Broker’s call: Premier Energies (Buy)
The $1.2 billion FY26-28 capex program is under execution, with about 45% already spent. Peak debt could reach ₹5,000 crore, although management expects net debt/EBITDA to remain at 1.1-1.2x
Premier Energies is optimistic about the domestic solar market, aiming to achieve fully integrated capacity of 12-15GW by the fiscal year 2031. The company's solar segment is projected to contribute 70-75 percent of its business. The management anticipates a consolidation phase, with 4-5 key players emerging in the industry. Currently, the industry demand is estimated at around 60GW, with rooftop installations and PM-KUSUM contributing 45 percent.
DCR cell pricing is seen as attractive, and there are new growth opportunities in BESS, transformers, and overseas manufacturing. The company forecasts a 27 percent EBITDA compound annual growth rate (CAGR) over fiscal years 2026-2029. The management believes that a BESS-like localisation policy will soon be announced. Large new solar projects are increasingly being bundled with storage solutions.
Organic investment is favored for transformer expansion, although acquisitions may be considered if they meet the company's valuation criteria. The company's non-solar businesses could account for 25-30 percent of its revenue. The management is also keen on expanding manufacturing capabilities in Europe and the United States. The FY26-28 capital expenditure (capex) program is underway, with approximately 45 percent already spent.
The company's debt could potentially peak at ₹5,000 crore, but net debt/EBITDA is expected to remain within 1.1-1.2x. Despite a 20 percent correction over the past two months, Premier Energies has been recommended with a price target of ₹1,205.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
