SolarSquare, a leading rooftop solar solutions provider, faced significant financial losses in the fiscal year 2024 (FY24). Due to rising expenses, the company’s losses increased by 2.3 times to Rs 69 crore. While its revenue showed notable growth, the rising costs of operations, materials, and employee salaries heavily impacted its overall financial performance.
One of the primary reasons behind SolarSquare’s increasing losses is its soaring expenses. The company reported a 65.94% rise in expenses, reaching Rs 229 crore in FY24. The largest portion of this expenditure came from material costs, which grew by 52.27% to Rs 134 crore. Employee salaries also more than doubled, reaching Rs 37 crore. In addition, finance and rental costs were recorded at Rs 8 crore, while other operational overheads added another Rs 50 crore to the overall spending.
Due to these high costs, SolarSquare’s Return on Capital Employed (ROCE) stood at (-)112.85%, reflecting a sharp decline in profitability. Similarly, the company’s EBITDA margin dropped to (-)35.96%. Reports indicate that SolarSquare spent Rs 1.31 to earn every rupee, highlighting its ongoing financial struggles.
Revenue Growth Despite Losses
Despite the rising expenses, SolarSquare’s revenue witnessed a positive trend. The company’s operating revenue increased by 63.5% year-on-year (YoY), reaching Rs 175 crore in FY24, compared to Rs 107 crore in FY23. Most of this revenue came from product sales, which surged by 66.35% to Rs 173 crore.
Additionally, the company earned Rs 3 crore from interest on deposits and gains on current investments, bringing its total income to Rs 178 crore. This growth in revenue indicates a strong demand for rooftop solar solutions, but the company has yet to achieve sustainable profitability.
Financial Health and Investor Backing
SolarSquare currently holds Rs 120.5 crore in current assets, including Rs 60 crore in cash and bank balances. The company has raised $56 million from investors, including Elevation Capital, Lowercarbon Capital, and Good Capital. However, despite strong financial backing, SolarSquare has not been able to scale efficiently or optimize its cost structure.
Reports suggest that while SolarSquare has positioned itself as a key player in the rooftop solar industry, it needs to streamline its expenses and improve financial efficiency to remain competitive. The company continues to expand its operations but faces challenges in maintaining profitability.
Future Outlook for SolarSquare
As SolarSquare navigates its financial challenges, the company must find ways to balance its rising costs with revenue growth. The demand for rooftop solar solutions remains strong, and SolarSquare has a solid market presence. However, without better cost management, the company may continue to face financial pressure.
Moving forward, SolarSquare’s ability to optimize its operational efficiency and make strategic investments will determine its long-term success in the competitive solar energy market.
