The June quarter performance (Q1FY26) of solar module manufacturers Waaree Energies and Premier Energies, indicated that both companies experienced significant growth with a favourable outlook for the future, said Nuvama Institutional Equities, in their analysis.
The EBITDA of Waaree Energies and Premier Energies jumped by 81% and 53% year-over-year, driven by strong demand and improved operational efficiencies; the EBITDA margins increased by 633 basis points and 849 basis points year-over-year, according to Nuvama.
According to the brokerage, Waaree Energies’ integration both backward and forward will help mitigate earnings concentration risks. The inverter manufacturing facility is expected to commence operations by Q4FY26E, while the G H2 electrolyser plant, advanced lithium-ion cell production, and BESS capabilities are projected to begin in FY27E, allowing the company to tap into what the brokerage predicts could be an immense growth opportunity over several decades.
Premier holds a positive outlook on the growth potential of the solar sector in India, driven by increasing demand, supportive government regulations, and advancements in technology. Premier Energies intends to concentrate on the domestic market as the ALMM for cells is implemented starting June 2026.
Nuvama has assigned a ‘Buy’ rating to Waaree Energies, indicating its belief in the company’s future growth plans and financial stability. Conversely, Nuvama has not issued a rating for Premier Energies, although the company’s strategic growth and operational enhancements remain noteworthy. Premier’s emphasis on expanding within the domestic market aligns with its overall goal of improving its market presence.
Impact of Trump tariffs – A mixed bag
According to the brokerage, if a 25% tariff is imposed on US imports from India, Waaree Energies could potentially negotiate a pass-through for certain contracts; however, it may have to make compromises for others to strengthen its long-term business relationships, resulting in a mixed outcome. Waaree Energies has made export shipments to the US in Q1FY26, which will be recorded as revenue upon delivery.
Upcoming Domestic Content Requirement (DCR) demand opportunity
The management at Premier Energies is optimistic about a consistent rise in DCR demand, supported by initiatives like the PM Surya Ghar Yojana, the PM KUSUM Scheme, and the CPSU scheme. With the current rate at 15GW annually, it is expected that demand will grow to between 40 and 45GW each year by FY27, as the entire market transitions to a DCR market following the implementation of ALMM on cells from June 2026. Over the next decade, according to BNEF, demand is projected to reach 125GW. The management intends to capitalise on this industry trend as rooftop solar continues to gain significant traction and open access demand increases.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
