Waaree Energies, Premier Energies Get Their Most Bearish Price Target As Bernstein Initiates Coverage

Bernstein has initiated coverage on Waaree Energies Ltd. and Premier Energies Ltd. with an ‘Underperform’ rating, assigning the most bearish price targets among analysts. It sees a 21% downside for Waaree and 26% for Premier, valuing them at $6 billion and $4 billion, respectively.

The brokerage warns that India’s solar photovoltaic manufacturing sector is nearing peak returns due to oversupply, low barriers to entry, and intensifying competition.

Among the two companies, Bernstein prefers Waaree, citing its potential to expand into producing ingots and wafers—the raw materials used in solar cells—rather than relying on external suppliers.

It has a price target of Rs 1,902 and Rs 693 for Waaree and Premier Energies, respectively. Among all analyst data available on Bloomberg, Bernstein has the lowest target price on both companies.

The analyst notes that Waaree’s large international order book provides better visibility on pricing and spreads, a factor missing for Premier.

However, it believes both companies will struggle against larger competitors like Reliance and Adani Enterprises, which have greater financial resources and backward integration capabilities. Bernstein expects returns in the sector to normalise from over 40% to the mid-teens.

Despite challenges, Bernstein considers solar PV manufacturing an important sector to track due to India’s renewable energy push and government incentives. However, it warns that the industry is highly cyclical. Globally, manufacturing capacity already stands at 1,200 gigawatts, double the estimated demand of 600 gigawatts.

The brokerage points out that many leading module manufacturers from 15 years ago have either exited the business or gone bankrupt, reinforcing its view that this is a “sell on positive development” story.

Bernstein highlights a looming supply glut in India, where solar module demand is expected to reach 40 gigawatts in the financial year 2026, while manufacturing capacity is projected to exceed 70 gigawatts. The solar cell market, which saw tight supplies in financial year 2025, is also expanding rapidly, with capacity expected to rise from 21 gigawatts in March 2025 to over 60 gigawatts by financial year 2027.

While government policies, such as import restrictions and domestic procurement mandates, are currently providing support, Bernstein believes the growing supply pipeline could put pressure on prices and profitability.

The firm also flags risks such as long-term warranties on untested products and heavy dependence on import restrictions in India and the US. It sees export growth, which surged from $0.1 billion in the financial year 2022 to $2 billion in the financial year 2024, as unsustainable.

The US, which pivoted away from Chinese imports, currently has 52 gigawatts of module manufacturing capacity, with another 19 gigawatts under construction, against an expected demand of 54 gigawatts in 2025. Bernstein warns that the large price gap between U.S. and global module prices—25 cents per watt versus 9 cents—could narrow, making exports less attractive.