The solar energy stocks are in focus – Ambit Capital has retained its ‘Buy’ ratings on Suzlon Energy and Saatvik Green Energy while maintaining a ‘Sell’ on Premier Energies and assigning a ‘Sell’ rating to Emmvee Photovoltaic Power, as a surge in solar manufacturing capacity threatens to put pressure on margins across the industry.

The brokerage’s September 24 report says the solar PV industry is entering a more difficult phase after a period of unusually high returns. Ambit Capital expects RoIC to fall to 19-21% from more than 40% as cell and module spreads weaken, working-capital requirements rise and companies continue to add capacity.

Within the four stocks covered, Ambit Capital sees a sharp difference in the earnings outlook. Suzlon Energy remains its positive wind-power call, while Saatvik Green Energy gets a ‘Buy’ as its new cell line moves towards commercial production. Premier Energies and Emmvee Photovoltaic face greater pressure from easing cell shortages and lower spreads.

Ambit Capital on Suzlon Energy: ‘Buy’

Ambit Capital has retained its ‘Buy’ rating on Suzlon Energy with a target price of Rs 59, implying an upside of 40% according to the brokerage’s valuation table.

The brokerage’s view on Suzlon is different from its assessment of the solar manufacturers because the company is primarily exposed to the wind-power cycle. Ambit Capital’s main concern is that slower power demand could affect the pace of wind capacity additions and, in turn, the company’s order book.

Ambit Capital said, “Slowing growth in wind addition. Continued slowdown in power demand could mean lower wind capacity additions, thereby impacting order books.”

The brokerage is valuing Suzlon through a DCF approach, with the Rs 59 target corresponding to 31x FY28 earnings.

Ambit Capital on Saatvik Green Energy: ‘Buy’

Ambit Capital has retained its ‘Buy’ rating on Saatvik Green Energy with a target price of Rs 480, implying an upside of 8% according to the brokerage’s valuation table.

The central part of the Saatvik story is its 2.4 GW cell manufacturing line. Ambit Capital expects the facility to move towards higher utilisation through FY27, making its ramp-up important for the company’s future earnings.

Ambit Capital said, “Everything rests on the 2.4GW cell line. Management has ALMM-II inspection scheduled for September, ramp from end-Aug/early-Sep and 80% utilisation by 4QFY27; we build 25%/55% utilisation levels in 3Q/4Q, yielding 0.41GW solar cells in FY27 and 2.52GW in FY28.”

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The brokerage also takes a different view of the ALMM-II deferral for Saatvik, arguing that the delay could give the company time to get its own cell line running before the domestic-cell premium becomes more meaningful.

Ambit Capital said, “The ALMM-II deferral to Jan’27 is, counter-intuitively, helpful – it delays the domestic-cell premium into the window when Saatvik’s own line is running, narrowing the gap to Premier and Emmvee rather than widening it.”

Saatvik has also secured a Rs 1,040 crore SECI order for PV modules, which Ambit Capital expects to support utilisation as the company scales its manufacturing operations.

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Ambit Capital on Premier Energies: ‘Sell’

Ambit Capital has maintained its ‘Sell’ rating on Premier Energies and cut its target price to Rs 825 from Rs 899. The revised target implies a downside of 10% according to the brokerage’s valuation table.

The brokerage believes the period of tight domestic cell supply that supported Premier’s margins is coming to an end. New capacity is entering the market, while the ALMM-II extension has pushed out part of the C&I cell demand that could have absorbed additional supply.

Ambit Capital said, “We earlier expected utilisation to rise and peak in 3Q, but now believe it has already peaked and should moderate to sub-80% by year-end. We slightly cut our margin estimates by 5% for Premier considering awards at 15% lower vs existing prices. String order book with advances will provide some protection to Premier vs falling spreads.”

Ambit Capital has cut its FY27-FY29 EBITDA estimates by 3%, 5% and 6%, respectively, while PAT estimates have been reduced by 4%, 7% and 8%. The brokerage expects the company’s existing order book and customer advances to provide some support as pricing conditions become less favourable.

Ambit Capital on Emmvee Photovoltaic Power: ‘Sell’

Ambit Capital has assigned a ‘Sell’ rating to Emmvee Photovoltaic Power and cut its target price to Rs 315 from Rs 380. The revised target implies a downside of 5% according to the brokerage’s valuation table.

The brokerage expects Emmvee to become one of India’s larger PV manufacturers, but sees the company facing greater pressure as new domestic capacity comes through. The ALMM-II extension could also make it harder for new DCR orders to carry the spreads seen during the recent period of tight supply.

Ambit Capital said, “We expect Emmvee to be among the leading PV manufacturers in India with a 9GW/16GW cell/module capacity by FY28. With the ALMM List-II extension, new order inflows for DCR modules/cells are likely to come at lower spreads. The order book provides some resilience against falling prices.”

Ambit Capital has cut its FY28 EBITDA estimate for Emmvee by 17% and its FY28 PAT estimate by 19%. For FY29, EBITDA and PAT estimates have both been reduced by 10%.

Solar capacity is running ahead of demand

The broader concern in Ambit Capital’s report is the pace of capacity additions across the solar manufacturing industry. India already has around 230 GW of module capacity, while the brokerage estimates annual demand of 65-84 GW over FY27-32.

The brokerage expects the imbalance to become more visible as new plants start operating. Its model shows effective module utilisation falling to around 33-34% from FY29, while cell utilisation is expected to remain below 60%.

Ambit Capital’s assessment is based on a capital-cycle framework that looks at what happens when high returns attract a large amount of fresh capacity.

Ambit Capital said, “Peak returns are the trigger for the entry that competes them away; thus, high returns are a starting condition rather than a comfort.”

The brokerage said the Indian solar PV industry currently meets all six conditions in its framework, including record returns, capacity running ahead of plausible demand, capital employed growing faster than the profit pool, low entry barriers, heavy equity issuance and new companies entering the industry.

Cell shortages are starting to ease

Ambit Capital said the earlier shortage of domestic solar cells had pushed prices and spreads higher, benefiting manufacturers such as Premier Energies and Emmvee. That period is now beginning to change as new capacity comes online.

The brokerage said, “With the ALMM extension, however, supply tightness should ease, and spreads should moderate.”

The report points to August cell production of 2.87 GW as an early indication that domestic supply is increasing faster than previously expected. Ambit Capital annualises that production at about 34.4 GW, already above its FY27 domestic cell-demand estimate of around 30 GW.

Recent DCR module awards also point to lower pricing. Ambit Capital cited awards to Saatvik Green and Kosol Energie at Rs 18.2 per watt and Rs 18.6 per watt, respectively, while a domestic cell order from Avaada to Vikram Solar was priced at Rs 12.5 per watt.

Working capital could add to the strain

Ambit Capital also expects working-capital requirements to rise as the customer mix changes. Retail and rooftop customers generally pay around delivery, while utility IPPs, C&I developers and EPC intermediaries can take 60-90 days to pay and may retain part of the amount.

As the mix moves towards these customers, the brokerage expects receivable days to rise.

Ambit Capital said, “As the DCR-driven rooftop and KUSUM boom normalises and utility/C&I takes share, receivable days migrate toward the utility norm.”

The brokerage pointed to Emmvee’s debtor days, which increased from 30 to 50 in FY26. It also expects inventory requirements to rise as manufacturers add cell capacity and eventually move further into the ingot-wafer chain.

Technology changes raise another question

Ambit Capital also examined depreciation assumptions in the FY26 annual reports of Premier, Emmvee and Saatvik. The brokerage’s concern is that rapid changes in solar technology could require manufacturers to upgrade equipment much sooner than traditional asset lives suggest.

Ambit Capital said, “An asset facing a forced technology decision every five to seven years is not a 25-year asset.”

The brokerage noted that Mono-PERC, which was dominant until about two years ago, has been displaced by TOPCon, while newer technologies are also developing. It said converting a PERC line to TOPCon costs about 40% of the original line capex, making technology upgrades an important consideration for manufacturers.

Ambit’s take on key solar and wind stocks

Ambit Capital’s September 24 report retains ‘Buy’ ratings on Suzlon Energy and Saatvik Green Energy. The brokerage maintains ‘Sell’ ratings on Premier Energies and Emmvee Photovoltaic PowerThe brokerage’s broader view is that India’s solar manufacturing industry is moving from a period of tight supply and strong margins towards one where additional capacity could put pressure on pricing and returns. 

Disclaimer: This article is based solely on Ambit Capital’s September 24, 2026 research report and presents the brokerage’s ratings, target prices, estimates and views. The upside and downside figures stated in the article are those given in Ambit Capital’s valuation table and have not been calculated using external market data. Ratings, earnings estimates and target prices can change with business performance, industry conditions, valuation assumptions and other developments. Target prices are not assured returns, and securities can gain or lose value. Readers should review the original research report and independently assess the risks and suitability of any security before making financial decisions.