Emmvee Photovoltaic hits 10% upper circuit; Jefferies initiates 'Buy'

Jefferies has initiated coverage on Emmvee Photovoltaic Power with a ‘Buy’ rating and a target of ₹320 per share. The target price implies 70 per cent upside from Monday’s close at ₹187.8 per share. It notes the stock is trading at about a 50 per cent discount to peers.

 

The brokerage projects 56 per cent earnings per share (EPS) compound annual growth rate (CAGR) over FY25-28E on the back of rising volumes, even as it builds a compression in Earnings before interest, tax, depreciation and amortisation/per watt-peak (Ebitda/Wp).  At 10:09 AM, Emmvee Photovoltaic Power share price was trading 6.49 per cent higher at ₹196.85 per share. The stock hit its 10 per cent upper circuit in trade at ₹203.3 per share on BSE. In comparison, BSE Sensex was down 0.12 per cent at 85,336.26. 

 

 

The coverage initiation is anchored on a strong solar sector outlook, with India’s annual solar PV installations expected to grow at a 24 per cent CAGR over FY25-28E, reaching 65 GWdc in FY28E from 34 GWdc in FY25. Falling solar economics versus thermal power and the emergence of solar-plus-storage are key drivers.  ALSO READ | Emkay names TVS Motor, Ather, Maruti as preferred auto plays; here's why 

Additionally, recent solar + Battery Energy Storage System (BESS) discovered tariffs of ₹3–3.5/kWh imply BESS costs of ₹4.5–5/kWh, which compare favourably with marginal thermal tariffs of ₹5.4–5.8/kWh, while offering long-tenor price certainty versus thermal escalation.

 

The note also highlights that the approved list of models and manufacturers (ALMM) and domestic content requirement (DCR) norms have supported domestic module economics by reserving eligibility in key government schemes for domestic manufacturers, tightening cell availability and boosting prices/profitability. Similar protection for the ingot/wafer could extend support over the medium term.

 

Emmvee Photovoltaic Power positives, per the initiation note, include its early entry into TOPCon (with 3 GW operational since Sep-24), strong DCR-driven profitability, and an adequately-funded balance sheet, which together support expansion and backward integration. Emmvee also plans to scale to 8.9 GW cell and 16.3 GW module capacity by end-FY27E, with the intent to move upstream into ingot/wafer as policy evolves. However, it does not plan to enter BESS/inverters.  ALSO READ | JM Financial expects steady ARPU growth for telcos in Q3; Jio, Airtel lead 

Also, rapid growth and strong profitability give Emmvee a competitive edge, reckons the brokerage. Adequately funded balance sheet and elevated margins in the DCR market ensure strong cash flows to fund capacity expansion/backward integration- a key competitive edge.

 

Meanwhile, the brokerage expects industry profitability to normalise as Indian capacities rise to 151 GW (cells) and 217 GW (modules) by FY28E, exceeding demand estimates. Even so, it expects Emmvee to sustain high-teens steady-state return on capital employed (RoCE), supported by scale and integration, and projects 56 per cent Ebitda CAGR over FY25-28E, despite expected compression in Ebitda per watt-peak (EBITDA/Wp).

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.