Jefferies Buys Emmvee PV Stock, Eyes 70% Solar Boom Gain

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AuthorKavya Nair|Published at:
Jefferies Buys Emmvee PV Stock, Eyes 70% Solar Boom Gain
Overview

Jefferies initiates 'Buy' on Emmvee Photovoltaic Power with a ₹320 target, implying 70% upside. The brokerage forecasts robust EPS growth driven by India's booming solar sector, projecting a 24% CAGR in installations fueled by favorable economics and policy support like DCR and ALMM.

Jefferies Initiates 'Buy' on Emmvee Photovoltaic Power

Jefferies has launched coverage on Emmvee Photovoltaic Power with a 'Buy' recommendation and a price target of ₹320 per share. This target suggests a potential 70% appreciation from its recent closing price of ₹187.8. The brokerage notes the stock is currently trading at a significant discount to its industry peers.

Strong Solar Sector Outlook

The initiation is underpinned by a bullish outlook for India's solar sector. Projections indicate a 24% compound annual growth rate (CAGR) for annual solar PV installations between FY25 and FY28, reaching an estimated 65 GWdc in FY28 from 34 GWdc in FY25. Key growth drivers include solar energy's increasingly competitive economics against thermal power and the rise of solar-plus-storage solutions.

Favorable Policy Environment

Policies such as the Approved List of Models and Manufacturers (ALMM) and Domestic Content Requirement (DCR) are bolstering domestic module manufacturers. These regulations reserve eligibility in government schemes for local players, tighten cell availability, and consequently boost prices and profitability. The note suggests similar protections for ingot and wafer segments could offer medium-term support.

Emmvee's Strategic Advantages

Emmvee Photovoltaic Power's strengths include an early adoption of TOPCon technology, with 3 GW operational since September 2024. Its profitability, boosted by DCR norms, and a well-funded balance sheet are noted as key advantages supporting expansion and backward integration plans. The company aims to scale its cell capacity to 8.9 GW and module capacity to 16.3 GW by the end of FY27.

Profitability Projections

Despite an anticipated normalization of industry profitability as domestic capacities rise, Jefferies expects Emmvee to maintain high-teen steady-state returns on capital employed (RoCE). This resilience is attributed to its scale and integration strategies. The brokerage forecasts a 56% EBITDA CAGR over FY25-28, even with projected compression in earnings before interest, tax, depreciation, and amortization per watt-peak (Ebitda/Wp).

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