Zodiac Energy has incorporated a wholly-owned subsidiary to expand its renewable energy portfolio through solar power generation and engineering, procurement, and construction (EPC) activities. The move aligns with the company’s business expansion strategy.

The new entity, named ZODIAC ENERGY IPP-3 PRIVATE LIMITED, was incorporated on September 14, 2026. The Registrar of Companies issued the Certificate of Incorporation under the Ministry of Corporate Affairs. Zodiac Energy designated this subsidiary as a Special Purpose Vehicle (SPV) to facilitate project execution.

Incorporation Details

The company subscribed to 100% of the initial paid-up share capital, making the new entity a wholly owned subsidiary. The financial structure of the incorporation is detailed below.

Zodiac Energy Limited holds complete control over the paid-up share capital. The consideration for the acquisition was cash. No governmental or regulatory approvals were required for this incorporation.

Strategic Intent

The subsidiary operates in the Solar Power Plants & Energy industry. Its primary objects include undertaking projects related to solar power generation and EPC activities. Management stated that the incorporation is expected to strengthen operational capabilities while supporting long-term growth in the renewable energy sector.

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Divya Joshi, Company Secretary & Compliance Officer, signed the filing on September 15, 2026.

Renewable energy player Zodiac Energy reported a 157% year-on-year surge in net profit for Q1FY27, reaching ₹7.0 crore. The growth was underpinned by a 45% rise in operating revenue to ₹141.8 crore, supported by expanding operational efficiency and margin accretion.

The Ahmedabad-based company filed its investor presentation with stock exchanges on September 3, 2026, disclosing strong top-line momentum alongside improved profitability metrics. Earnings per share (EPS) more than doubled to ₹4.6 from ₹1.8 in the corresponding period last year.

Financial Performance Snapshot

Revenue from operations grew significantly, outpacing cost inflation to drive broader bottom-line expansion. EBITDA rose 55% year-on-year to ₹15.1 crore, with the margin expanding by 70 basis points to 10.6%. This indicates improved operating leverage despite higher input costs.

Gross profit increased 41% to ₹28.3 crore, although gross margins contracted by 260 basis points to 20.0%. The divergence between gross and operating performance highlights effective control over other operating expenses, which grew at a slower pace (32%) than material costs (46%).

What the Numbers Show

A notable divergence exists between gross margin pressure and overall profitability. While gross margins fell due to rising material consumption costs, the company successfully insulated its bottom line through strict operating expense management. Finance costs remained relatively stable, rising only 5% to ₹4.6 crore, preventing interest burden from eroding the expanded EBITDA base. Consequently, PAT margins nearly doubled, demonstrating that operational discipline offset input cost inflation.

Operational Highlights & Strategic Outlook

Zodiac Energy secured a new contract worth approximately ₹7.1 crore for a 2 MW solar power plant in Gujarat. The company also incorporated a wholly owned subsidiary dedicated to solar power and EPC projects, signaling intent to scale execution capabilities.

Key operational metrics reflect improving working capital dynamics:

• Debtor days improved to 57 days from 61 days in the prior period.
• The IPP portfolio is scaling, with revenue reaching ₹5.0 crore, positioning it as a long-term growth driver.
• In FY26, cash PAT stood at ₹31.0 crore, up from ₹22.7 crore in FY25, driven by the dual advantage of EPC and IPP businesses.

Management outlined a strategic roadmap focusing on three pillars: scaling Battery Energy Storage Systems (BESS) execution to tap into a market growing at a 20-25% CAGR, consolidating presence in Africa through export-oriented EPC projects, and selectively deepening rooftop solar penetration. The company has set a target of ₹1,000 crore revenue by FY29, leveraging its Zenwatt-led expansion.

Balance Sheet Position

As of FY26, the net debt-to-equity ratio stood at 1.9x, a slight increase from 1.8x in FY25. Total assets grew to ₹482.4 crore from ₹302.4 crore in FY25, driven by an increase in inventories to ₹128.5 crore and trade receivables to ₹113.1 crore. Return on Equity (RoE) declined to 19.8% from 27.7% in FY25, while Return on Capital Employed (RoCE) fell to 19.9% from 27.0%, reflecting the capital-intensive nature of recent expansions.