Motilal Oswal has started coverage on solar manufacturer Saatvik Green Energy with a target price of ₹565. The brokerage report highlights the company's aggressive expansion plans in module and cell production. Investors may track the company's progress on building backward integration in the solar supply chain through FY29.
Motilal Oswal has initiated coverage on Saatvik Green Energy Limited, setting a price target of ₹565. This move follows the company’s recent growth strategy focused on expanding its solar manufacturing footprint. As of the end of fiscal year 2026, the company reported an installed module manufacturing capacity of 4.8 gigawatts (GW), centered primarily at its facility in Ambala, Haryana.
The brokerage’s outlook is driven by the company’s plans to scale up operations significantly over the next few years. Saatvik Green Energy is working toward increasing its module manufacturing capacity to 8.8GW by the end of fiscal year 2027. Additionally, the company is diversifying into cell manufacturing, targeting a capacity of 2.4GW by FY27, which is slated to rise to 6GW by FY28.
Strategic Backward Integration Plans
A central part of the company’s long-term plan is moving into the upstream segments of the solar value chain. By entering the ingot-wafer manufacturing segment, the company aims to reduce reliance on external suppliers for critical raw materials. The company has outlined plans to establish 6GW of capacity in the ingot-wafer segment by fiscal year 2029. This strategy of backward integration is intended to give the company more control over its production costs and supply chain stability.
Investor Context and Risks
While expansion plans suggest a focus on increasing market share, investors should consider the capital requirements for such large-scale projects. Building out module, cell, and ingot-wafer facilities involves substantial money spent on expansion, which can lead to higher debt if funded through borrowing. The company's ability to maintain healthy profit margins will depend on how efficiently it can manage these new capacities and navigate potential fluctuations in the global price of solar components.
The solar manufacturing sector in India is currently seeing high levels of activity as companies aim to meet domestic demand and benefit from government support. However, the sector is also subject to risks such as changes in import duties, availability of raw materials, and intense competition from both domestic and international players. The success of the company’s roadmap will depend on its ability to execute these projects within the planned timelines and achieve the expected level of production efficiency. Investors may monitor the company’s upcoming quarterly filings for updates on project execution and its debt profile.