Kotak Institutional Equities
Target: ₹250
CMP: ₹223.80
We initiate coverage on with an Add rating and a DCFbased Fair Value of ₹250 (13.0X March 2028E EPS).
Our FV implies Emmvee capacity to see 10/15 per cent CAGR for module and cell capacities, respectively, 20/30 per cent volume CAGR for Emmvee’s module and cell volumes until FY2035, driven by capacity addition and utilisation levels of about 60 per cent for modules and 80 per cent for cells, a contraction of EBITDA margins from 34 per cent in FY2025 to 14 per cent in FY2035, factoring in heightened competitive intensity, a cost of equity of 14.5 per cent and WACC of 11.6 per cent and terminal value of 1.5X FY2035 book value (in line with Chinese solar companies’ valuations).
Emmvee is currently setting up a 6 GW integrated cell and module manufacturing unit, which will take its total capacity to 16.3 GW and 8.9 GW module and cell, respectively, making it the fourth largest player in India.
Given the implementation of ALMM list II from June 1, 2026, this will enable Emmvee to benefit from superior profitability relative to peers in the medium term.
Key risks: Lack of diversification away from the solar PV module value chain, increasing margin risks, changes in the domestic policy environment, delay in getting cell capacity on stream, slower-than-expected growth in renewable capacity addition and faster-than-expected ramp-up of competitors’ cell capacities.