Leading brokerage Anand Rathi has unveiled its top renewable energy (RE) stock recommendations for the upcoming September quarter earnings season, highlighting several companies with 'Buy' and 'Hold' ratings. Waaree Energies Ltd and Clean Max Enviro Energy Solutions Ltd are the brokerage's top two picks, with Suzlon Energy Ltd and Emmvee Photovoltaic Power Ltd also receiving 'Buy' calls.
Anand Rathi's Key Recommendations and Targets
- Suzlon Energy: 'Buy' rating with a 12-month target of Rs 39.
- Waaree Energies: 'Buy' rating with a 12-month target of Rs 2,399.
- Clean Max Enviro Energy Solutions: 'Buy' rating with a 12-month target of Rs 1,392.
- Emmvee Photovoltaic Power: 'Buy' rating with a 12-month target of Rs 297.
- Premier Energies: 'Hold' rating with a target of Rs 904.
- Acme Solar Holdings: 'Hold' rating with a target of Rs 447.
Conversely, Anand Rathi has issued a 'Sell' recommendation for Vikram Solar, setting a target price of Rs 152.
Q2 Outlook for the Renewable Energy Sector
The domestic brokerage expects Q2 FY27 to be a soft period for the renewable energy segment. Pressure is anticipated primarily on volume and non-Domestic Content Requirement (DCR) margins. Within the retail segment, schemes like PM-KUSUM and PM Surya Ghar are projected to outperform, benefiting from better realization compared to utility-scale projects.
For Independent Power Producers (IPPs), Q2 is seasonally weak, with solar Plant Load Factors (PLFs) typically declining during the monsoon period. This seasonal generation weakness, rather than any change in underlying fundamentals, is expected to result in a muted quarter for IPPs.
Capacity Additions and Market Challenges
Despite the cautious Q2 outlook, the momentum for RE capacity addition remains robust, with 7GW added during July-August, bringing the total installed RE capacity to 296GW. However, a shift in the Approved List of Models and Manufacturers (ALMM) applicability timeline for Commercial & Industrial (C&I) projects to December 2026 has led to some project execution and module procurement postponements, impacting volumes during the quarter.
Cost pressures are also a concern, with cell prices marginally inching up. This is expected to weigh more heavily on the non-DCR module segment, where Ebitda/Wp is projected to decline further below 2 cents. In contrast, DCR module profitability is anticipated to remain relatively stable at 6-7 cents/Wp.