Waaree Energies a Buy, neutral on Premier Energies, says Nomura; target prices

Nomura has initiated coverage on Indian solar module makers, assigning a Buy rating to Waaree Energies with a target price of Rs 3,710, and a Neutral call on Premier Energies with a target of Rs 1,100. The brokerage said the sector is well-positioned for strong growth as India’s installed solar energy capacity is projected to jump to 293 GW by FY30 from 106 GW in FY25, driven by rising power demand, a shift to renewables, competitive tariffs, and supportive government policies

"The rapid SE additions are likely to augur well for solar module demand, which we expect will increase by 1.4x to 58GW in FY28F from 42GW in FY25. This presents a huge demand opportunity for Indian module manufacturers who have grown manifold in the recent past, driven by supportive policies (ALMM, BCD, DCR) that restricted imports," Nomura said.

To meet rising demand, Indian manufacturers have announced capacity expansion plans of 100–110 GW in modules and 70–80 GW in cells. While this raises oversupply concerns, Nomura noted that in-house cell capacity remains the key bottleneck, favoring integrated players.

It added that overseas markets such as the US and Europe offer attractive export opportunities as demand there outpaces local supply. However, rising trade and geopolitical uncertainties could test the ability of companies to navigate global headwinds.

Waaree Energies Limited – Buy | Target price: Rs 3,710
Nuvama said Waaree Energies (WEL) is among India’s largest solar module and cell manufacturers, with installed capacities of 14.9 GW (modules) and 5.4 GW (cells) as of June 2025. These are expected to expand to 25.7 GW and 17.4 GW, respectively, by FY28F, alongside commissioning of 11 GW wafer capacity, making WEL a highly integrated player, the brokerage said.

Despite intensifying competition and oversupply concerns, Nomura expects Waaree's volumes to grow at a 29 per cent CAGR over FY25–28F, supported by scale-driven efficiencies, a robust Rs 490 bn order book, and supportive policies (ALMM, DCR). While rising industry supply may pressure realizations, backward integration and a favorable shift towards higher-margin DCR products should help sustain margins.

Nomura forecasts WEL’s revenue and Ebitda to grow at 34 per cent and 43 per cent CAGRs, respectively, over FY25–28F. The target price of Rs 3,710 implies 16 per cent upside, based on Sep-27F EV/Ebitda multiple of 13x (25 per cent premium over global peers).

Key risks: faster-than-expected commissioning of industry capacity; trade/geopolitical uncertainties.

Premier Energies Limited – Neutral | Target price: Rs 1,100
Premier Energies (PEL) is set to deepen backward integration by FY28F, scaling its cell/module capacities from 3.2 GW/5.1 GW to 10 GW/11 GW, and adding 10 GW each of ingot and wafer capacity. With experience as an incumbent cell manufacturer since FY22, PEL enjoys an efficiency advantage over newer peers, Nomura said.

Nomura expects PEL to maintain its leadership in the high-realization DCR market, aided by integrated operations and external sales of DCR modules and cells. PEL currently has one of the best margin profiles in the industry (26–28 per cent), driven by higher-margin cell sales (39 per cent of its June 2025 order book).

However, margins are likely to contract post-FY28F as competition intensifies and all cell output shifts in-house under ALMM-II norms. Nomura forecasts revenue and Ebitda  CAGRs of 33 per cent and 31 per cent over FY25–28F. 

Nomura initiated coverage on this stock with a Neutral rating and TP of Rs 1,100, based on one-year forward EV/Ebitda multiple of 13x (25 per cent premium to global peers).

Key risks: faster commissioning of new capacity, technological obsolescence.