The gains come after global brokerage firm Jefferies initiated coverage on the stock with a Buy rating and a target price of Rs 320, a 60% upside from current levels, citing strong growth visibility, policy support and attractive valuations.
Analysts at Jefferies suggest that India’s annual solar installations grow at a 24% CAGR between FY25 and FY28, largely aided by falling solar tariffs, rising power demand and the increasing adoption of battery energy storage systems.
According to Jefferies, solar power tariffs have consistently remained below the cost of new thermal power over the past four years, making solar the preferred option for utilities and industrial consumers.
The recent discovery of solar-plus-storage tariffs in the Rs 3–3.5 per unit range has further strengthened the renewable energy proposition. These tariffs imply battery storage costs of Rs 4.5–5 per unit, which still compare favourably with marginal thermal power tariffs of Rs 5.4–5.8 per unit. Notably, solar-plus-storage contracts lock in prices for 25 years, unlike thermal power where costs escalate annually.
Against this backdrop, Jefferies expects solar to emerge as the dominant renewable energy source in India, with annual installations projected to rise to 65 GW by FY28, from around 34 GW in FY25. Policy support continues to be a key driver for domestic manufacturers, with measures such as the Approved List of Models and Manufacturers (ALMM) and domestic content requirements for public sector projects effectively reserving a significant portion of the market for Indian players.
Within this context, Emmvee stands out due to its early adoption of high-efficiency TOPCon cell technology. The company is among the first in India to operationalise large-scale TOPCon cell capacity, with 3 GW already operational since September 2024. Its collaboration with Germany’s Fraunhofer Institute and the use of German-sourced equipment are expected to help maintain competitive operating costs.Emmvee is also expanding capacity aggressively, with Jefferies estimating its cell and module capacities to increase to 8.9 GW and 16.3 GW, respectively, by FY27. Unlike some peers, the company remains focused on the core solar value chain and does not plan to diversify into batteries or inverters.
While the brokerage cautions that domestic oversupply could pressure margins over the medium term, it expects industry profitability to stabilise by FY28 as inefficient capacities shut down and stricter efficiency norms are implemented. Even after normalisation, Emmvee is expected to deliver high-teen returns on capital.
On the financials, Jefferies forecasts a 56% EBITDA CAGR over FY25–FY28, driven by strong volume growth despite some margin compression. At current levels, the stock trades at a ~50% discount to peers, leading Jefferies to value Emmvee at 9x forward EV/EBITDA. Key risks include weaker-than-expected domestic solar demand and the possibility of all announced capacities becoming operational.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)