Buy Vikram Solar Ltd for Target Rs323 by Elara Capitals
Attractively priced
Vikram Solar ( VIKRAMSO IN) , a leading company in India’s solar equipment manufacturing sector , is primed for domestic grow th via government incentives . Key drivers include: 1) module capacity doubling from 4.5GW to 17.5GW , and 2) expansion of cell capacity to 12.0GW for backward integration . It trad es at a 34-40% discount to Waaree Energies (WAAREEEN IN) and Premier Ene rgies (PREMIERE IN) . We initiate coverage of VIKRAMSO with a Buy rating and a TP of INR 323
Proven leader with steady expansion: The company is one of the largest domestic solar PV module producers , supported by an aggregate installed capacity of 9.5GW as on December’25 A 21 year track record powers steady expansion across three key facilities — Falta SEZ, Kolkata ( 3.2GW) , Oragadam, Chennai (1.3GW) , and Vallum , Tamil Nadu (5.0GW) . This geographic diversification drives scale efficienc y. Consistent capacity build up positions it well to meet rising demand in the domestic solar value chain.
Backward integration via largescale cell expansion: VIKRAMSO ’s upcoming investments emphasi ze on backward integration, with a decisive push into solar cell m aking to secure upstream control and enhance cost competitiveness. The company plans to add 6.0GW module and 12 .0GW cell capacity by FY27 . Th is signal s a strategic shift toward controlling critical upstream processes, curbs dependence on external suppliers, cuts cost, and bolsters competitiveness at home and abroad .
Diversified revenue with strong product capability and global footprint: The company operates across domestic modules, exports, EPC and O&M services to diversify revenue and strengthen margin. An advanced portfolio -- high -efficiency PERC, N -Type, and HJT solar modules (395 – 735Wp, 20.23% – 23.66% efficiency) -- with r obust testing and long -term warrant y. It has a strong presence across 22 States and 2 Union Terr itories, with distributors rising from 41 to 105 and dealers from 64 to 435. Clients include NTPC, NLC India , GIPCL, Adani Green, ACME Solar , AMPIN, Azure Power, and JSW Energy. Globally, it supplies modules to 39 countries via offices in the US and China, with ~ 8.7GW shipped to date, including ~ 3.4GW in the past th ree fiscals
Initiate with Buy and a TP of INR 323: We expect a revenue CAGR of 5 3% and an EBITDA CAGR of 62% during FY25 -28E . We initiate on VIKRAMSO with a Buy rating and a TP of INR 323, based on 8x FY 28E EV/EBITDA to factor in robust growth prospects and tailwinds. It trad es at a 34 -40% discount to Waaree Energies (WAAREEEN IN) and Premier Energies (PREMIERE IN) . Key risks include : 1) increased competition from large domestic firm s may put pressure on pricing & margin , and 2) heavy US market reliance heightens sensitivity to policy, tariff s, and geopolitical shifts.
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SEBI Registration number is INH000000933
