Solex Energy Limited

Technology — Solar · NSE

₹624.00−₹8.55 (−1.35%)

DalalBaazaar Score

67 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by moderate debt load, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

The 60-second version of Solex Energy Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Solex Energy Limited manufactures and sells solar photovoltaic modules in India.

IndustrySolar

SectorTechnology

Employees1,400

Annual revenue₹1,618 Cr

How does it make money?

Turns over ₹1,618 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 1,400 employees supports ₹1.16 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.16 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 30.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE32.0%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +901% while net margin moved +254% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+901%

Margin effect+254%

DalalBaazaar Score

67/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of -0.36 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

67/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

86/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

8.4x

3Y Median

108.4x

40 monthly readings · mean 142.1x · range 7.0x–575.3x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 92% below its 3y median of 108.4x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 49% below the peer median of 16.5x.

vs. its own history

Cheap

108.4x median over 40 months · -92%

vs. sector peers

Cheap

16.5x median of 4 peers · -49%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.2x

PEG

0.04

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 8.1% to 11.2% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 7.2% to 37.9%.
Return on capital is rising
ROCE has improved from 9.9% to 30.5%.
High return on capital employed
ROCE of 30.5% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 414% over 3 years, from ₹66 Cr to ₹339 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 1079% against revenue up 901% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 30.5% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 8.1% to 11.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 92% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 49% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 1079% against revenue up 901%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 87% a year✓ 115.5% CAGR
Latest reported year was 0.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 11.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹7 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 27%✓ 30.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹674 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.4x

Cheap

Cheap against the generic band

P/B Ratio

2.66x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹73.9

Profitable

Profitable on a per-share basis

ROE

37.9%

Strong

Strong capital efficiency

ROCE

30.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.32x

Moderate

Moderate leverage

Revenue Growth (YoY)

0.5%

Modest

Modest growth

Profit Growth (YoY)

-67.0%

Falling

Profits are shrinking

Dividend Yield

0.09%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹7 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

7.2%

Average

Average margins

Net Margin

4.9%

Average

Average bottom-line conversion

Current Ratio

1.23

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.36

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

674.4 / 736.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

20.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹162 Cr	₹366 Cr	₹662 Cr	₹1,618 Cr	+115.5%
EBITDA	₹13 Cr	₹28 Cr	₹78 Cr	₹181 Cr	+140.4%
EBITDA Margin	8.1%	7.8%	11.8%	11.2%	—
PAT (Net Profit)	₹3 Cr	₹9 Cr	₹41 Cr	₹96 Cr	+228.4%
EPS	₹2.71	₹10.92	₹39.98	₹88.88	+220.0%
ROE	7.2%	18.9%	26.3%	37.9%	—
ROCE	9.9%	20.5%	26.8%	30.5%	—
Total Debt	₹66 Cr	₹96 Cr	₹174 Cr	₹339 Cr	+72.5%
Free Cash Flow	-₹41 Cr	-₹6 Cr	-₹107 Cr	₹7 Cr	—

🟢 Revenue has grown at 115.5% a year over 3 years.

🟢 EBITDA has grown at 140.4% a year over 3 years.

🟢 EBITDA Margin has risen from 8.1% to 11.2% over 3 years (+3.1 pts).

🟢 PAT (Net Profit) has grown at 228.4% a year over 3 years.

🟢 EPS has grown at 220.0% a year over 3 years.

🟢 ROE has risen from 7.2% to 37.9% over 3 years (+30.7 pts).

🟢 ROCE has risen from 9.9% to 30.5% over 3 years (+20.6 pts).

🔴 Total Debt has grown at 72.5% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹41 Cr to ₹7 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,181 Cr

Total Liabilities

₹925 Cr

Cash & Equivalents

₹76 Cr

Operating Cash Flow

₹201 Cr

Capex

-₹194 Cr

Corporate Actions

Dividend Rate

₹0.55

Ex-Dividend Date

15 Sept 2026

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

1 positive2 mixed1 negative2 general

Is Now The Time To Put Solex Energy (NSE:SOLEX) On Your Watchlist?

Simply Wall Street, 24 Sept

Solex Energy Share Price Near 52-Week Low, Valuation View

Univest, 12 Oct

Rs 3,400 Crore Order Book: This Solar Stock Reports Q1 FY27 Results; PAT Declines 67% as Share Price Falls 10%

Dalal Street Investment Journal, 17 AugOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Solex Energy Q1 profit falls 66 per cent to Rs 8.26 crore

Telangana Today, 17 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Solex Energy shares jump over 13% on strong FY28 revenue growth target; stock up 9% in five sessions

Upstox, 23 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Solex Energy Secures ₹74.77 Crore Solar Orders; Shares Rise 2.12%

HDFC Sky, 03 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongGrowth · Profitability · Valuation

MiddlingBusiness Quality · Financial Health

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑