Vikram Solar

Strengths:

1. Robust Manufacturing Capacity and Market Presence: Vikram Solar is among India's largest solar PV module manufacturers, with a cumulative production capacity of 2.5 GW. The company has a significant domestic footprint and has supplied modules to customers in 32 countries, including the United States, Germany, and China, demonstrating its global reach.

2. Diverse Product Portfolio with High Efficiency: The company offers a wide range of solar panels, with power outputs ranging from 340W to 715W and efficiencies between 20.2% and 23%. This versatility caters to various project requirements, from residential installations to large-scale commercial ventures.

3. Recognition for Product Quality and Innovation: Vikram Solar has been acknowledged as a top performer in reliability testing by PV Evolution Labs (PVEL) in multiple years and is listed as a Tier 1 manufacturer by Bloomberg New Energy Finance (BNEF). These accolades reflect the company's commitment to quality and innovation in the solar industry.

4. Strategic Expansion and Technological Advancement: The company is pursuing vertical integration by establishing a 3 GW solar cell manufacturing facility in Tamil Nadu and plans to set up a 3 GW manufacturing facility in the United States. Additionally, Vikram Solar has introduced advanced technologies such as n-type monocrystalline cell modules and heterojunction (HJT) PV modules, positioning itself at the forefront of solar innovation.

Weaknesses:

1. Moderate Financial Risk Profile: Despite a healthy net worth, Vikram Solar exhibits moderate financial risk, characterized by a Debt-to-Equity ratio of 1.50 as of March 31, 2022. The Interest Coverage Ratio (ICR) and Debt Service Coverage Ratio (DSCR) are relatively weak, indicating potential challenges in meeting debt obligations.

2. Working Capital Intensity: The company's operations are working capital-intensive, with high Gross Current Assets (GCA) and extended debtor periods. While inventory levels are manageable, effective working capital management remains crucial for sustaining operational efficiency.

3. Limited Global Presence and Accessibility: Although Vikram Solar has a growing international footprint, its primary focus remains on the Indian market. This limited global presence may affect accessibility for customers in certain regions, potentially hindering international market penetration.

4. Shorter Product Warranty Period: The company offers a 12-year product warranty on its solar panels, which is shorter than the 15 to 25-year warranties provided by some leading competitors. This may influence customer preference when comparing warranty terms