India solar PV: Indian solar PV players trade at a premium to global peers despite convergence among domestic cell makers

Overview

This short valuation note compares Indian solar PV manufacturers by enterprise value per gigawatt of capacity and benchmarks them against global producers. Bernstein argues that domestic cell-maker valuation dispersion has narrowed, but Indian players still command premiums over global peers.

Core views

Bernstein revisits a chart published a year earlier that highlighted a large valuation gap between large and small Indian solar PV players. Since then, the gap among cell manufacturers has converged: covered Waaree and Premier have corrected, while non-covered Emmvee has re-rated. The report concludes that companies with operating cell capacity now trade at broadly aligned valuations, assuming their execution plans are delivered on schedule. Premier is presented as carrying more execution certainty because its plant is already operating in the trial phase. The note distinguishes module-only companies from integrated cell manufacturers. Although module-only players look inexpensive relative to peers, Bernstein frames their valuation as dependent on whether they can build cell plants on time and participate during the favorable early phase for cell economics. Using enterprise value per gigawatt of cell, ingot-wafer and polysilicon capacity, Bernstein finds Indian players expensive relative to global competitors. Waaree Energies is shown at US$0.47bn EV/GW with 15GW operating capacity for FY27E, Premier Energies at US$0.43bn EV/GW with 11GW, and Emmvee at US$0.76bn EV/GW with 3GW. In contrast, Chinese peers trade at much lower EV/GW levels amid massive oversupply: Tongwei at US$0.04bn, LONGi Green and Jinko at US$0.05bn, Trina at US$0.07bn, JA at US$0.05bn, GCL at US$0.02bn and Daqo at US$0.03bn. Bernstein notes that these valuations are below the capital-expenditure levels needed for manufacturing plants in India. The global comparison also includes First Solar, at US$0.25bn EV/GW and 23GW operating capacity, and Canadian Solar, at US$0.12bn EV/GW and 32GW. Even against these US-based or US-expanding producers, Bernstein concludes Indian players trade at a reasonable premium. The report therefore does not identify an Indian solar PV player as plainly cheap on this relative-capacity measure; instead, it emphasizes execution, capacity timing and the sustainability of cell economics. The disclosure valuation framework gives separate company methodologies: Waaree is valued at 10x FY28 EV/EBITDA for an INR 2,539 target, Premier at 10.5x FY28 EV/EBITDA for an INR 814 target, Tata Power through a sum-of-the-parts framework for an INR 430 target, and ReNew through DCF for a US$8 target. ReNew’s DCF incorporates existing and pipeline projects plus future sector market share, assumes 12% cost of equity and 9% cost of debt, and assumes about 5% market share after 2029 with WACC+2% returns for projects beyond that point.

Analysis framework

Bernstein uses two comparative valuation charts: EV/GW to relate enterprise value to manufacturing capacity across Indian and global solar producers, followed by company-specific valuation methods disclosed for its covered names. The analysis focuses on relative valuation, operating and planned capacity, execution timing, and differences between integrated cell makers and module-only players.

Methodology notes

• Valuation methodsEV/EBITDA valuation

  Enterprise value per gigawatt comparison and FY28 EV/EBITDA multiples

  The report compares producers’ enterprise values against manufacturing capacity to assess relative valuation, while valuing Waaree and Premier using FY28 EV/EBITDA multiples.

• Valuation methodsSOTP (Sum-of-the-Parts) Valuation

  Tata Power sum-of-the-parts valuation

  Tata Power is valued by separately assessing regulated operations, the Mundra cluster, solar PV manufacturing and EPC, Haldia, renewables, transmission, pumped storage and joint ventures.

• Valuation methodsDCF (Discounted Cash Flow)

  ReNew discounted cash flow valuation

  ReNew’s valuation incorporates existing and pipeline projects and assumed future market share, discounted using stated equity and debt costs.

• Industry AnalysisSupply-demand framework

  Global solar manufacturing oversupply

  Bernstein uses Chinese industry oversupply to explain why Chinese peers trade at far lower EV/GW valuations than Indian players.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Waaree Energies (WAAREEEN.IN)

  Covered Indian solar PV manufacturer assessed on relative capacity valuation.

  Strengths

  Operating cell capacity; valued at 10x FY28 EV/EBITDA.

  Weaknesses

  Its valuation has corrected and remains at a premium to global peers on EV/GW.

  Comparison

  FY27E EV/GW of US$0.47bn versus much lower China-based peer levels.

  Risks

  Planned Indian cell-module capacity may be delayed; solar PV manufacturing margins may compress.

• Premier Energies (PREMIERE.IN)

  Covered Indian solar PV manufacturer assessed on relative capacity valuation.

  Strengths

  Plant is already in trial phase, providing greater execution certainty; valued at 10.5x FY28 EV/EBITDA.

  Weaknesses

  Its valuation has corrected; successful and timely capacity ramp remains important.

  Comparison

  FY27E EV/GW of US$0.43bn, broadly aligned with Waaree’s US$0.47bn.

  Risks

  Delays in planned manufacturing capacity or weaker cell economics.

• Tata Power (TPWR.IN)

  Covered company with solar PV manufacturing, EPC and renewable businesses valued through SOTP.

  Strengths

  Diversified regulated, renewable, transmission and storage portfolio.

  Weaknesses

  Solar PV margins face potential supply-glut and soft-demand pressure.

  Comparison

  Valued through separate multiples and DCF across business components rather than EV/GW alone.

  Risks

  Mundra PPA uncertainty, slower rooftop solar, reduced subsidies, project land/transmission constraints and pumped-storage PPA challenges.

• ReNew (RNW)

  Covered renewable-energy company valued using DCF.

  Strengths

  Valuation includes existing projects, pipeline projects and future sector growth.

  Weaknesses

  Future returns depend on project execution, financing and market-share assumptions.

  Comparison

  Uses a DCF rather than manufacturing-capacity EV/GW valuation.

  Risks

  Slower project commissioning, transmission constraints and curtailment, rupee depreciation, slower rate declines, refinancing challenges and solar-manufacturing margin compression.

Key data

• Waaree Energies FY27E EV/GWUS$0.47bn15GW operating capacity
• Premier Energies FY27E EV/GWUS$0.43bn11GW operating capacity
• First Solar EV/GWUS$0.25bn23GW operating capacity
• Canadian Solar EV/GWUS$0.12bn32GW operating capacity
• Waaree valuation10x FY28 EV/EBITDAINR 2,539 price target
• Premier valuation10.5x FY28 EV/EBITDAINR 814 price target
• ReNew DCF assumptions12% cost of equity; 9% cost of debtAbout 5% market share assumed for projects beyond 2029

Impact & implications

The report suggests that valuation convergence has reduced the earlier domestic cell-maker arbitrage, while Indian solar PV valuations remain elevated relative to global producers. Execution of cell capacity, the timing of wafer-import restrictions, rooftop-solar support and manufacturing margins remain central to the relative valuation case.

Risks

• Planned Indian solar cell-module manufacturing capacity may not arrive on time because of equipment-import or visa challenges.
• A faster-than-expected decline in solar PV manufacturing margins could pressure Tata Power and other participants.
• Rooftop solar additions could slow or government subsidy support could be reduced.
• Renewable and pumped-storage additions may face land and transmission constraints.
• ReNew faces risks from slower project commissioning, curtailment, rupee depreciation, slower interest-rate declines and hold-co bond refinancing.

What to watch

• Timing of planned Indian cell-module manufacturing capacity additions.
• Potential early restrictions on solar-wafer imports.
• Whether the rooftop solar scheme is extended beyond FY27.
• Progress in battery manufacturing and other new ventures.
• Tata Power’s Mundra PPA signing and treatment of coal-mine profits in tariffs.