Fujiyama Power Systems has emerged as a potential beneficiary of India’s expanding rooftop solar market, with DAM Capital initiating coverage on the stock with a BUY rating and a target price of ₹540 per share, implying an upside of around 45%.
The brokerage believes the company’s manufacturing expansion, extensive distribution network and exposure to the government’s rooftop solar programme could support strong earnings growth over the medium term.
DAM Capital said, “Fujiyama offers a differentiated play within India’s listed solar manufacturing space. Long-term outlook is particularly attractive given the humongous growth runway, complemented by strong competitive moat built on an entrenched distribution network, brand recall, and technical expertise in inverters and batteries.”
Stock Price Trend
Fujiyama Power Systems shares jumped 5% to day’s high of ₹374.45 per share on BSE today, October 22, after the company clarified that its planned 1.2 GW domestic content requirement (DCR) solar cell manufacturing facility in Ratlam, Madhya Pradesh, remained on track despite proposed restrictions. The company said machinery and equipment for the facility had already been delivered and it did not expect any material impact on capital expenditure or the commissioning timeline.
Fujiyama Power Systems said the facility was scheduled to be commissioned in the first quarter of FY28 and clarified that it had not announced plans for additional solar cell manufacturing capacity. It added that its operations did not depend on any ongoing foreign technology transfer.
The stock has been under pressure in recent times. It fell 8% in 1 week, 15% in 1 month and 2% in 3 months. However, in 6 months, it rose 42%.
Why DAM Capital is bullish on Fujiyama Power Systems
DAM Capital highlighted Fujiyama’s integrated product portfolio, distribution network and exposure to the government’s PM Surya Ghar: Muft Bijli Yojana as key growth drivers. The company operates across 25 states, with more than 1,000 distributors, over 1,200 exclusive Shoppes and approximately 7,900 dealers.
The brokerage believes the rooftop solar market has substantial headroom for growth. By September 2026, approximately 5.95 million households had been solarised under PM Surya Ghar, with around 17.5 GW commissioned against the target of 10 million households by March 2027. A potential second phase could provide an additional demand catalyst.
“We believe phase I of PMSGY has only scratched the surface of India’s rooftop solar opportunity. With CEEW estimating the technical potential of rooftop solar at ~250mn households (~638GW), the sector has a long growth runway,” it added.
Fujiyama’s in-house inverter manufacturing capabilities and backward integration into solar panels, cells and batteries could strengthen its competitive position.
Fujiyama Power Systems earnings estimates: Revenue to grow 58%
DAM Capital expects Fujiyama’s revenue to rise from ₹26.5 billion in FY26 to ₹66.3 billion in FY28, implying a compound annual growth rate (CAGR) of approximately 58%. EBITDA is projected to increase from ₹4.9 billion to ₹12.8 billion over the same period, translating into a CAGR of around 62%.
The brokerage expects domestic content requirement (DCR) modules to become a key earnings driver as captive solar cell manufacturing scales up.
“We expect the DCR module segment to be the key earnings growth driver over FY26-28E, as captive cell manufacturing scales up. The segment’s share of revenue and EBITDA is expected to increase from ~9% and ~17%, respectively, in FY26 to ~39% and ~58% by FY28E,” it estimates.
The brokerage expects EBITDA margins to remain around 18%-19% through FY26-FY28, supported by backward integration and a higher contribution from DCR modules. It also projects a return on invested capital of approximately 53% over FY27-FY28 and expects the balance sheet to become virtually net-debt-free by FY28.
DAM Capital said, “In the medium term, Fujiyama’s capacity expansion across solar modules and cells, inverters and batteries should drive revenue/EBITDA CAGR of 58%/62% over FY26-28E. Despite rapid growth, Fujiyama’s balance sheet is expected to remain healthy.”
However, risks include intensifying competition, pricing pressure in non-DCR modules, delays in manufacturing expansion and slower-than-expected rooftop solar adoption.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
