Waaree Energies, Premier Energies: Why Motilal Oswal maintains 'buy' on renewable stocks?

The Ministry of New and Renewable Energy (MNRE) has issued the approved list of models and manufacturers (ALMM) Order III for solar wafers, effective from 1 June 2028. This follows a draft amendment circulated in September 2025 for industry consultation, aiming to strengthen the domestic solar manufacturing ecosystem.

The enforcement of ALMM-III will depend on the presence of at least three independent wafer manufacturing units with a combined capacity of 15 GW. Certain exemptions apply, including projects with bid deadlines within seven days of the order’s issuance, those already exempt under ALMM-II for cells, and open access or net-metered projects commissioned before June 2028.

ALMM-III complements the existing ALMM lists for modules and cells, with ALMM-II set to take effect on 1 June 2026. As of March 2026, India’s registered solar manufacturing capacities stand at approximately 174 GW for modules and 27 GW for cells, highlighting significant domestic production.

This notification completes the backward integration mandate under the ALMM framework, requiring projects to source solar components from approved domestic manufacturers at the wafer-ingot stage. The move aims to establish a comprehensive domestic supply chain from wafers to modules.

According to a report by Motilal Oswal Financial Services, the Indian module manufacturing sector is currently fragmented, with many small players creating pricing pressures. The implementation of ALMM-II and ALMM-III is expected to consolidate the industry, favouring larger integrated manufacturers capable of wafer-to-module production.

Motilal Oswal notes that this consolidation will likely benefit companies with existing or planned wafer-ingot capacities by improving revenue visibility and margins. The report highlights Waaree Energies Ltd (WEL) and Premier Energies Ltd (PEL) as key beneficiaries of this development.

Waaree Energies recently announced a 10 GW wafer-ingot facility at Butibori, Nagpur, with an investment of around Rs 6,200 crore. The company held a groundbreaking ceremony on 14 March 2026 and aims to commission the plant in the financial year 2027, ahead of ALMM-III enforcement. Premier Energies plans a 10 GW ingot-wafer line in Naidupeta, Andhra Pradesh, with a capital expenditure of Rs 5,900 crore. The project will be developed in two phases, with 5 GW expected by December 2027 and the remaining 5 GW by December 2028.

Motilal Oswal Financial Services states that the ALMM-III order was widely anticipated and does not change their investment outlook for WEL and PEL. The firm maintains a 'buy' rating on both stocks, valuing WEL at a target price of Rs 3,514 per share and PEL at Rs 1,000 apiece, based on a sum-of-the-parts approach that factors in their module businesses and other segments.