Solar stocks: Why Elara prefers Vikram Solar, Emmvee over Waaree & Premier Energies

Elara Capital has initiated coverage on four of India’s foremost renewable energy equipment manufacturers: Waaree Energies, Premier Energies, Emmvee Photovoltaic Power, and Vikram Solar. The sector’s integration and government incentives are seen as key growth drivers, though overcapacity and export bottlenecks are weighing on valuations and margin expectations.

“We initiate coverage on four key renewables equipment makers – Waaree Energies, Premier Energies with Accumulate ratings; Vikram Solar and Emmvee Photovoltaic Power ) with Buy ratings. Waaree and Premier have corrected 33% and 40%, respectively, from peaks. Current valuations factor in oversupply and margin risks; however, these firms’ integration would drive sustained high growth for the next 2-3 years. Vikram Solar and Emmvee trade at 35-40% discount to Waaree and Premier,” it said.

India’s solar module capacity has surged to about 144GW and is projected to reach 180GW by FY30. However, annual installations are likely to be just 45–50GW, compared to a module output of 60–65GW. This supply–demand mismatch, along with US tariffs restricting exports, has led to consolidation pressures, especially for smaller and pure-play module producers.

“Overcapacity risk from supply–demand mismatch in solar module: India’s solar manufacturing ecosystem has scaled rapidly, with module capacity hitting ~144GW (operational) and projected at ~180GW by FY30; cells stood at ~23.4GW (Source: MNRE). Annual solar installations may reach a mere 45–50 GW vs module output of 60–65GW, creating overcapacity situation. US tariffs have curbed exports, flooding the domestic market and adding pressure on smaller and pure-play module producers toward consolidation, it noted.

Despite these challenges, India’s renewable energy sector is bolstered by ambitious government targets. The Central Electricity Authority has set a goal of 500GW of renewable energy capacity by CY30, with solar expected to contribute significantly. As of FY25, renewable energy accounts for 49% of the nation’s power mix, with solar capacity growing at a 39% CAGR between FY14 and FY26 YTD, said the brokerage.

“Tailwinds persist with ambitious RE goals: India targets 500GW RE capacity by CY30. Within a total power mix of 514GW, RE contributes 49% (Source: Central Electricity Authority). Solar leads at 136GW, registering a CAGR of 39% during FY14-26 YTD vs wind’s 8% during the same period. Momentum builds via policy support, increased adoption of solar-plus-battery projects, and government initiatives, pushing solar capacity to 364GW by FY32,” said Elara Capital.

The market now vertically integrated manufacturers that control more of the supply chain, especially as policy shifts increase demand for locally produced solar cells. The ALMM List-II and mandates for domestic cells from June 2026 are expected to stimulate further integration and capacity expansion.

“Vertically integrated leaders gain supply chain edge: Oversupply in module outstrips near-term demand, pivoting India’s solar module industry from rapid capacity addition to backward integration and manufacturing maturity, Manufacturers that build and stabilise large-scale cell capacity ahead of peers, potentially before FY28 – such as under coverage companies like Waaree, Premier, Vikram Solar, and Emmvee- hold a significant advantage, saud Elara.

Waaree Energies is identified as India’s leading solar module manufacturer with a 14.1% domestic market share in FY25. Supported by diversification into BESS, inverters, green hydrogen, and acquisitions, Elara assigns Waaree Energies an ‘Accumulate’ rating and a target price (TP) of Rs 3,309. The stock has corrected 20% over six months, reflecting overcapacity concerns and margin compression, with margin gains capped at around 19–20%.

Premier Energies has got an ‘Accumulate’ rating with a TP of Rs 886. The company, expanding into battery energy storage systems and aluminium-frame production, faces margin risk from intensifying competition. Its stock has corrected 33% from its peak, with the current valuation already factoring in overcapacity risks.

Emmvee Photovoltaic Power is a top integrated solar PV module and cell manufacturer, with early adoption of TOPCon technology and a strong presence in both B2G and B2B segments. Elara initiates a Buy rating and a TP of Rs 320 for Emmvee, noting the stock trades at a 34–40% discount to Waaree Energies and Premier Energies. Vikram Solar is also rated Buy, with a TP of Rs 323, as the company aims to more than triple its module capacity and expand cell capacity to 12GW for backward integration. Both Emmvee and Vikram Solar are considered attractive on valuation, trading at substantial discounts to industry leaders.