Vikram Solar has received a buy rating from Prabhudas Lilladher with a target price of ₹326, as the solar module manufacturer demonstrates strong growth momentum and expands its manufacturing capabilities. The brokerage maintains its positive outlook on the company's strategic positioning in India's renewable energy sector.

Strong Operational Performance

The company delivered impressive growth metrics during the recent quarter, with module sales expanding significantly across different time periods.

The quarter witnessed full execution of non-DCR (Domestic Content Requirement) orders, contributing to the robust sales performance. This execution capability demonstrates the company's operational efficiency and market positioning.

Manufacturing Capacity Expansion

Vikram Solar has made substantial progress in scaling its manufacturing infrastructure. The company successfully commissioned its 5GW module plant in Vallam, bringing total manufacturing capacity to 9.5GW. This expansion represents a significant milestone in the company's growth trajectory.

The company has revised its capacity expansion targets to align with backward integration strategies:

Supply Chain Strategy

Currently, the company imports cells from China to maintain cost advantages. However, Vikram Solar is evaluating Southeast Asia as an interim source for approximately one year before transitioning to in-house cell manufacturing. This strategic approach balances cost optimization with supply chain diversification.

Battery Energy Storage Systems Initiative

The board has approved a substantial ₹44 billion capex for Battery Energy Storage Systems (BESS), marking the company's entry into the energy storage segment.

Financial Projections and Valuation

Prabhudas Lilladher projects strong financial performance for Vikram Solar over the forecast period FY26-28E:

The brokerage maintains its buy recommendation with a target price of ₹326, unchanged from previous estimates. The valuation is based on 5.5x EV of March 2028E EBITDA, reflecting confidence in the company's growth prospects and operational capabilities in the expanding solar energy market.

Vikram Solar has announced a comprehensive investment plan worth ₹10,700 crores to expand its manufacturing capabilities over the next 24-30 months. This significant capital allocation represents a major strategic initiative aimed at strengthening the company's position in the renewable energy sector.

Investment Allocation Strategy

The company's investment plan is structured across two primary manufacturing segments, with a clear timeline and funding strategy:

Manufacturing Expansion Focus

The investment strategy demonstrates Vikram Solar's commitment to expanding across critical components of the renewable energy value chain. The allocation of ₹6,400 crores toward modules and cells manufacturing represents the larger portion of the investment, reflecting the company's focus on strengthening its core solar panel production capabilities.

The battery manufacturing segment will receive ₹4,300 crores, indicating the company's strategic move to diversify into energy storage solutions. This expansion aligns with the growing demand for integrated renewable energy systems that combine solar generation with storage capabilities.

Funding Requirements

The company has outlined its funding strategy for this ambitious expansion:

Strategic Timeline

Vikram Solar has established a 24-30 month timeline for implementing this comprehensive investment plan. This extended timeframe allows for systematic capacity building and ensures proper integration of new manufacturing capabilities across both product segments.

The company's requirement for ₹2,400 crores from internal funds demonstrates its financial planning approach and commitment to supporting the expansion through available resources. This internal funding component represents approximately 22.4% of the total investment value.