Fujiyama Power Systems Ltd. (Neutral)

Highlights

Fujiyama Power Systems Limited (FPSL) incorporated in 2017, is engaged in the business of manufacturing and solution provider in the rooftop solar industry. The company offers a wide range of products including solar panels, inverters (on-grid, off-grid, and hybrid), and both lead-acid and lithium-ion batteries.

FPSL is primarily a B2C company, and they sell products through their expansive network of distributors, who further sell to dealers and franchisees. Though their distribution is majorly through dealers and franchisees, their distributors directly supply to industrial/commercial customers for large orders

As of Q1FY26, the company has built a trusted reputation through its different brands, supported by an extensive distribution network of 725+ distributors, 5,546 dealers, and 1,100 exclusive franchise stores.

FPSL operates 4 strategically located manufacturing facilities with proximity to ports and airports in Greater Noida, Parwanoo, Bawal and Dadri with capacities as follows 1,039 MW of solar panel, 1,743 MW of solar inverters and electronics, 1,318 MW in Lead-acid batteries and 545 MW in Lithium-Ion batteries.

Out of the total proceeds from the offer, ~Rs. 1,800 mn would go towards capex, ~Rs. 2,750 mn would go towards debt repayment and ~Rs. 1,450 mn would go towards general corporate purposes. While ~Rs. 2,280 mn would go towards existing selling shareholders of the company.

Key Highlights

• In India’s energy outlook, the solar sector is set to become the dominant source of power by FY32, with its share projected to rise from 22 pct in FY25 to 40 pct with capacity rising from 106 GW to 365 GW rooftop solar is expected to grow at a projected CAGR of 42 pct from FY25 to FY30, reaching almost 100 GW.
• In addition to exiting capacity, the company plans to expand its current production capacities by 2,600 MW in solar panel, 2,000 MW in solar inverters and electronics and 2,000 MW in Lithium-ion batteries by FY26. Company also plans to add 1,000 MW on solar cell production capacity.
• PFSL products are certified to meet the quality and performance standard prescribed by the MNRE and the BIS and SNAs. These certifications are crucial because, not only certified products are eligible for government tenders and projects and are mandatory for subsidies or incentives under renewable energy schemes like rooftop solar programs, but they also reassure customers of product reliability and performance, boosting brand credibility and providing a competitive advantage in the market.
• PFSL balanced portfolio, combined with tailored power solutions for the telecom sector, reduces dependency on any single product category, ensuring resilience against market fluctuations and steady revenue growth, diversified supplier network avoids over-reliance on a single supplier and their ability to produce critical components in-house, such as SMT line for printed circuit board production.
• The company’s core strategies include (i) Expanding the manufacturing base for solar panels, inverters and batteries and strengthen back-end integration in solar panels (ii) Further strengthening domestic distribution and retail network and increase export sales. (iii) Address market opportunities with a focus on continuously developing more efficient products and using innovative marketing tools and sales strategies, such as actionable influence.
• Sales of the company has grown by 52.3 pct CAGR in over FY23-25 and EBITDA and Profit grew by 119.5 pct CAGR and 153.3 pct CAGR over same period. During FY25 the sales of the company jumped by 66.6 pct YoY to Rs. 15,407 mn. While EBITDA of the company grew by 152 pct YoY to Rs. 2,485 mn and EBITDA margin expanded by 157 bps to 16.1 pct YoY in FY25. During FY25, the company reported profit of Rs. 1,563 mn, which grew 245 pct YoY.

Key Risk

• Restrictions on or import duties relating to materials and equipment imported for its manufacturing operations as well as restrictions on or import duties levied on its products in its export markets may adversely affect company’s business
• Geographical concentration of its manufacturing facilities in northern India exposes the company to region-specific risks that could adversely affect its business.
• Any adverse change in the demand of their products in Uttar Pradesh or failure to expand into new markets may have an adverse impact on business and growth.

Financial Performance

Peer Comparison based on FY26 Financials

Valuation

Fujiyama Power Systems is a manufacturer of products and solution provider in the roof-top solar industry, including on-grid, off-grid and hybrid solar systems. The Company strives to excel in solar panel manufacturing, solar inverter manufacturing (covering on-grid, hybrid, and off-grid solutions), and both lead acid and lithium-ion battery production. At the upper end of the price of Rs. 228, the issue quotes PE of 25.8x on FY26 annualized earnings. The issue looks fully priced.

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