Emmvee Photovoltaic Power shares extended their rally for a second consecutive session, gaining as much as 8.50% to hit an intraday high of ₹217.00 on January 7. The stock has surged 17% over the past two sessions, driven by positive analyst coverage and optimistic sector outlook.

Jefferies Initiates Coverage with Buy Rating

The rally gained momentum after global brokerage firm Jefferies initiated coverage on the stock with a Buy rating and a target price of ₹320.00, representing a 60% upside from current levels. The brokerage cited strong growth visibility, policy support, and attractive valuations as key factors supporting their bullish stance.

India's Solar Sector Growth Outlook

Jefferies analysts project robust growth for India's solar sector, expecting annual solar installations to grow at a 24% CAGR between FY25 and FY28. This growth is expected to be driven by falling solar tariffs, rising power demand, and increasing adoption of battery energy storage systems.

According to the brokerage, solar power tariffs have consistently remained below the cost of new thermal power over the past four years, making solar the preferred option for utilities and industrial consumers. The recent discovery of solar-plus-storage tariffs in the ₹3.00–₹3.50 per unit range has further strengthened the renewable energy proposition.

Emmvee's Competitive Positioning

Emmvee stands out in the sector due to its early adoption of high-efficiency TOPCon cell technology. The company is among the first in India to operationalise large-scale TOPCon cell capacity, with 3.00 GW already operational since September 2024. Its collaboration with Germany's Fraunhofer Institute and the use of German-sourced equipment are expected to help maintain competitive operating costs.

The company is expanding capacity aggressively, with Jefferies estimating significant growth in both cell and module capacities by FY27. Unlike some peers, Emmvee remains focused on the core solar value chain and does not plan to diversify into batteries or inverters.

Financial Projections and Valuation

Jefferies forecasts a 56% EBITDA CAGR over FY25–FY28, driven by strong volume growth despite some margin compression. The brokerage expects industry profitability to stabilise by FY28 as inefficient capacities shut down and stricter efficiency norms are implemented. Even after normalisation, Emmvee is expected to deliver high-teen returns on capital.

At current levels, the stock trades at approximately 50% discount to peers, leading Jefferies to value Emmvee at 9x forward EV/EBITDA. However, the brokerage cautions that domestic oversupply could pressure margins over the medium term.

Policy Support Drives Domestic Manufacturing

Policy support continues to be a key driver for domestic manufacturers, with measures such as the Approved List of Models and Manufacturers (ALMM) and domestic content requirements for public sector projects effectively reserving a significant portion of the market for Indian players. These supportive policies are expected to benefit companies like Emmvee that focus on domestic manufacturing capabilities.

Emmvee Photovoltaic Power shares surged in early trade as Jefferies initiated coverage with a buy rating, positioning the company at the center of India's accelerating solar build-out phase. The brokerage set an ambitious price target of ₹320, suggesting significant upside potential of 73% from current levels.

Market Performance and Valuation

The stock demonstrated strong momentum, rising as much as 9.62% to ₹202.70 during the session before paring gains to trade 5.46% higher at ₹195.01 as of 9:35 AM. Jefferies notes that the stock currently trades at approximately 50% discount to industry peers, presenting an attractive valuation opportunity.

India's Solar Growth Trajectory

Jefferies projects robust growth in India's solar sector, forecasting installations to expand at a 24% CAGR over FY25-28. The brokerage expects annual solar PV installations to reach 65GWdc in FY28, up from 34GWdc in FY25. This growth is driven by multiple factors including falling tariffs, increased energy storage adoption, and strong policy support.

The shift toward solar plus battery energy storage systems represents a major catalyst, with solar tariffs remaining cheaper than new thermal tariffs for the past four years. Solar energy is expected to dominate India's renewable expansion in the coming years.

Policy Support and Market Protection

Strong policy tailwinds are supporting domestic manufacturers through ALMM rules and Domestic Content Requirement norms, which have effectively ring-fenced the domestic market for Indian companies. These policies have created a shortage of domestic cell capacity, resulting in higher module prices and improved profitability across the sector.

Technological Leadership and Competitive Advantages

Emmvee stands out as a technological early mover, being only the second company in India to adopt high-efficiency TOPCon cells. The company has 3GW operational capacity since September 2024 and has partnered with Fraunhofer, Germany, for PV cell process equipment selection and optimization.

The company's German-sourced cell line offers lower operating costs compared to Chinese equipment, providing a sustainable competitive advantage. Jefferies highlights several key strengths:

• Early entry into TOPCon technology
• Superior DCR-driven profitability
• Adequately funded balance sheet
• Elevated margins in the DCR market
• Strong cash flows to fund expansion and backward integration

Risk Factors

Jefferies cautions about potential risks including weak domestic solar demand and the possibility that all announced industry capacities materialize, which could worsen oversupply conditions. These factors could impact the overall sector dynamics and individual company performance.

The stock has declined 10.80% since its listing in November 2024, but the current analyst coverage suggests strong recovery potential based on the company's technological positioning and India's favorable solar market outlook.