Premier Energies: Jefferies raises target on robust Rs 14,000 crore order book 

The brokerage turned more positive after the solar equipment maker reported March quarter earnings that came in ahead of estimates. Strong margins, silver price hedging and healthy order visibility supported the performance. Jefferies also retained its positive outlook on the renewable energy sector as power demand recovery and energy security concerns continue to support solar demand.

Jefferies said Premier Energies Ltd. reported EBITDA and profit after tax that were 5% and 21% ahead of its estimates respectively. The brokerage added that strong revenue visibility over FY27 and the first half of FY28 supports confidence in future growth.

Premier Energies Q4  earnings ahead of estimates

Jefferies said Premier Energies reported revenue of Rs 2,230.3 crore during the March quarter. That was broadly in line with estimates and marked a 38% year-on-year rise.

Quarterly EBITDA stood at Rs 674.8 crore, up 28% year-on-year. Profit after tax rose 64% from a year ago to Rs 456.8 crore. Both numbers came in ahead of Jefferies estimates.

The brokerage said silver price hedging helped the company protect margins during the quarter. EBITDA margin declined only 40 basis points sequentially despite pressure from softer realisations.

“Silver price hedging has supported margin,” Jefferies said.

Jefferies also noted that lower-than-expected depreciation and finance costs helped support profitability during the quarter.

Cell production rises sharply, module capacity expands

Premier Energies continued to report strong operational growth during the quarter. Jefferies said solar cell production rose 59% year-on-year to 722 megawatt after the company added 0.4 gigawatt debottlenecked PERC capacity.

The brokerage said calculated realisation stood at 26.5 US cents per watt peak during the quarter. EBITDA per watt peaked at 8 US cents.

Premier Energies also commissioned a 5.6 gigawatt TOPCon module line in March FY26. The company’s total module manufacturing capacity has now increased to 11.1 gigawatt. Management expects full ramp-up of the expanded capacity over the next few months.

“Management expects complete ramp up of the expanded capacity in the next couple of months,” Jefferies said.

Order book gives strong revenue visibility

Jefferies said Premier Energies’ order book remained flat sequentially at 9.4 gigawatt during the March quarter. However, the value of the order book increased 2% to Rs 14,000 crore.

The brokerage said deliveries scheduled over the next 12 to 18 months provide strong visibility for revenue growth and profitability.

“Deliveries in the next 12–18 months provide strong revenue/Ebitda visibility for the company,” Jefferies said.

Jefferies also pointed out that the company’s entire order book is domestic. That insulates Premier Energies from tariff-related risks in the US market.

The brokerage expects module capacity to grow to 11.1 gigawatt, while production could reach 6.6 gigawatt by FY28.

Working capital rises, debt expected to increase

Jefferies said Premier Energies’ working capital cycle expanded during FY26 as the company increased inventories to protect margins and lock in raw material costs.

Working capital days rose from 66 days to 88 days year-on-year. Operating cash flow declined 6% year-on-year to Rs 1,261.1 crore.

The brokerage said Premier Energies ended FY26 with net debt of Rs 1,213.9 crore. The company plans to invest nearly Rs 10,000 crore during FY27 and FY28 combined.

Jefferies expects the company’s net debt-to-equity ratio to rise from 0.28 times in FY26 to 0.8 times in FY28. Despite that, return ratios are expected to remain healthy. Return on capital employed stood at 25% in FY26.

Jefferies remains positive on renewable demand outlook

The brokerage said geopolitical developments in the Middle East and concerns around energy security could accelerate renewable energy deployment globally. Jefferies also expects power demand recovery in India during FY27 to support solar installations.

“A favourable base and a likely El Nino is expected to boost power demand growth in FY27 aiding renewable demand,” Jefferies said.

Jefferies has broadly retained its FY27 and FY28 EBITDA estimates. The brokerage expects EBITDA to grow at a compounded annual growth rate of 33% between FY26 and FY28.

The report added that valuation remains attractive as the stock is trading nearly one standard deviation below its historical average valuation band.

Premier Energies: Revenue, profit estimates remain strong

Jefferies expects Premier Energies’ revenue to rise to Rs 13,020.2 crore in FY27 from Rs 7,824.4 crore in FY26. Revenue is projected to increase further to Rs 15,216.9 crore in FY28.

The brokerage expects EBITDA at Rs 3,590.1 crore in FY27 and Rs 4,183.8 crore in FY28. Profit after tax is estimated at Rs 2,084.4 crore for FY27 and Rs 2,122.6 crore for FY28.

Jefferies values Premier Energies at 13 times FY28 EV/EBITDA and has derived a target price of Rs 1,135 per share.

Conclusion

Jefferies’ latest report suggests the brokerage remains constructive on Premier Energies as strong order visibility, rising module capacity and healthy demand outlook continue to support growth expectations. While higher working capital and rising debt remain areas to watch, the brokerage believes strong execution and expanding manufacturing capacity could keep the stock in focus among renewable energy counters.

Disclaimer:

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