Waaree, Premier Energies Vikram Solar: PL Capital initiates coverage, check targets & more

PL Capital initiated coverage on three major renewable equipment manufacturers—Premier Energies (PREMIERE), Waaree Energies (WAAREEEN), and Vikram Solar (VIKRAMSO)—assigning a positive outlook for the sector. India’s renewable and solar capacity is on a sharp growth trajectory.

PL Capital notes, "India’s solar sector is on an expansion spree. Domestic Installed solar capacity (AC) is expected to jump from 106GW in FY25 to 290GW by FY30E as part of the government’s 500GW RE target." This expansion will be driven by "utility-scale additions, rooftop installations, solar pumps, and captive industrial demand."

The domestic manufacturing ecosystem is rapidly scaling up, aided by government incentives and strengthening export opportunities, particularly towards the United States. As PL Capital states, "This expansion is set to significantly benefit domestic solar equipment manufacturers, supported by import tariffs on Chinese equipment; non-trade barriers such as the Approved List of Models and Manufacturers (ALMM) and Domestic Content Requirement (DCR) norms in India; and improving outlook for cell manufacturing in the US."

All three companies under coverage are pursuing aggressive capital expenditure and backward integration from FY25 to FY28. "PREMIERE is implementing a ~Rs120bn capex plan through FY26-28E to expand module capacity to ~11.1GW, cell capacity to ~10.2GW, and establish a 5GW ingot–wafer facility, along with investments in BESS and aluminium frames." PL Capital adds.

"VIKRAMSO is executing a ~Rs112bn capex program to scale module capacity from 4.5GW in FY25 to 17.5GW by FY27 and to 12GW of cell capacity by FY27, targeting ~70–75% backward integration." Meanwhile, "WAAREEEN has outlined an aggressive ~Rs250bn capex plan over FY26–28E across modules (26.8GW by FY26), cells (15.4GW by FY27), ingot–wafers (10GW by FY27), BESS and adjacent businesses to deepen backward integration and expand exports."

Order book analysis by PL Capital highlights how each company is positioned in the market. "PREMIERE has a fully domestic order book, reflecting strong positioning in India-led demand." In contrast, "WAAREEEN has a predominantly overseas order book, with exports accounting for ~59.5% as of Sep’25, positioning it well to capitalise on global opportunities." For Vikram Solar, "VIKRAMSO has ~15% of its order book from overseas markets as of Sep’25, with demand largely driven by the IPP segment (52%), followed by the C&I segment (20%)."

PL Capital believes, "Collectively, the three companies are well placed for sustained growth, underpinned by diversified end-market exposure, strong order visibility, and ongoing capacity expansion initiatives."

India’s power generation capacity has increased from 356GW in FY19 to 475GW as of FY25, primarily due to renewable energy additions. Renewable installations, excluding large hydro, are expected to rise to approximately 430GW by FY30, from 81GW in FY19.

Solar power is the key driver, with grid-connected renewable generation capacity (excluding large hydro) making up an estimated 37% of the national total as of March 2025, projected to climb to 54% by FY30. PL Capital notes, "Growth has been led by solar power, which is expected to grow to ~290GW by FY30E from 28GW in FY19."

In terms of profitability, PL Capital observes, "While near-term margins and returns across the solar manufacturing space remain attractive, aggressive capacity additions announced by multiple players could normalise profitability over the medium term." However, "We expect integrated manufacturers (ingot-to-module) and those with US manufacturing presence to sustain higher utilisation and superior profitability relative to peers."

Broader sector trends are reinforced by India’s rising power demand and per capita consumption. "India’s per capita electricity consumption has risen steadily over the past decade, climbing from 819kWh in FY11 to 1,395kWh in FY24 (CEA data), reflecting a CAGR of 4.2%." According to PL Capital, "Growth has been supported by rising economic activity, higher domestic usage, and expanded rural and household electrification." After a dip in FY21 due to the COVID-19 pandemic, "demand recovered strongly in FY22 (1,255kWh per capita) and continued to rise through FY23 and FY24."

Between FY15 and FY25, total energy requirements increased at a 4.7% CAGR, and future demand growth is expected to be fuelled by urbanisation, appliance penetration, electric vehicle adoption, and continued supportive policy. PL Capital states, "Looking ahead, demand is expected to continue rising propelled by structural drivers such as rapid urbanisation, higher appliance penetration (especially cooling and air conditioning), accelerating EV adoption, digital infrastructure expansion, and supportive government policies aimed at universal access, renewable integration, and industrial growth."

PL Capital’s targets for Premier Energies, Waaree Energies, and Vikram Solar are based on a sum-of-the-parts (SOTP) methodology, reflecting sector optimism and anticipated expansion. The firm reiterates, "We initiate coverage with a ‘BUY’ rating on PREMIERE/ WAAREEEN and ‘Accumulate’ rating on VIKRAMSO with TP of Rs1,106/Rs4,086/Rs275 based on SOTP, implying PE of 22x/24x/19x FY28E."