JPMorgan has maintained its neutral rating on Premier Energies with a target price of ₹1,100 per share following a detailed site visit and management interaction. The brokerage said the company remains confident about the medium-term industry utilisation outlook, even as headlines point to a sizeable potential oversupply in solar cells. According to JPMorgan, Premier Energies believes that the magnitude of oversupply may not be as severe as feared, as several new entrants face execution bottlenecks, funding constraints, and delays in commercial ramp-up, which could temper the pace at which new capacity meaningfully enters the market.
Despite the recent slowdown in solar tendering activity and concerns around possible cancellations, Premier Energies indicated that firm utility-scale orders in the system are adequate to support industry-level utilisation for the next two to three years. The company also expects its scale, vertical integration and operating track record to help it maintain a competitive edge over smaller and less integrated peers as the market evolves. JPMorgan acknowledged that the company’s strategy of deploying current cash-flow strength to diversify and build new product lines is prudent and aligns with long-term industry trends.
However, the brokerage flagged that the aggressive build-out of manufacturing capacity across the domestic solar value chain could eventually exert structural pressure on margins. This expectation, it said, has already weighed on Premier’s stock multiples since listing and is likely to continue influencing investor sentiment until supply-side clarity improves. As a result, JPMorgan prefers to stay on the sidelines despite the company’s strong positioning and execution capabilities.
Disclaimer: The views and recommendations above are those of JPMorgan. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
