Shares of Indian solar module manufacturers, Waaree Energies Ltd. and Premier Energies Ltd. were in focus on Thursday, September 4, after global brokerage firm Nomura initiated coverage on both stocks.
Nomura initiated coverage on Waaree Energies with a ‘Buy’ rating, and a price target of ₹3,710, implying a 16% upside.
The brokerage believes Waaree Energies’ robust growth prospects are partly offset by its exposure to trade uncertainties.
It expects Waaree’s EBITDA to grow at a CAGR of 43% over FY25-28F, driven by scaling up operations and improved unit economics.
For Premier Energies, Nomura initiated coverage with a ‘Neutral’ rating despite what it termed as healthy prospects. The brokerage has a price target of ₹1,100, implying an 8% upside.
The foreign brokerage believes Premier Energies is expected to significantly increase the extent of its backward integration by FY28F by expanding its existing cell and module capacities, while also building 10GW each of ingot and wafer capacities.
The brokerage expects an EBITDA CAGR of 31% during FY25–28F, led by higher volumes.
In a broader note on the Indian solar sector, Nomura said the industry is poised for exemplary growth. It estimates that India’s solar PV equipment demand will rise 1.4x over FY25-28F, supported by a 23% CAGR in installed solar energy capacity.
On the supply side, policy incentives are expected to boost domestic manufacturing, encourage capacity expansion, and shield the local market from imports.
Nomura expects 100-110GW of new module capacity to be added over the next three years, which could raise oversupply concerns.
However, it believes backward-integrated companies will be better positioned, supported by the ALMM-II framework. Despite competition and geopolitical risks, the brokerage sees sizeable export opportunities for Indian players.