Why Did Vikram Solar Stock Crash 11% Despite 496% YoY Increase in Net Profit?

Synopsis: Shares of Vikram Solar dropped 11% as investors focused on sequential declines in revenue and profits, despite strong year-on-year growth, with labour law-related costs weighing on quarterly performance.

The shares of this company, which is engaged in providing full solar project lifecycle support, from module supply and EPC services to long-term O&M, serving utility, commercial, and residential sectors, are in focus after announcing Q3 earnings.

With a market capitalization of Rs 7,300 crore, Vikram Solar Ltd’s shares on Wednesday made a day low of Rs 191 per share, down by 11.1 percent from its previous day’s close price of Rs 214.9 per share. The stock has given a negative return of 43.55 percent since its listing.

What happened

The stock fell as quarterly earnings declined sequentially, with profit after tax impacted by labour law-related expenses of Rs. 5.60 Crore, dampening investor sentiment despite ongoing business operations and a recent capex of Rs 4,371 crore for entry into BESS, through its subsidiary VSL Powerhive.

QoQ results

The revenue from operations declined by 0.36  percent to Rs 1,106 crore in Q3 FY26, corresponding to the last quarter in the same financial year. EBDIT declined by 12.76 percent to Rs 205 crore in Q3 FY26 from Rs 235 crore in Q2 FY26. Accompanied by a net profit decline of 23.2 percent to Rs 98.2 crore in Q3 FY26, resulting in an EPS decline of 23.6 percent QoQ to Rs 2.71 per share.

YoY 

The revenue from operations grew by 8 percent to Rs 1,106 crore in Q3 FY26, corresponding to the same quarter in the last financial year. EBDIT grew by 142 percent to Rs 205 crore in Q3 FY26 from Rs 84.7 crore in Q3 FY25. Accompanied by Net profit growth of 436 percent to Rs 98.2 crore in Q3 FY26(includes exceptional item of 5.62 crore), resulting in an EPS growth of 352 percent to Rs 2.71 per share.

As of December 31, 2025, the company’s order book stood at 10.6 GW, with a strong domestic focus, accounting for 84 percent of total orders, while exports contributed the remaining 16 percent. 

Customer-wise, 55 percent of the order book came from independent power producers, followed by 21 percent from commercial and industrial clients, 13 percent from distribution companies, 6 percent from government projects, and 5 percent from EPC players.

The company commenced operations at its 5 GW module plant in Vallam, raising total manufacturing capacity to 9.5 GW as of December 31, 2025, and launched Hypersol Pro, an advanced N-Type solar PV module offering 23.69% efficiency, superior low-light performance, and higher energy yield.

India Ratings upgraded the company’s bank facilities, raising the long-term rating from IND A Stable to IND A+ Stable and the short-term rating from IND A1 to IND A1+, reflecting a stronger credit profile and enhanced financial strength.

About the Company

Incorporated in 2005, Vikram Solar Ltd is a leading Indian solar energy solutions provider, manufacturing high-efficiency PV modules and offering end-to-end EPC (Engineering, Procurement, Construction) and O&M (Operations & Maintenance) services for solar projects globally, recognised as a top Tier 1 module manufacturer.

The company is valued attractively, trading at a P/E of 15.8x below the industry average, supported by healthy return ratios with ROE of 16.6 percent and ROCE of 26.4 percent, while a low PEG of 0.26 indicates a favourable growth-adjusted valuation.

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