Stock to Buy: Solar Stock with 28% Upside by JP Morgan

Synopsis: JPMorgan maintains an “overweight” rating on Premier Energies with a Rs. 915 target, citing strong domestic solar demand, ALMM‑II regulatory support, limited export risk, and potential margin impact from rising local capacity.

The shares of this company are specialised in manufacturing integrated solar cells and solar panels. Its product portfolio includes solar cells, solar modules, monofacial and bifacial modules, as well as EPC and O&M solutions are in focus after JP Morgan gave an overweight rating with 28 percent upside from the current levels.

With a market capitalisation of Rs. 32,488 cr, the shares of Premier Energies Ltd closed at Rs. 717.20 per share, up by 1.6% from its previous close of Rs. 706.05 per share. The stock has experienced a decline of 20% over the past year, is down 15% year-to-date, has fallen 28% in the last six months, and decreased 9% in the past month. 

JP Morgan on Premier Energies 

Brokerage firm JPMorgan has maintained an “overweight” rating on Premier Energies with a target price of Rs. 915, implying roughly 28% upside from current levels. 

This positive stance reflects strong confidence in the company’s positioning to benefit from robust domestic solar demand drivers, attractive valuation relative to fundamentals, and policy support favoring local manufacturers. 

Regulatory Tailwinds from ALMM List‑II

One of the key demand catalysts highlighted by JPMorgan is the implementation of the Approved List of Models and Manufacturers (ALMM) List‑II for solar cells, effective from June 1, 2026. 

Under this framework, solar projects supported by government programs must source modules from domestically approved manufacturers. This regulatory requirement greatly strengthens demand for locally produced solar cells and modules, directly benefiting Premier Energies and other Indian solar manufacturing players by reinforcing local content usage in utility and government‑linked projects.

Limited Export Exposure Reduces Risk

JP Morgan noted that the recent US tariffs on solar cells and panels from India, Laos, and Indonesia are expected to increase local cell availability. The US Commerce Department imposed these duties, citing government subsidies that give these Asian manufacturers an unfair pricing advantage over domestic producers. This move aligns with broader efforts over the past decade to protect US solar manufacturing and curb low-cost imports tied to Chinese supply chains.

The company confirmed that it currently has no export exposure. The company also highlighted that new cell and module capacities will come online through 2026, which should help sustain and potentially grow earnings, even with some impact on margins. 

Supply Growth Could Affect Pricing Premiums

While demand prospects are strong, JPMorgan also cautioned that the rapid expansion of local solar cell manufacturing capacity could moderate pricing advantages that domestic producers currently enjoy. 

Several Indian manufacturers are scaling up capacity at a brisk pace, and if supply ramps up significantly faster than near‑term demand, pricing premiums could compress, potentially impacting margins. 

Premier Energies Ltd is a leading Indian renewable energy firm known particularly for manufacturing high‑efficiency solar photovoltaic (PV) cells and modules and offering end‑to‑end clean energy solutions.  

Its Q3 Dec 2025 financials showed healthy year‑over‑year growth. Sales rose 13 % to Rs. 1,936 crore from Rs. 1,713 crore in Q3FY25. EBITDA increased 15 % to Rs. 593 crore from Rs. 514 crore. 

The company delivered a strong profit performance, with net profit up 54 % to Rs. 392 crore from Rs. 255 crore and EPS rising 53 % to Rs. 8.65 from Rs. 5.66 compared with Q3FY25. 

It currently has a production output of 956 MW in modules and 593 MW in cells. Its annual manufacturing capacity stands at 5.1 GW for modules and 3.2 GW for cells, reflecting strong scaling potential. The company also has an order book of 9.4 GW, equivalent to approximately Rs. 13,700 crore, indicating healthy forward demand and robust business visibility.

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