Premier, Waaree Energies Q3 comparison, target prices, cues from solar IPO demand

Nuvama Institutional Equities has retained 'Buy' on both Premier Energies and Waaree Energies post their December quarter results. Calling  Premier Energies' Q3 results in-line, Nuvama said the company's expansion is on track with 5.6GW of module capacity to be operational by March 2026 and a 7GW cell facility to be commissioned in two phases, taking total capacities to 11.1GW and 10.6GW for modules and cells. On Waaree, it said Q3 results were a strong beat and that the company may surpass its FY26 Ebitda guidance. Waaree’s backward and forward integration should de-risk earnings concentration, it said.

"With a 43 per cent Ebitda CAGR over FY25–28, strong OCF, a healthy balance sheet and an RoE of 30 per cent-plus, we expect Premier Energies to manage high capex need of Rs 12,500 crore in next 2–3 years. We are raising FY26/27/28E PAT by 6 per cent, 8 per cent and 8 per cent; Braveheart ‘BUY’; target price: Rs 952," it said.

Nuvama said it expects Waaree Energies to see stronger operating cash flow, which may largely take care of higher capex of Rs 25,000 crore in next 2-3 years. 

"With net cash position, Rs 6,000 crore per annum, Ebitda, balance sheet stays strong. We are raising FY26, FY27 and FY28E PAT by 23 per cent, 18 per cent and 6 per cent; Braveheart ‘BUY’ with target price of Rs 3,867," it said.

Waaree Energies vs Premier Energies 

What recent solar IPOs suggests
Nuvama said recent IPOs, mainly Saatvik Green Energy Ltd and Emmvee Photovoltaic Power Ltd, garnered very weak demand for their issues. These companies were largely looking to raise money for capacity expansion
and backward integration. While the issues were fully subscribed, the subscription was weaker than previous IPOs in the solar space. 

"From this, we conclude it is going to be difficult for many companies in the solar space to raise funds for their capacity expansion and backward integration. This shall benefit all larger companies with balance sheet strength such as Reliance, Mundra Solar, Tata Power, Waaree Energies and Premier Energies, to scale up their capacities and further backward integrate to achieve growth and sustainable margins," it said.