Solar Rooftop Firm SolarSquare Records Rs 175 crore Topline In Fy24

Rooftop solar solutions provider SolarSquare recorded a 63.5% year-on-year growth in its operating scale, reaching Rs 175 crore in revenue in the last fiscal year. However, this growth came at a high cost, as the company’s losses surged 2.3X in FY24.

SolarSquare’s revenue from operations grew to Rs 175 crore in FY24 from Rs 107 crore in FY23, according to its financial statements sourced from the Registrar of Companies (RoC).

Founded by Neeraj Jain and Nikhil Nahar, SolarSquare designs, installs, and finances rooftop solar systems for homes. It also provides rooftop solar solutions for housing societies and commercial establishments. It is easily the largest firm focused on the home sector by installations now. 

SolarSquare makes money from product sales and services. In FY24, revenue from product sales, which constituted the majority of its operating revenue, surged by 66.35% to Rs 173 crore. In contrast, collection from services declined by 33.33% YoY to Rs 2 crore.

The company earned an additional Rs 3 crore from interest on deposits and gains on current investments, pushing its total income to Rs 178 crore in FY24, up from Rs 108 crore in FY23.

On the expense front, material costs remained the largest component, increasing by 52.27% to Rs 134 crore in FY24. Employee benefit expenses more than doubled, surging 105.56% to Rs 37 crore. Finance and rental costs collectively amounted to Rs 8 crore, while other expenses, including operational overheads, added Rs 50 crore in the last fiscal year.

Outpacing its revenue growth, the company’s total expenses surged by 65.94%, reaching Rs 229 crore in FY24 from Rs 138 crore in FY23.

Ultimately, SolarSquare’s losses surged 2.3X to Rs 69 crore in FY24. Its Return on Capital Employed (ROCE) stood at -112.85%, while its EBITDA margin was -35.96% for the fiscal year ending March 2024. On a unit level, the firm spent Rs 1.31 to earn one rupee in FY24.

SolarSquare reported current assets worth Rs 120.5 crore in FY24 which includes Rs 60 crore in cash and bank balance. According to startup data intelligence platform TheKredible, SolarSquare has raised a total of $56 million of funding till date. Its lead investors include Elevation Capital, Lowercarbon Capital and Good Capital, among others.

With a huge focus from the government on solar rooftops in the residential segment through the PM Suryaghar scheme, which offers up to 40% subsidies on solar rooftops, SolarSquare has a massive market opportunity to exploit over the coming two years. However, the firm, even as it gets high ratings for the quality of its work and after sales support, does have a relatively high cost structure to deliver these, leading to higher losses than peers, which include the division of Tata Power engaged in the business as well. As one of the few well funded firms in the retail solar installation space, it enjoys an advantage over peers that it hasn’t yet exploited as well as it should. For all its losses, it remains one of the priciest solar installers out there in a market that like most Indian markets, is value conscious, to say the least. 

Perhaps it is the inexperience with scaling up, but one would certainly expect a vastly improved show in FY25 from the firm, considering its leading position as an installer in the PM Suryaghar Scheme.

 

By Arrangement with Entrackr