Whalesbook
Strong Growth Trajectory
Fujiyama Power Systems is showing strong revenue growth, with revenue, EBITDA, and adjusted PAT expanding at compound annual growth rates of 45%, 78%, and 76% respectively from FY22 to FY25. Motilal Oswal has started coverage with a 'Buy' rating and a ₹340 price target, suggesting a 31% upside from its current trading price of about ₹260. This highlights the company's solid performance, but the brokerage's valuation method, used in a market without direct listed rivals, needs closer examination.
Growth Drivers
Motilal Oswal's positive outlook is based on Fujiyama's use of the PMSGMBY scheme and its DCR plant, which are expected to meet strong demand for solar and energy storage. Government programs like PM-KUSUM and 'PM Surya Ghar: Muft Bijli Yojana' are also boosting this demand, creating a favorable market. The company's backward integration into DCR cell manufacturing is set to improve profit margins. Alongside this, expansion into Li-ion batteries and inverters, plus a growing distribution network, strengthens its market presence and ability to generate revenue. The stock currently trades around ₹260, within its 52-week range of ₹172 to ₹269.99, with recent trading volumes showing steady investor interest.
Valuation Method
Motilal Oswal's valuation for Fujiyama Power Systems differs from typical methods because there are no directly comparable listed companies. The brokerage used an average of valuation multiples from the consumer durables, solar, and battery manufacturing sectors. For estimated FY28 earnings per share (EPS), the average peer P/E is about 24x. Considering Fujiyama's scale, a discount of roughly 37% is applied, leading to a target P/E of 15x for FY28E EPS and the ₹340 price target. This approach is important given market trends. The Nifty Consumer Durables index is valued at a P/E of about 61.12, and the Nifty Renewable Energy sector at around 28.1x. Battery companies like Exide Industries trade at a P/E of roughly 34.20x, while solar component makers like Solar Industries India have much higher multiples, often over 80x. Fujiyama's current P/E, based on FY25-FY28 earnings forecasts, is between 27.8x and 41.1x. This places it within a wide range for industrial and energy component makers, though at a premium to some renewable energy rivals. The company's strong historical growth and projected future CAGRs of 56-65% for revenue, EBITDA, and PAT from FY25-28 support its valuation, with expected FY28 RoE and RoCE at 33% and 28% respectively. The company's market capitalization stood at approximately ₹7,900 crore as of April 2026.
Valuation Concerns
The lack of a direct listed competitor makes valuation challenging. Using an average from different sectors like consumer durables, solar, and batteries introduces subjectivity, potentially over or undervaluing Fujiyama compared to its closest rivals, even with a discount. The company's IPO in November 2025 was priced at ₹228, with a post-issue market capitalization of about ₹6,986 crore. Motilal Oswal's ₹340 target price offers a significant increase, but it implies a FY28E P/E multiple that could seem high compared to some broader sector averages, especially if growth slows. Fujiyama operates in a competitive market. Waaree Energies reported FY25 revenues of ₹14,444 crore, while Fujiyama's FY25 revenues were ₹15,406 crore. Although Fujiyama's revenue was higher in FY25, it's still establishing itself. The company shows strong profitability with an ROE of 39.4%, but its EBITDA margin of 16.13% is average among competitors, indicating room for operational improvements.
Outlook
Fujiyama Power Systems is set to benefit from India's fast-growing solar and renewable energy sector, driven by government policies and rising clean energy adoption. The company's focus on backward integration, expanding capacity, and growing its network are crucial for sustained performance. Motilal Oswal's 'Buy' rating and ₹340 target price show confidence in Fujiyama's strategy and financial targets. However, the valuation method, which uses related peer groups, means investors should closely watch execution and market conditions.