Solar manufacturing companies expect demand to increase after India’s second list of approved models and manufacturers (ALMM List-II) took effect from June 1. Under this new policy all major solar projects in India must now source solar cells from approved domestic manufacturers featured in ALMM List-II. This second list comes after the successful rollout of ALMM List-I for solar modules.
Financial services group, JM Financial said that since projects will have to source both cells and modules from domestic manufacturers, companies that are integrated across the value chain from cells to modules are likely to benefit from lower costs and better product quality.
JM Financial believes the policy will trigger consolidation in an industry that currently has more than 120 solar module manufacturers, but only 13 approved cell manufacturers.
Cell makers gain importance
JM Financial noted that India has over 210 GW of installed solar module manufacturing capacity, while domestic solar cell capacity stands at only around 30 GW.
“With cells becoming the new differentiator in India’s crowded solar value chain, we expect the industry to consolidate, favouring players with capital and capability,” JM Financial said.
Cell manufacturing capacity is expected to increase to 60-70 GW by FY28, but the industry is likely to see weaker players exit as policy support increasingly shifts towards companies with deeper backward integration.
JM Financial’s top pick
Solar panel maker Emmvee remained JM Financial’s preferred stock in the solar manufacturing space, followed by Premier Energies, Waaree Energies and Vikram Solar.
JM Financial has maintained its ‘Buy’ rating on Emmvee. The brokerage firm has revised its target price of Rs 377 on the stock, implying an upside of 24%.
“Emmvee is seen as the most experienced TOPCon cell manufacturer commanding an EBITDA/Wp of Rs 5.8 driven by 51% integration level in FY26, approximately rising to 59% by FY28,” JM Financial noted. TOPCon stands for Tunnel Oxide Passivated Contact – a more energy-efficient solar cell manufacturing architecture.
Premier Energies upgraded to BUY
JM Financial upgraded Premier Energies to ‘Buy’ from ‘Reduce’ with a revised target price of Rs 1,220. The brokerage cited the company’s strong backward integration, consistent margins and industry-leading cell-to-module ratio for its upgrade.
“Premier has the highest EBITDA/Wp of INR 6.7 due to higher integration levels of 64% in FY26,” JM Financial said.
Waaree Energies upgraded on integration benefits
JM Financial also upgraded Waaree Energies to ‘Add’ from ‘Reduce’ and increased its target price to Rs 3,509 from Rs 2,912. JM Financial said the company stands to benefit from higher backward integration as it expands cell-manufacturing capacity.
Vikram Solar
The brokerage retained its ‘Reduced’ rating on Vikram Solar, citing concerns over its lack of in-house cell manufacturing and rising execution risks under the new ALMM regime. “With the ALMM List-II effective from 1st June 2026, Vikram faces elevated execution risks,” JMFL said.
Conclusion
JM Financial expects ALMM List-II to transform India’s solar industry, driving consolidation and strengthening vertically integrated manufacturers. JM Financial also expects the government to move ahead with ALMM List-III as well, which will extend domestic sourcing requirements to ingots and wafers.
The brokerage said the government’s decision to implement ALMM List-II despite industry demands for a postponement suggests that the next phase is likely to remain on schedule for June 2028.
“As policy focus increasingly shifts to capex and capability-intensive integration – cells from June 2026 and ingots/wafers likely from June 2028 – the industry will witness consolidation, exit of weaker manufacturers and a gradual move towards oligopoly,” the report said.
Disclaimer
Investment recommendations, ratings, and target prices discussed in this article are solely the views of the issuing brokerage firm, JM Financial, and do not reflect the editorial stance of this publication. Equity investments are subject to significant market risks, and policy changes like the ALMM regime can uniquely impact sectoral volatility. FinancialExpress.com advises readers to consult a SEBI-registered financial advisor before making any buy, sell, or hold decisions based on market targets or ratings.
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