2 days ago
Bernstein Favors Tata Power Over Waaree and Premier
Bernstein studied three Indian renewable-energy companies.
It gave Tata Power the most favorable rating, called Outperform.
Tata Power is valued mainly by estimating its future profits.
Bernstein gave Waaree Energies and Premier Energies Underperform ratings.
These two companies are judged partly by how much solar manufacturing capacity they plan to build.
Waaree has a higher value per planned capacity unit than Premier.
However, planned factories only help if they are completed and begin operating.
Bernstein warned that equipment imports and visa problems could cause delays.
The report also said wafer imports, rooftop solar policies, and battery manufacturing could affect the companies’ prospects.
Bernstein rates Tata Power Outperform with a Rs 430 target price and 18.8% implied upside.
Waaree Energies receives an Underperform rating and a Rs 2,538 target price, implying 3.4% upside.
Premier Energies receives an Underperform rating and a Rs 814 target price, implying 10.2% downside.
Waaree is valued at about 0.5 times FY27 and FY28 exit-cell capacity, compared with Premier’s 0.4 times.
Bernstein says equipment-import and visa issues could delay planned solar manufacturing capacity, making execution a key risk.
- Who
- Bernstein assessed Tata Power, Waaree Energies, and Premier Energies.
- What
- The brokerage compared their valuations, earnings prospects, and planned solar manufacturing capacity.
- Where
- The analysis concerns India’s solar manufacturing and renewable-energy sector.
- When
- The estimates focus on FY27 and FY28.
- Why
- Bernstein examined whether planned capacity and projected earnings justify the companies’ valuations.
Tata Power’s Earnings Case
Solar Manufacturers’ Capacity Case
Basis for valuation
Tata Power’s Earnings Case
Tata Power is assessed through projected earnings and valuation, with Bernstein estimating FY27 EPS of Rs 14.91 and FY28 EPS of Rs 17.26.
Solar Manufacturers’ Capacity Case
Waaree Energies and Premier Energies are assessed partly through enterprise value per gigawatt of planned exit-cell and cell-plus-ingot capacity.
Investment view
Tata Power’s Earnings Case
Bernstein rates Tata Power Outperform and assigns it a Rs 430 target price.
Solar Manufacturers’ Capacity Case
Bernstein rates both Waaree Energies and Premier Energies Underperform, despite Waaree’s target implying a small upside from the report’s reference price.
Main uncertainty
Tata Power’s Earnings Case
Tata Power’s case depends on its projected earnings and the valuation applied to them.
Solar Manufacturers’ Capacity Case
The manufacturers’ cases depend on whether planned capacity is commissioned on schedule and contributes to earnings.
Key facts
- Tata Power rating
- Outperform
- Tata Power target
- Rs 430, implying 18.8% upside
- Waaree Energies rating
- Underperform
- Waaree target
- Rs 2,538, implying 3.4% upside
- Premier Energies rating
- Underperform
- Premier target
- Rs 814, implying 10.2% downside
- Key execution risk
- Equipment-import and visa issues could delay planned solar cell-module manufacturing capacity.
Quotes
Bernstein
Brokerage whose India Solar PV report evaluates the three renewable-energy stocks
“Among cell players, large players premium has come down.”
financialexpress.com
“Only modules today – but can they execute as per plan?”
financialexpress.com
Sources
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