Nuvama Bullish On Premier Emerges As New Energy Play, Initiates Coverage — Check Target Price

Brokerage firm Nuvama Institutional Equities has initiated coverage on Premier Energies Ltd. calling the company a tactical winner in the New Energy J-curve, even as its core solar business remains steady.

Nuvama has a target price of Rs 1,270 on the counter, with a 'buy' call. According to the brokerage, Premier is aggressively scaling up capacity, deepening backward integration and maintaining healthy DCR-linked realisations.

These factors, it says, support an FY26–28 revenue and Ebitda CAGR of 49% and 43%, respectively, at a time when funding for fresh capacity additions is tightening, easing concerns of future oversupply.

Premier continues to enjoy peer-leading margins among integrated players. While margins may soften sequentially, deeper integration and new businesses should cushion the impact, as per the note.

The brokerage says Premier is building a horizontally and vertically integrated New Energy platform, entering transformers, inverters and BESS to diversify risk and sustain growth at modest margins. Strong profitability, it adds, will generate free cash flow that can pave the way for moves into data centres, green hydrogen and green ammonia.

On valuations, Nuvama draws a parallel with the IT sector’s 2000-era trajectory. Premier’s current EV/Ebitda value reflects growth prospects, with earnings expected to catch up soon.

Still, Nuvama flags several factors difficult to assess typical of emerging industries including cuts in import tariffs, rapid tech upgrades and the risk of potential modules overcapacity.

Share price of Premier Energies ended 2.79% lower on the NSE at Rs 961.70 apiece on Tuesday, as compared to a 0.29% decline in the benchmark NSE Nifty 50. The stock has fallen 28.50% in the year-to-date period, and 12.12% in the last 12 months.