JM Financial, a prominent brokerage firm, has released updated ratings and price targets for several key players in India's rapidly expanding renewable energy sector. The firm maintains a positive outlook on the industry's long-term growth, despite recent fluctuations in bidding activity.
Accelerated Growth and Evolving Landscape
India's renewable energy capacity additions have seen significant acceleration over the past three years. According to JM Financial, additions rose to 18.5 GW in FY24, 28.7 GW in FY25, and an impressive 51 GW in FY26. This surge was partly fueled by aggressive bidding, which expanded from 10-17 GW annually during FY20-FY23 to 52 GW in FY24 and 56 GW in FY25.
However, the brokerage notes a recent deceleration in bidding activity, which slowed to approximately 30 GW in FY26 and 9.34 GW in Q1 FY27. This indicates a slower start to the current fiscal year. Despite this, JM Financial projects India could still add substantial capacity in FY27, including 40-45 GW of solar, 7-8 GW of wind, and 24 GWh of Battery Energy Storage Systems (BESS).
The government's ambitious target is to achieve 500 GW of installed capacity from non-fossil sources, encompassing hydro, nuclear, and renewable energy, by 2030. India's current installed renewable energy base stands at 237 GW (excluding hydro), comprising 162 GW of solar, 57 GW of wind, 11 GW of biomass, and 7 GW from other sources.
Shift Towards Storage-Heavy Tenders
JM Financial highlights a material change in the technology mix within renewable energy tenders. While solar projects previously dominated auctions, their share has decreased as tenders increasingly favor hybrid projects, BESS, Firm and Dispatchable Renewable Energy (FDRE), or Round-The-Clock (RTC) projects, and pumped hydro for dispatchable power solutions. In Q1 FY27, 36 tenders were issued covering 9.34 GW, with a significant portion allocated to BESS, Pumped Storage Projects (PSP), and hybrid solutions, alongside wind and solar.
Project Pipeline and Future Outlook
An analysis of 580 under-construction renewable energy projects by the Central Electricity Authority (CEA) reveals 138 GW of capacity as of March 2026. This includes 85 GW of solar, 32 GW of wind, and 21 GW of hybrid projects. Of this pipeline, 76 GW (55%) has secured Power Purchase Agreements (PPAs), while 62 GW (45%) is yet to secure them. JM Financial projects 41.7 GW of this capacity to be commissioned in FY27, 18.6 GW in FY28, and 13.7 GW from FY29 onwards.
The brokerage cautions that moderate tendering since FY26 could lead to a decline in FY28 additions, projecting 25-30 GW of solar and 5-6 GW of wind. This underscores the critical need for converting the uncontracted pipeline into PPAs and a revival in new bidding beyond FY27 to maintain growth momentum.
Key Stock Ratings and Targets
JM Financial has provided specific recommendations and price targets for several companies in the renewable energy generation and equipment manufacturing space:
- BUY:
- Tata Power: Target Price Rs 450
- Suzlon Energy: Target Price Rs 64
- Premier Energies: Target Price Rs 1,324
- Emmvee: Target Price Rs 402
- CESC: Target Price Rs 207
- ADD:
- Adani Green: Target Price Rs 1,622
- Waaree Energies: Target Price Rs 3,296
- Inox Wind: Target Price Rs 92
- Vikram Solar: Target Price Rs 219
- REDUCE:
- ACME Solar: Target Price Rs 367
Disclaimer: This article provides market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.