PL Capital bullish on solar equipment space; backs Premier, Waaree Energies

PL Capital on Renewable Equipment: Brokerage firm PL Capital is positive on the renewable energy equipment manufacturing segment, citing strong medium-term growth prospects for India’s solar sector. The brokerage expects the country’s installed solar capacity (AC) to nearly triple from about 106 GW in FY25 to around 290 GW by FY30E, driven by a sharp pickup in utility-scale additions, supportive government policies, and rising adoption of captive solar solutions by industrial users.

 

The sector is also likely to benefit from export opportunities, particularly to the US, as incentives linked to the Inflation Reduction Act and efforts to diversify supply chains away from China boost demand for Indian manufacturers. To capitalise on these trends, companies are undertaking substantial capital expenditure between FY24 and FY28 to expand production capacities and improve backward integration.

 

 

Amid this, PL Capital has initiated coverage on Premier Energies, Waaree Energies, and Vikram Solar, maintaining a positive outlook on all three renewable equipment manufacturers.

 

PL Capital has assigned a ‘Buy’ rating on Premier Energies and Waaree Energies, while maintaining an ‘Accumulate’ stance on Vikram Solar. The brokerage has set target prices of ₹1,106 for Premier Energies, ₹4,086 for Waaree Energies, and ₹275 for Vikram Solar, based on a sum-of-the-parts (SOTP) valuation, implying FY28E price-to-earnings (P/E) multiples of 22x, 24x and 19x, respectively.

Here's why PL Capital is positive on the renewable equipment sector:

India’s renewable and solar capacity expansion: According to analysts, India's power generation capacity increased from 356 GW in FY19 to 475 GW in FY25, driven primarily by robust additions in renewable energy. Renewable energy installations, excluding large hydro projects, are expected to scale from 81 GW in FY19 to nearly 430 GW by FY30E, supported by a range of policy incentives at both the central and state levels. This expansion is expected to fuel strong growth in solar capacity from about 106 GW in FY25 to 290 GW by FY30E. At the same time, India’s solar manufacturing ecosystem has expanded rapidly since CY20, with domestic module production capacity likely to reach 180 GW by FY30E.

 

Aggressive capacity expansion and backward integration: The brokerage said all three companies are pursuing aggressive capacity expansion and deeper backward integration over FY25–FY28E. Premier Energies has announced a ₹120 billion capital expenditure (capex) plan to expand module capacity to 11.1GW and cell capacity to 10.2GW. The company aims to set up a 5GW ingot–wafer facility, along with investments in battery storage and aluminium frames.

 

Vikram Solar is investing ₹112 billion to expand module and cell capacity, targeting 70–75 per cent backward integration. 

 

Waaree Energies has announced a significant investment of around ₹250 billion to ramp up modules (26.8GW by FY26), cells (15.4GW by FY27), and ingot–wafers (10GW by FY27). It will also invest in battery storage and allied businesses to strengthen integration and exports.

 

Order mix and demand drivers: "Premier Energies, Waaree Energies and Vikram Solar are leading players in the Indian solar equipment manufacturing sector, each differentiated by their order book mix and growth drivers," PL Capital said. Premier Energies’ order book is entirely domestic, highlighting its strong exposure to India-led demand. On the contrary, Waaree Energies derives a majority of its orders from overseas markets, with exports contributing about 59.5 per cent as of September 2025, positioning it to benefit from global demand. 

 

Vikram Solar has around 15 per cent of its order book from international markets, with demand largely driven by independent power producers, followed by the commercial and industrial segment. Together, the three companies are positioned for sustained growth, supported by diversified end markets, healthy order visibility and ongoing capacity expansion.  (Disclaimer: Target price and stock outlook has been suggested by PL Capital Views expressed are their own.)