Websol Energy System tumbles after weak Q1 performance

25 Aug 2022 , 03:23 PM

Revenue from operations dropped to Rs 3.24 crore in the first quarter from Rs 43.02 crore recorded in the same period last year. Sohan Lal Agarwal, chairman and managing director, said: ?The decline was the result of the company deciding to scrap the existing technology, replace the legacy equipment with absolutely contemporary and cutting-edge alternatives. This replacement process is expected to take six months during which time the management has selected to voluntarily absorb quarterly losses arising out of no production. However, I wish to assure our stakeholders that this voluntary loss is helping to create a robust foundation on which the company is being rebuilt. Besides, this loss is expected to be a fraction of the multi-year revenue potential at enhanced margins that should transpire from the last quarter of the current financial year. Websol Energy System is making an unprecedented investment in ramping its solar cell and module plant seven-fold to 1.8 GW capacity. This investment is expected to help the company retain its position among the largest manufacturers of solar photovoltaic cells and modules in India, one of the fastest growing renewable energy markets in the world. The chairman said: ?The big development at our company is that the Company readied for a decisive leap during the first quarter for FY 2022-2023 to capitalise on a structural shift in Indias renewable energy sector. The decision has been courageous not only for the sharp increase in scale, which is expected to graduate the company into a different level, but also because the increase in capacity will be accompanied by a change in technology from the conventional multi-crystalline to the high efficiency Mono PERC and TOPCON technologies.? The company is commissioning the new production lines with the latest international technologies. The Government has extended support and the company has taken necessary steps to enhance production capacity. I wish to assure our shareholders that this short-term sacrifice was necessary for a long-term competitiveness that will make it possible for our company to compete with aggressive Chinese production starting from the last quarter of the current financial year. Once our two-phased expansion has been completed, we will be able to generate superior economies of scale and technology, translating into enhanced stakeholder value.? To finance this seven-fold capacity growth, the company announced a preferential allotment of equity shares to a Promoter Group and strategic or financial investor. The company has been approached by various renewable power distribution companies to buy a substantial part of our enhanced capacity across the years. This provides the company with attractive revenue and profit visibility, managing director added. Websol Energy System is a Kolkata-based manufacturer of solar cells and modules.Powered by Capital Market – Live News