Target: ₹395
CMP: ₹297.05
We initiate coverage on Emmvee Photovoltaic Power Ltd (EMMVEE) with a ‘Buy’ rating and a target price of ₹395, valuing the company at 7.5x its 4-quarter ending Sep-28 EEBITDA.
Emmvee is among India’s leading integrated solar PV module and cell manufacturers with 10.30 GW of module capacity and 2.94 GW of cell capacity, with further capex and backward integration plans. It is among the pioneers of the high-efficiency TOPCon technology in India, thus catering to the market’s deficit in TOPCon capacity.
It is enlisted in ALMM List I and List II, enabling it to supply to projects with DCR mandate. Being among the larger players in a fragmented market and an early mover in technology adoption and backward integration has helped the company to benefit from the industry tailwinds.
This is reflected in its strong order book and better margins. We expect the company will continue to see these benefits, as India continues its focus on achieving its renewable energy targets.
Emmvee is currently trading at 6.2x 1-year fwd EV/EBITDA. It trades at 5.7x FY28E EBITDA, which is at about 6 per cent discount to the industry average of 6x, and a significant 28/41 per cent discount, respectively, to Waaree and Premier’s corresponding multiples. Considering the strong growth expectation and further benefit from backward integration, we value the company at an EV/EBITDA multiple of 7.5x based on 4-quarter ending Sep-28E EBITDA, arriving at a target price of ₹395.