CRISIL Ratings in its latest report has said that the implementation of the Approved List of Models and Manufacturers (ALMM) from April 1, 2024, is expected to help keep operating margins of domestic module makers strong at 12-14 per cent in next fiscal (FY25), in line with the level likely this fiscal. This will be mostly driven by healthy domestic and export demand.
According to the report, this fiscal (FY24), profitability is expected to almost double over the previous fiscal as rising share of exports, which fetch a 15-20 per cent premium over domestic prices, will more than offset the surge in imports in the absence of ALMM.
The report further said higher sales volumes (both domestic and exports) and healthy margins will lead to robust accruals for module makers rated by CRISIL Ratings in the current and next fiscals. This will support capital expenditure for capacity expansion and technology upgrade and sustain healthy credit profiles. That said, any further extension in the ALMM implementation would be a risk to the estimates. Also, any change in the US policy towards imports from China, will remain monitorable.
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