.66	1,217.53	1185.40	1,319.79	1500.10	1,933.50	2,744.84
5 Excise Duty	44.97	8.50	-	-	-	-	-	-	-	-
6 Other Operating Expenditure	14,941.83	15,031.85	10,544.70	12,484.42	14,595.67	16162.39	17,560.29	19,481.89	37,894.27	30,413.00
7 Profit Before Finance cost, Depreciation and Amortisation and Tax	5,484.72	5,010.47	3,670.12	3,695.94	5,919.06	8160.29	7222.85	8,371.87	8,449.36	7,996.42
8 Finance cost	529.55	580.58	744.63	981.15	1,249.12	1852.59	2,532.00	3,375.83	3,278.88	3,177.23
9 Depreciation and amortization	1,114.44	1,343.04	1,415.41	1,659.43	1,547.79	1353.16	1386.93	1500.90	1,528.39	1,675.73
10 Profit before exceptional items and tax	3,840.73	3,086.85	1,540.08	1,055.36	3,122.15	4954.54	3303.92	3,495.14	3,642.09	3,143.46
11 Exceptional items	-	-	-	-	-	-	-	##1684.79	-	190.88^
12 Profit/(Loss) before tax	3,840.73	3,086.85	1,540.08	1,055.36	3,122.15	4954.54	3303.92	5179.93	3,642.09	2,952.58
13 Profit/(Loss) after tax	2,937.85	2,346.93	1,105.35	(1,673.16)	2,431.15	4954.54	3265.15	5,174.22	857.66	1,956.40
14 Net (loss) from discontinued operations	-	-	-	-	-	(1575.47)	(2330.73)	-	-	-
15 Net Profit for the year	2,937.85	2,346.93	1,105.35	(1,673.16)	2,431.15	3,379.07	934.42	5,174.22	857.66	1,956.40
16 Basic EPS (Rs.)	29.07	23.22	7.29	(11.04)	16.04	22.29	6.16	34.13	5.66	12.91
17 Interim Dividend paid Rs. ( per share)	-	-	-	1.25	-	-	-	-	-	-
18 Dividend paid / proposed (Rs. per share)	4.00	4.00	2.50	0.75	3.00	3.00	1.20	4.00	3.00	*3.50

#The figures from the year 2023-24 include the impact of merger of SWELECT Solar Energy Private Limited and KJ Solar Systems Private Limited with SWELECT Energy Systems Limited.

## Gain on Sale of investment/fair value of investment in subsidiary

### The figures for the year 2021-22 have been revised due to discontinuance of module manufacturing business.

^ Includes the amount post adjustment of Exceptional Items as mentioned under Note no. 31 of the standalone financial statements *Proposed (Final dividend of Rs. 3.50/- per share)

8. SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

The details of significant changes in key financial ratios for the year are comprehensively detailed in the Note No.41 (Standalone) of the Financial Statements. This note provides a thorough explanation for each change to help stakeholders better understand the financial dynamics of the year.

9. DETAILS OF CHANGE IN RETURN ON NET WORTH

Details of the change in Return on Net Worth are given in the Note No. 41 (Standalone) of the Financial Statements.

10. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

Human Resources

SWELECT, as a group has over 730 personnel including on-roll, contractual staff and consultants. As of March 31, 2026, the company as a group has over 462 permanent employees. FY 2025–26 was a year of workforce strengthening, aligned with the Companys new leadership and growth ambitions. At SHPV, a structured diversity initiative drove meaningful progress on womens representation in core manufacturing roles - with women comprising around 31% of the production workforce as at March 2026, against a near-term target of 50%. This initiative reflects SHPVs commitment to building an inclusive, skilled, and future-ready manufacturing workforce.

The Company continues to invest in people development through structured training programmes, upskilling initiatives, and certification-based learning. Motivation and engagement are fostered through performance rewards, monthly and annual recognition programmes, and team-building activities.

Welfare / Social Activities

The Company sponsors various social welfare activities to enhance internal team-building cohesion. The "SWEES EMPLOYEES WELFARE TRUST" continues to focus on employee welfare. Additionally, the Company maintains its Corporate Social Responsibility commitments under the Companies Act, 2013.

CAUTIONARY STATEMENT

Certain statements in this Management Discussion and Analysis describing the Companys future projections are "Forward-Looking Statements" under applicable laws and regulations. Actual results could differ materially from those projected due to economic conditions affecting demand/supply and pricing in domestic and international markets, changes in government regulations, tax laws, geopolitical developments, and other incidental factors.

		For and on behalf of the Board of Directors
	Sd/-	Sd/-
	ARULKUMAR PUDUR	R. CHELLAPPAN
	SHANMUGASUNDARAM
Place: Chennai	CEO and Managing Director	Whole-time Director and Vice Chairman
Date: 21 May 2026	DIN: 08371976	DIN: 00016958