Reduce Premier Energies Ltd for Target Rs 947 by Elara Capital
Capacity expansion to drive the next growth leg
Premier Energies (PREMIERE IN) reported strong revenue and earnings growth, with revenue increasing 43.3% YoY to INR 26,319mn and reported PAT rising 30.8% YoY to INR 4,624mn, although EBITDA margin declined to 28% , due to higher raw material s and employee cost. Cell production increased to 916MW with a 99% utilization , while module utili zation remains subdued at 55%. Manufacturing capacity stood at 10.6GW for cells and 11.1GW for modules, with an orderbook of INR 166bn. We retain Reduce with a lower TP of INR 947.
Strong yearly growth, margin pressures evident:
Revenue from operations increased 43.3% YoY and 6.9% QoQ to INR 26,319mn.Cost of materials rose 38% YoY and 18.2% QoQ to INR 18,945mn. Employee expense s surged 64% YoY and 30.7% QoQ to INR 639mn. EBITDA jumped 31.2% YoY and 3% QoQ to INR 7,358mn, while EBITDA margin declined to 28.0% vs 31 .0% in Q2FY26 and 29 .0% in Q1FY27 . Finance cost increased 30% YoY but fell 3.9% QoQ to INR 422mn. Depreciation and amorti zation expense s declined 20% YoY but rose 22% QoQ to INR 1,166mn. Other income slumped 71% YoY and 46.3% QoQ to INR 242mn. Reported PAT surged 30.8% YoY but shrank 2% QoQ to INR 4,624mn.
Strong utilization for cells; module utilization under pressure:
Cell production increased to 916MW YoY from 507MW YoY, while module production rose to 1,199MW from 961MW. Capacity utili zation improved to 99% for cells, while module utili zation declined to 55% during Q2FY27. Manufacturing capacity stood at 10.6GW for cells and 11.1GW for modules as on Q2FY27 . Orderbook stood at INR 166bn (10,729MW), with new orders worth INR 42.2bn secured during the quarter.
Expansion planned across verticals:
The 7GW cell plant is nearing commercial production, with N -type TOPCon G12R technology and targeted efficiency of 25.8 %. BESS expansion progressed with construction of the 6GWh Phase 1 facility underway, targeting commissioning by July 2027. The i ngot wafer plant development is underway, with 5GW capacity to be commission ed by December 2027 , and the balance by December 2028. The aluminium frame facility is under development, with commissioning targeted for September 2027. The t ransformer business recorded production of 761MVA and an orderbook of INR 3.3bn, including Neotrafo. Neotrafo expansion saw 4 .0GVA capacity commissioned, with the remaining 6 .0GVA expected by December 2026.
Retain Reduce with a lower TP of INR 947:
Among India’s largest solar equipment manufacturers, PREMIERE is set to lead by FY28. This transition would be driven by: 1) scaling up module capacity to 11.1GW and cell capacity to 10.6GW, and 2) adding 10GW each of ingot & wafer capacity. We retain Reduce but lower our TP to INR 947 from INR 1,052 on 12x FY28 E EV/EBITDA based on margin compression, subdued utilization , and industry - wide oversupply of solar modules. We lower our earnings by 4% for FY27E, 9% for FY28E, and 8.7% for FY29 E after factoring in margin pressure.
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SEBI Registration number is INH000000933
