Among the largest players, Waaree Energies has outperformed its closest rival Premier Energies this year in terms of share price. Its stock has increased by 16% so far in 2025, compared to a 25% decline in the latter.
Other listed companies in the sector, such as Vikram Solar and Websol Energy System, have declined by 11% and 22%, respectively, so far this year.
On valuations too, Waaree looks more grounded at 26.79 times earnings, compared to Premier’s steeper 34.11x.
Premier trades at a higher multiple than Waaree due to better margins and as it was backward integrated before Waaree, according to Umesh Raut, equity research analyst at Nomura.
In backward integration, a company starts building its own in-house manufacturing setup, reducing its dependence on outside suppliers.
Waaree’s consolidated operating margin rose to 25.17% in the September quarter (Q2FY26) from 16.76% a year earlier, according to its latest investor presentation. Premier, meanwhile, reported an operating margin of 30.5%, up from 24.9% in the same period last year, its investor presentation showed.
Waaree, now India’s largest module manufacturer by capacity and volume, has begun backward integrating as well, a move that helped its Ebitda growth outpace Premier’s in FY26 so far, Raut said.
Waaree has access to higher capital availability and is better placed to undertake future rounds of capacity expansions and backward integration, thus bolstering its already large scale, Raut added.
It has a total module capacity of 16.1GW and cell capacity of 5.4GW, compared with Premier’s 5.1GW and 3.2GW, respectively, showed a November report by Motilal Oswal Financial Services.
The order book of Waaree stands at approximately ₹47,000 crore as of September end, while Premier’s is ₹13,200 crore.
Trade and competition
Analysts caution that the story may not be as simple as it looks. Waaree’s US exposure, already under the shadow of reciprocal tariffs, could throw a few curveballs, especially with margin pressures likely building up for the solar industry in the coming years.
Trade uncertainties and geopolitical headwinds pose significant challenges for Waaree, which has a substantial US exposure, while Premier’s almost entire revenue is generated in India, Raut said.
“The US reciprocal tariffs of 50% can dent its US business, which accounts for close to 60% of its order book. Further, the ongoing anti-dumping investigations in the US are also a negative overhang for the company as any unfavourable outcome can severely impede its US business,” he added.
For Waaree, overseas markets accounted for 47.2% of its revenue in Q2FY26, whereas Premier’s entire order book remained domestically focused as of 30 September.
During a conference call with analysts on 30 July, Waaree’s CEO Amit Paithankar said the effect would be mixed. However, on 17 October, Paithankar, in a call, said the company is ramping up its manufacturing capacity in the US.
“More and more of US demand will eventually be catered to from our facilities in the US… Having said that, there is a fair mix at this stage,” he noted.
Sweta Jain, analyst at Anand Rathi Share and Stock Brokers Jain said the US contributes about 20-25% to Waaree’s consolidated sales, whereas Premier has no exposure to that market.
Waaree also operates a module manufacturing facility in the US. With President Donald Trump imposing steep tariffs (effective rates of around 40% for India and over 400% for countries like Vietnam and Thailand), having local production gives Waaree a clear edge to service its order book without facing much pressure from tariff concerns, she explained.
India’s solar story isn’t just about Waaree and Premier anymore. The industry as a whole has its share of headwinds.
Solar module prices falling over 20-25% over the past one year have raised some concerns, said Rupesh Sankhe, vice president at Elara Capital. He also expects profitability pressures to emerge by FY29, as more players increase capital expenditure and expand their capacity.
“With large conglomerates like Tata and JSW entering the sector, competition is set to intensify further,” Sankhe added.
Execution and policy
Analysts warned that if Waaree’s efforts to vertically integrate in cells, ingots, and wafers do not scale up effectively, it could harm profitability and increase competitive pressures.
Some also said that the company’s aggressive foray into these capital-intensive areas raises execution and stabilization risks, which could affect timelines, costs, and near to medium-term financial performance.
However, the goods and service tax (GST) cut on solar modules, cells, and inverters from 12% to 5% could bring down overall project costs and give a strong push to consumer demand, analysts said.
Waaree, in its latest quarterly investor presentation, said lower GST will cut module and component costs by 3-4%.
Jain believes the industry’s shift from non-DCR to DCR modules will help limit margin pressure. DCR is domestic content requirement where solar modules are made using locally manufactured cells, while imported modules are used in non-DCR.
In addition, increasing backward integration among manufacturers, thereby reducing cost of production, is expected to cushion the impact further, she believes.
Catching up
Waaree posted a stellar 70% year-on-year jump in revenue for Q2FY26, with net profit more than doubling. Premier, on the other hand, reported a 20% rise in sales and a nearly 72% surge in net profit.
Jain of Anand Rathi expects Waaree’s revenue and profit after tax to grow 30% and 33% compounded annual growth rate (CAGR), respectively, during FY25-FY28. For Premier, she expects a compounded annual growth rate of 34% in sales and 31% in profit.
The valuation gap has already narrowed from 40% to 20%, and Jain expects Waaree to catch up completely over the next few years as returns and product profiles converge.
Having said that, shares of Premier Energies still lags about 22% below its 52-week high, whereas Waaree is just 11% short of reclaiming its one-year peak.
