Premier Energies is emerging as one of the most integrated solar manufacturing platforms in India, according to a new initiation note from Motilal Oswal Financial Services. The brokerage has initiated coverage on the stock with a Buy rating and a target price of Rs 1,000, implying a 21% upside from the current market price of around Rs 824.
The optimism is rooted in Premier Energies' integrated model across solar cells and modules, its aggressive capacity ramp-up, and a policy environment that strongly favours domestic manufacturing. With India targeting 280 GW of solar capacity by 2030, up from roughly 136 GW today, Motilal Oswal believes the company is well-positioned to ride the multi-decade growth runway.
Capacity Expansion To Fuel Earnings Growth
Motilal Oswal expects Premier Energies' EBITDA and PAT to grow at a 30% CAGR between FY25 and FY28, driven primarily by capacity additions and higher utilisation. Module manufacturing capacity is slated to expand to 11.1 GW by the end of FY26, while cell manufacturing capacity is expected to scale to 10.6 GW by FY27.
As utilisation ramps up, consolidated EBITDA margins are projected to expand from about 27% in FY25 to 28% in FY26, before moderating to around 20% by FY28 as newer, lower-margin businesses scale up. The moderation, the brokerage notes, is a function of mix rather than execution risk.
Backward Integration Strengthens Margin Profile
A key differentiator for Premier Energies is its deepening backward integration. By FY27, the company's cell-to-module integration ratio is expected to reach 95%, which should support consistently high utilisation and protect margins against volatility in global supply chains.
At around 30% EBITDA margin in 9MFY26, Premier Energies has already outperformed peers, aided by higher utilisation across both cell and module lines and a strong presence in the domestic cell segment, where competition remains limited. Return ratios also reflect this strength, with ROE and ROCE in the mid-50% range in FY25, according to the report.
New Verticals Add Optionality
Beyond core solar manufacturing, Premier Energies is expanding into allied power equipment verticals such as battery energy storage systems (BESS), inverters and transformers. These businesses are expected to contribute meaningfully from FY27 onwards.
The company is setting up a 1.2 GWh cell-to-pack battery facility, scheduled to come online in June 2026. Through its investments in KSolar Energy and Transcon Industries, Premier Energies is also building exposure to residential inverters and transformers, with inverter capacity expected to double by December 2026 and transformer capacity guided to scale sharply by July 2026.
Motilal Oswal values Premier Energies using a sum-of-the-parts approach, valuing the domestic module business at 13x FY28 EBITDA and the new energy verticals at 10x FY28 EBITDA, arriving at the Rs 1,000 target price.
Key upside risks include faster localisation norms for wafers and batteries and quicker execution of transmission projects enabling higher PPA signings. On the downside, intensifying competition from new domestic players, execution delays in cell and battery facilities, and potential postponement of ALMM-II implementation remain monitorables.
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