GH2 Solar Limited

GH2 Solar Limited — the business model In one line: they build solar plants, and they resell solar equipment. "Green hydrogen" is in the name and logo but is close to zero in the accounts. Where the revenue comes from (FY26, standalone) Business line FY26 Share FY25 Sale of traded goods (equipment resale) ₹309.0 cr 50.4% ₹163.1 cr EPC services (engineering, procurement, construction) ₹254.0 cr 41.5% ₹12.4 cr Project management & consultancy (incl. success fees) ₹49.1 cr 8.0% ₹31.4 cr Sale of electricity ₹0.39 cr 0.1% — Operation & maintenance ₹0.11 cr — — Total revenue ₹612.6 cr ₹206.9 cr Revenue up 196%. Profit after tax rose from ₹14.6 cr to ₹51.2 cr, up 250%. EPS went from ₹8.67 to ₹26.64. Note what changed in the mix: EPC was 6% of revenue last year and is 41.5% now. That's the real story — the company shifted from mostly reselling equipment to actually building projects. The core economics — two different businesses in one company Trading: sold ₹309.0 cr, bought it for ₹297.0 cr. Gross margin 3.9%. EPC and consultancy: ₹303.2 cr of revenue against ₹224.1 cr of construction cost. Gross margin 26.1%. So half the revenue runs at 4% and half runs at 26%. Essentially all the profit comes from EPC and consultancy; trading contributes scale, customer access and purchasing leverage, not earnings. Overall net margin is 8.35% — a normal contractor's number. Two things that need attention Profit isn't converting to cash. Against ₹51.2 cr of net profit, operating cash flow was negative ₹4.1 cr (FY25: negative ₹19.7 cr). Closing cash was ₹0.31 cr. The money is tied up in trade receivables of ₹115.1 cr plus unbilled revenue of ₹26.7 cr — together about 84 days of revenue. Trade payables are only around ₹9.6 cr, meaning GH2 is financing its customers rather than the other way round. This is funded by short-term borrowings of ₹75.7 cr and fresh equity of ₹54.2 cr raised during the year. Finance costs rose from ₹2.0 cr to ₹10.0 cr as a result. Customer concentration. The notes disclose that four customers accounted for ₹360.5 cr, or 59% of revenue (FY25: three customers, 70%). The SPV structure is where the strategy sits Thirteen subsidiaries and two associates. Incorporated during the year: Clean Power Generation IN-4 and IN-5, GH2 Solar SPV-3, 4 and 5, and Greenovate Hydrogen India. After year-end, SPV-6 through SPV-9. This is the setup for moving from contractor to asset owner — building plants, holding them in SPVs, and selling electricity. The ₹0.39 cr "sale of electricity" line appearing for the first time is the beginning of that. The parent has put ₹19.7 cr of investment and ₹30.5 cr of loans into these entities. Worth noticing: consolidated revenue is lower than standalone (₹578.2 cr vs ₹612.6 cr), and consolidated profit is lower too (₹46.6 cr vs ₹51.2 cr). That means the parent is selling into its own subsidiaries, and those sales get eliminated on consolidation. Smaller points Green hydrogen is positioning, not yet a business. It doesn't appear as a revenue line. Nil export earnings against ₹11.1 cr of forex outgo — domestic revenue, imported supply chain. Auditor S S Kothari Mehta & Co. LLP, clean opinion. The CARO annexure does note the company is not regular in depositing statutory dues, with a small TDS amount outstanding beyond six months. Converted from private to public limited in September 2024. FY26 is its first year reporting under Ind AS.