Alpha | Premier Energies Ltd . – Equity Research Desk

Premier Energies Ltd – Transition to a Brighter Tomorrow

Incorporated in 1995 and headquartered in Hyderabad, Premier Energies Ltd is one of India’s leading renewable energy manufacturers, specializing in high-efficiency solar photovoltaic (PV) cells and modules. As of FY25, the company has an annual production capacity of 3,200 MW for solar cells and 5,100 MW for modules. Premier Energies has developed an integrated manufacturing ecosystem that covers the entire solar PV value chain – from ingots and wafers to cells and modules – supported by three state-of-the-art manufacturing facilities located in Telangana.

Products and Services

The company’s business operations include the manufacturing of solar photovoltaic cells, the manufacturing of solar modules including custom made panels for specific applications, the execution of EPC projects, independent power production and O&M services.

Subsidiaries: As of FY25, the company has 8 subsidiary and 2 associate companies.

Investment Rationale

• Entry into New High-Growth Segments: Inverters, Transformers, and BESS – Premier Energies is expanding beyond its traditional solar manufacturing base into high-potential adjacencies – inverters, transformers, and battery energy storage systems (BESS) – strengthening its position as a fully integrated clean energy player. Through the acquisition of KSolare Energy Pvt. Ltd., the company gains access to the fast-growing inverter market with a Pune facility capable of 500,000 units per annum, which will be scaled up to 1 million units by June 2026. The Transcon acquisition enables entry into the power transformer segment, with total capacity expected to rise from 2.5 GVA to 16.75 GVA by April 2026, targeting higher-margin MV, HV, and EHV categories. Simultaneously, the upcoming 12 GWh BESS facility in Pune (6 GWh in FY26 and 6 GWh in FY28) marks a strategic move into energy storage – a critical enabler of grid stability and renewable integration. Collectively, these ventures broaden the company’s portfolio, diversify revenue streams, and improve margin resilience.

• Aggressive Capacity Expansion Plans Across the Solar Value Chain – Aligned with its Mission 2028, the company is executing a robust capacity expansion program across the solar value chain – extending from ingots and wafers to cells, modules, and aluminium frames. The company’s 7 GW solar cell project at Naidupeta, Andhra Pradesh (upscaled from 4.8 GW) is progressing on schedule, with phased commissioning targeted by June and September 2026, while a 5 GW ingot-wafer facility at the same location will enhance backward integration and cost efficiency under the upcoming ALMM-III policy framework. In Telangana, Premier is establishing a 5.6 GW TOPCon module manufacturing plant and a 36,000 MT aluminium extrusion and anodizing facility (via JV with Nuevosol Energy) to localize key components, reduce import dependence, and improve cost competitiveness. All major projects are being financed largely through internal accruals, reflecting strong cash flow discipline.

• Q2FY26 – During the quarter, the company generated revenue of Rs.1,837 crore, an increase of 20% compared to the Rs.1,527 crore of Q2FY25. Operating profit increased from Rs.309 crore of Q2FY25 to Rs.561 crore of Q2FY25, a growth of 82%. The company reported net profit of Rs.353 crore, an increase by 71% YoY compared to Rs.206 crore of the corresponding period of the previous year. Operating profit margin improved from 20% to 31% and net profit margin improved from 13% to 19% during the period.

• FY25 – During the FY, the company generated revenue of Rs.6,652 crore, an increase of 110% compared to the FY24 revenue. Operating profit is at Rs.1,781 crore, up by 273% YoY. The company reported net profit of Rs.937 crore, an increase of 305% YoY.

• Financial Performance – The 3-year revenue and net profit CAGR stands at 106% and 297% respectively between FY23-25. The company has a debt-to-equity ratio of 0.47. Average 3-year ROE and ROCE is around 43% and 24% for FY23-25 period.

Industry

India’s energy demand is expected to rise faster than any other nation in the coming decades, propelled by its vast population and accelerating economic growth. To meet this surge sustainably, the country is increasingly relying on low-carbon and renewable energy sources. With its pledge to generate 50% of its electricity from renewables by 2030 and achieve net-zero emissions by 2070, India has set a major global climate benchmark. As of FY25, India ranks fourth globally in solar, wind, and total renewable energy capacity, sustaining its position from FY24. The nation’s energy landscape has undergone a structural transition, shifting steadily from conventional fossil fuels toward sustainable alternatives. Backed by ambitious targets, policy support, and a clear vision outlined at COP26 to achieve 500 GW of non-fossil fuel capacity by 2030, the renewable energy sector is unlocking immense growth opportunities. This transformation positions India as a pivotal player in the global shift toward clean and sustainable energy.

Growth Drivers

• In the Union Budget 2025-26, the government boosted its flagship rooftop solar initiative, PM Surya Ghar: Muft Bijli Yojana, by allocating Rs. 20,000 crore (US$ 2.33 billion) an 80% increase to fast-track the deployment of rooftop solar projects.
• Other initiatives by the government such as PM-KUSUM, CPSU scheme as well as DCR (Domestic Content Requirement) and AMM (Approved List of Models and Manufacturers) requirements.
• 100% FDI has been allowed under the automatic route for renewable energy generation and distribution projects.

Peer Analysis

Competitors: Vikram Solar Ltd, Apar Industries Ltd, etc.

Compared with the above peers, Premier Energies appears fairly valued, backed by superior profitability and strong revenue growth, making it one of the strongest performers in the sector.

Outlook

The company is poised for strong growth, supported by its ambitious Mission 2028 roadmap to achieve 10 GW of fully integrated ingot, wafer, cell, and module capacity. The company targets expanding cell and module capacities, underpinned by a planned capex of Rs.12,500 crore over the next three years. With a robust order book of 9,114 MW valued at Rs.13,250 million as of 30 September 2025, Premier Energies has strong revenue visibility and execution momentum. The strategic focus on scaling high-efficiency TOPCon technology, deeper backward integration, and entry into value-accretive segments such as BESS and inverters positions the company to sustain superior growth and profitability in India’s rapidly expanding renewable energy landscape.

Valuations

We believe Premier’s fully integrated business model underscores the management’s focus on long-term operational efficiency, margin expansion, and sustainable value creation. We recommend a BUY rating in the stock with the target price (TP) of Rs.1,242, 42x FY27E EPS. We also encourage maintaining a stop-loss at 20% from the entry price to manage potential downside risk effectively.

SWOT Analysis

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