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Motilal Oswal Report
Motilal Oswal has initiated coverage on Premier Energies Ltd. with a 'Buy' rating and a target price of Rs 1,000, citing the company's strong capacity expansion, industry‑leading backward integration, and best‑in‑class margins. The brokerage said the company stands out as a leading solar module manufacturer with one of the most robust integration models in the sector.
As of January 2026, Premier Energies operates 5.4GW module and 3.6GW cell manufacturing capacity, which is set to expand sharply to 11.1GW and 10.6GW, respectively, by the end of FY27. Motilal Oswal said this aggressive scale-up supports revenue visibility and strengthens the company's competitive position.
A key differentiator has been Premier Energies's high backward integration with a cell‑to‑module integration ratio of 67%, far superior to peers such as Waaree Energies (24%) and Emmvee (29%) as of Q3 FY26. This has enabled Premier Energies to consistently deliver industry-leading Ebitda margins of over 30%.
The brokerage highlighted that clarity on a potential US‑India trade deal could act as a major catalyst for Premier Energies by:
- Boosting exports (currently just 1% of 9MFY26 revenue), and
- Enabling the company to establish overseas manufacturing units.
However, commodity price volatility especially in silver remains a concern. Motilal Oswal has already factored in margin moderation, projecting Ebitda margin at ~20% by FY28 versus 28% in FY26.
Even with these adjustments, the brokerage expects a 30% Ebitda CAGR over FY25–FY28. At ~10x FY28 EV/Ebitda, Motilal Oswal believes the stock trades at a reasonable valuation given the significant scale-up in capacity and earnings.
The brokerage said Premier Energies' superior integration, cost leadership, strong pipeline, and structural industry tailwinds make it a compelling long‑term story within the domestic solar manufacturing space.
Upside risks:
- Formalization of localisation directives for wafers, ingots, and batteries (similar to ALCM),
- Accelerated government measures to facilitate PPA signings and ensure transmission connectivity for IPPs
Downside risks:
- Intensifying competition from large domestic players, which could pressure pricing and margins;
- Delays in the execution of cell, ingot-wafer, and battery facilities;
- Slow execution and ramp-up of domestic cell facility, potentially prompting the government to postpone the implementation of ALMM-II.
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