Bernstein Downgrades Premier, Waaree Despite 'Good Companies'; Stocks Plunge

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AuthorAarav Shah|Published at:
Bernstein Downgrades Premier, Waaree Despite 'Good Companies'; Stocks Plunge
Overview

Brokerage firm Bernstein reiterated a bearish stance on Premier Energies and Waaree Energies, despite acknowledging their strengths. Shares of both solar sector players fell over 5% on Monday, January 5, as Bernstein cited an impending supply wave and softer demand, predicting margin compression beginning Q3 FY26. Waaree Energies' subsidiary also secured a ₹1,003 crore funding round, a point of contrast amidst the bearish outlook.

Brokerage's Bearish Outlook

Shares of Premier Energies Ltd. and Waaree Energies Ltd. saw significant declines on Monday, January 5, after Bernstein maintained its bearish outlook. The brokerage firm reiterated its cautious stance despite characterizing both companies as fundamentally strong.

Supply and Demand Concerns

Bernstein's core thesis centers on a substantial supply wave expected within the next 12-18 months. The firm believes the market is underestimating the potential for reduced demand. This outlook suggests solar additions may moderate, with domestic cell demand from utility-scale players potentially delayed until fiscal year 2028-2029, contrary to earlier expectations of fiscal year 2027.

Margin Compression Warnings

The brokerage explicitly warned that signs of margin compression for these companies could become apparent as early as the third quarter of fiscal year 2026 results. Bernstein cut its price target for Premier Energies to ₹718 from ₹780, while making a marginal upward revision to Waaree Energies' target, raising it to ₹2,109 from ₹2,087.

Analyst Consensus Contrasts

Premier Energies is covered by 12 analysts, with six recommending 'buy', two suggesting 'hold', and four advising 'sell'. Waaree Energies has coverage from 13 analysts, of which nine rate it a 'buy', and four a 'sell'.

Waaree Secures Funding

In a contrasting development, Waaree Energies announced that its subsidiary, Waaree Energy Storage Solutions, successfully closed a funding round worth ₹1,003 crore. The investment came from strategic investors, family offices, and high-net-worth individuals.

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