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India's Solar Giant Poised for 28% Jump
11 Feb
Summary
- Brokerage initiates coverage with a 'buy' rating and ₹1,000 target.
- Strong capacity expansion and robust order book drive optimistic outlook.
- Potential US-India trade deal could accelerate export growth and overseas expansion.
Motilal Oswal has initiated coverage on Premier Energies, a leading integrated solar cell and module manufacturer in India, with a 'buy' recommendation and a price target of ₹1,000 per share. This target suggests a potential 28.2% increase from its recent closing price. The brokerage's positive stance is underpinned by the company's aggressive capacity ramp-up plans and its industry-leading backward integration.
Premier Energies is projected to scale its module and cell manufacturing capacities significantly, reaching 11.1 GW and 10.6 GW respectively, beyond FY27, a substantial increase from current levels. The company's robust order book further supports this growth trajectory. An anticipated trade agreement between the US and India could serve as a major catalyst, potentially boosting export revenues and enabling overseas manufacturing investments.
While acknowledging concerns around commodity price volatility, Motilal Oswal has factored in a moderate EBITDA margin of 20% by FY28. The firm views current valuations as attractive, citing strong projected EBITDA compound annual growth rate. The company's high cell-to-module capacity ratio is expected to ensure sustained high utilization and healthy profit margins going forward.
