Suzlon, Premier Energies, Emmvee, Saatvik Green shares: Target prices

Ambit Capital on Thursday said cell oversupply in India’s solar PV manufacturing sector has arrived earlier than it had expected, saying India’s solar manufacturing cycle is at an inflection point, with profitability shifting from modules to cells and, eventually, to ingot-wafer manufacturing.

It said ALMM List III, which will take effect in June 2028, reinforces the government’s intent to localise the entire PV value chain, but added that low barriers to entry mean early movers should earn supernormal returns only until competition enters and returns normalise.

On valuations, Ambit said, “Our DCF-based target implies a FY28 20 times P/E for Premier, given its strong balance sheet, promoter experience and high efficiencies. Emmvee’s FY28 P/E of 14x is justified given lack of adjacencies and small cap. Saatvik continues to have a P/E of 8x until its cell line is stabilised and operational.”

The domestic brokerage assigned a 'Buy' rating to Suzlon Energy Ltd and Saatvik Green Energy Ltd, while placing a 'Sell' rating on Emmvee Photovoltaic Power Ltd and Premier Energies Ltd.

Ambit Capital set a target of Rs 480 for Saatvik Green, Rs 333 for Emmvee Photovoltaic Power and Rs 825 for Premier Energies. In the case of Suzlon Energy Ltd, Ambit Capital suggested a target of Rs 59.

It flagged slowing growth in wind additions as a risk for Suzlon Eneggy. Continued weakness in power demand could lead to lower wind capacity additions, thereby impacting order books, it said.

Ambit said recent DCR module awards were 15 per cent below current prices, while the deferral of ALMM-II coincides with a 35 per cent increase in August 2026 cell production to about 2.9GW. It said India already has module capacity of about 230GW against its annual demand estimate of 65-84GW over FY27-FY32. According to the brokerage, August 2026 production of 2.87GW annualises to 34.4GW, which is already above its estimate of about 30GW of domestic cell demand in FY27.

The brokerage said the sector’s return on invested capital is primarily driven by spreads on cells and DCR modules sold by solar OEM companies, and that cell production drives profitability in the sector. It said the Ministry of New and Renewable Energy’s 18 July order, which deferred ALMM-II for net-metering and open-access projects to 31 December 2026, pushes out five to seven months of C&I cell demand even as supply continues to flow.

Ambit said it expects RoIC to fall to 19-21 per cent from more than 40 per cent as DCR-module spreads contract, working capital rises and replacement capex builds up. It said solar PV now shows every peak-cycle marker, including record returns, capacity above demand, low entry barriers and rising equity issuance. It added that backward integration, technology upgrades and adjacencies will require sustained capex, while excess supply, incremental investments and lower spreads will compress returns.

The brokerage said its channel checks showed ongoing solar cell tightness had pushed cell prices to 14-15 cents/Wp from about 13 cents/Wp a few months earlier, with spot solar cell EBITDA spreads touching almost 6.5 cents/Wp. It said this had been positive for domestic solar cell manufacturers such as Emmvee and Premier, but added that with the ALMM extension, supply tightness should ease and spreads should moderate. It also said SECI’s recent DCR module awards imply steep realisation cuts by the third quarter of FY28, although Vikram Solar’s cell order from Avaada starting in September 2026 suggests near-term pricing should hold.

Ambit said FY26 annual reports suggested divergence in accounting assumptions. It said Premier depreciates plant and machinery at 22 per cent, against 12 per cent and 18 per cent for Emmvee and Saatvik, and provides 3 per cent of FY26 revenue for warranties, against 0.2 per cent for Emmvee and Saatvik. It also cited key points from its analysis of Avaada’s DRHP, including a high EBITDA margin of 24 per cent against 12 per cent for peers, the lowest capex per GW at Rs6.6 billion against Rs9.2 billion for peers, and high related-party transactions.

Summing up its view, Ambit said cell oversupply in the Indian solar PV manufacturing sector has come earlier than expected, with easing tightness and lower spreads likely to weigh on returns. The brokerage said it had turned sellers on Emmvee, maintained 'Sell' on Premier, and retained 'Buy' on Saatvik and Suzlon.