Premier Energies Limited, one of India’s leading integrated solar cell and module manufacturers, declared its financial results for the second quarter of fiscal year 2026 (September 2025) on October 28, 2025. The company demonstrated robust year-over-year growth in revenue and profitability, though a closer examination reveals that the impressive profit surge was significantly aided by inventory gains and other income rather than core operational improvements.
Executive Summary: Q2 FY26 Financial Performance Overview
Premier Energies reported consolidated revenue from operations of ₹1,836 crore for Q2 FY26, representing a 20% year-over-year increase from ₹1,527 crore in Q2 FY25. The company’s profit after tax (PAT) surged by an impressive 72% to ₹353 crore compared to ₹206 crore in the same quarter last year. Earnings per share (EPS) rose to ₹7.89, up 38% from ₹5.71 in Q2 FY25.
While these headline numbers appear encouraging at first glance, deeper analysis reveals that approximately ₹200 crore of the profit growth stemmed from non-operational factors including inventory gains of ₹283 crore (up from ₹130 crore year-over-year) and increased other income. This suggests that the underlying operational performance may not be as robust as the top-line figures suggest.
Detailed Financial Analysis: Revenue, Expenses, and Profitability
Revenue Performance: Steady Growth with Modest Sequential Gains
Premier Energies’ total income for Q2 FY26 reached ₹1,869 crore, maintaining near-flat performance compared to ₹1,870 crore in Q1 FY26, but showing significant 20% year-over-year growth. The revenue from operations of ₹1,836 crore reflected only marginal 0.8% quarter-over-quarter growth from ₹1,821 crore in the previous quarter.
The company’s revenue growth has been primarily driven by its solar modules business, which contributed approximately 74% of total revenue, while the solar cells segment accounted for 23% during recent quarters. The remaining revenue came from diversified segments including aluminum frames and engineering, procurement, and construction (EPC) services.
Despite strong year-over-year comparisons, the sequential revenue stagnation raises questions about the company’s growth momentum heading into the second half of fiscal year 2026.
Expense Management: Mixed Signals from Cost Control
Total expenses for Q2 FY26 stood at ₹1,454 crore, representing a modest 0.8% decrease from ₹1,466 crore in Q1 FY26 but a 13.7% increase year-over-year from ₹1,278 crore. The controlled sequential expense trajectory appears positive on the surface, but the substantial contribution from inventory gains significantly distorted the expense picture.
Inventory changes contributed approximately ₹283 crore in benefits during Q2 FY26, more than double the ₹130 crore benefit in Q2 FY25. This accounting adjustment effectively reduced the reported cost of goods sold, making operational expenses appear more controlled than they actually were from a cash flow perspective.
Operating Profit and Margin Compression
Operating profit (EBITDA) for Q2 FY26 is estimated at approximately ₹415 crore, showing only marginal 2% year-over-year growth despite the 20% revenue increase. More concerning is the substantial 24.3% quarter-over-quarter decline from ₹548 crore in Q1 FY26.
EBITDA margins contracted significantly during the quarter. While Q1 FY26 saw impressive margins of 30.2%, Q2 FY26 margins compressed to approximately 22-23%, representing a concerning deterioration. This margin compression occurred even as the company benefited from substantial inventory gains and other income, suggesting underlying operational challenges.
The year-ago Q2 FY25 quarter saw EBITDA margins of 26.2%, indicating that despite revenue growth, the company has been unable to maintain its historical profitability levels.
Profit After Tax: Impressive Growth Driven by Non-Core Factors
Premier Energies reported PAT of ₹353 crore for Q2 FY26, up 72% year-over-year and 14.6% quarter-over-quarter. PAT margins improved to approximately 19% from 13.5% in Q2 FY25, demonstrating significant profitability expansion.
However, this impressive profit performance must be contextualized by the substantial contributions from:
- Inventory Gains: Approximately ₹283 crore compared to ₹130 crore year-ago, representing an incremental benefit of ₹150 crore
- Other Income: While declining sequentially from ₹49 crore to approximately ₹33 crore, other income remained elevated compared to historical levels
Industry analysts have noted that when adjusting for these non-operational items totaling approximately ₹200 crore, the underlying profit growth appears significantly more modest. This raises sustainability concerns regarding future profitability trajectories, particularly if inventory benefits normalize in subsequent quarters
Business Segment Performance and Operational Highlights
Solar Modules Division: Core Revenue Driver
The modules business remained Premier Energies’ primary growth engine, contributing 74% of consolidated revenue during the quarter. The company has been scaling up its module manufacturing capacity, having recently commissioned a 1.2 GW TOPCon solar cell manufacturing line with investments of ₹642 crore.
This new facility produces high-efficiency 620W DCR (Domestic Content Requirement) compliant TOPCon modules using N-Type G12R technology. TOPCon technology offers superior efficiency compared to traditional Mono PERC cells, positioning Premier Energies competitively in the rapidly evolving solar manufacturing landscape.
Solar Cells Business: Strategic Capacity Expansion
The cells division accounted for 23% of revenue, benefiting from the commissioning of the new 1.2 GW TOPCon line that increased total solar cell production capacity from 2 GW to 3.2 GW. The company is working aggressively to enhance cell manufacturing capacity to 8.4 GW by June 2026 as part of its broader Mission 2028 strategy.
Premier Energies’ focus on vertically integrated manufacturing from ingots and wafers through cells to modules aims to capture value across the entire solar manufacturing value chain while reducing dependence on imported components.
Order Book Strength: Domestic Market Dominance
As of the June 2025 quarter end, Premier Energies maintained a robust order book of ₹8,602 crore, with 100% of orders sourced from the domestic Indian market. This order book expanded by over ₹2,000 crore within a two-month period to reach approximately ₹10,500 crore by September 2025.
The entirely domestic order composition reflects both the strength of India’s solar energy demand and potential vulnerability to policy changes affecting domestic content requirements. The company has virtually no export exposure currently, with less than 1% of its order book coming from international markets including the United States.scanx+2
Comparative Analysis: Q2 FY26 vs Previous Quarters
Quarter-over-Quarter Trends
Comparing Q2 FY26 to Q1 FY26 reveals several concerning trends:
- Revenue stagnation: Only 0.8% sequential growth suggests potential demand softness or execution challenges
- Margin compression: EBITDA margins contracted from 30.2% to approximately 22-23%, representing significant profitability deterioration
- Operating profit decline: EBITDA fell 24.3% quarter-over-quarter despite flat revenues
- Other income decline: Other income decreased 32.6% from ₹49 crore to ₹33 crore
These sequential trends indicate that the momentum established during Q1 FY26 weakened considerably during the September quarter, despite the strong year-over-year comparisons.
Year-over-Year Performance
The year-over-year comparison to Q2 FY25 presents a more favorable picture:
- Revenue growth of 20% demonstrates solid top-line expansion
- PAT growth of 72% showcases impressive profitability improvement
- EPS increase of 38% reflects strong per-share value creation
- Inventory gains more than doubled, contributing significantly to profit growth
However, the outsized contribution of inventory accounting and other non-operational factors means that the underlying core business performance improvement may be considerably more modest than headline figures suggest.
Industry Context: India’s Solar Energy Sector in 2025
Market Growth and Government Support
India’s solar energy sector experienced remarkable growth during 2025, adding 23.8 GW of solar capacity in fiscal year 2024-25, with 16.59 GW coming from ground-mounted utility-scale projects. The momentum accelerated further in the current fiscal, with 21.68 GW added in just six months (April-September 2025), of which 16.14 GW was utility-scale.
India generated record solar and wind power during the first half of 2025, with solar power growing by 17 terawatt-hours (25% increase) and pushing solar’s share in India’s total electricity generation to 9.2% from 7.4% year-over-year. This growth was accompanied by a significant 24 million tonne reduction in power sector emissions.
The government’s ambitious target of achieving 500 GW of renewable energy capacity by 2030 continues to drive investment and capacity expansion across the sector. Corporate funding for India’s solar sector reached a remarkable $17.3 billion between January and September 2025, reflecting strong investor confidence.
Manufacturing Capacity Expansion
India’s solar manufacturing ecosystem evolved rapidly toward self-reliance during 2025. Solar photovoltaic module manufacturing capacity expanded from 38 GW in March 2024 to 74 GW in March 2025, reaching 100 GW under the Approved List of Models and Manufacturers (ALMM) framework by August 2025. Solar cell manufacturing capacity increased to 27 GW during the same period.
Policy support measures including the Production Linked Incentive (PLI) Scheme and ALMM framework facilitated this rapid expansion. However, challenges persist, particularly regarding export dependence on the United States (which accounts for 99% of India’s solar module exports) and continued reliance on Chinese imports for cost-competitive components.
Competitive Landscape
Premier Energies operates in an increasingly competitive environment alongside major players including Waaree Energies, Adani Green Energy, Tata Power, JSW Energy, and NTPC. Among solar manufacturers specifically, Waaree Energies has emerged as the dominant player with significantly larger production capacity and a more established global footprint.
Comparative analysis suggests that while Waaree Energies achieved revenue growth of 41.69% during 2020-2024 with high ROCE of 43.6% and ROE of 33.4%, Premier Energies demonstrated a more modest 5-year CAGR of 27.12% while facing margin challenges and employing higher financial leverage for aggressive expansion. However, Premier’s ROE improved dramatically to 43.7% in FY2024 with ROCE of 25.2%, demonstrating the company’s improving financial efficiency
Strategic Initiatives and Future Outlook
Capacity Expansion Roadmap: Mission 2028
Premier Energies has articulated an ambitious Mission 2028 strategy targeting integrated manufacturing capacity of 10 GW across the entire value chain from ingots to modules, along with 12 GWh of battery energy storage systems (BESS) and 3 GW of inverter capacity.
The company aims to achieve the following capacity targets:
- Ingots and Wafers: 10 GW annual capacity within the next three years
- Solar Cells: 8.4 GW by June 2026, scaling to 10 GW thereafter
- Solar Modules: 11.1 GW capacity by FY2028
- Aluminum Frames: 36,000 metric tons annually to support module production
- Inverters: 3 GW capacity through joint ventures and acquisitions
- Battery Storage: 12 GWh BESS capacity
This integrated approach aims to capture value across multiple stages of the solar value chain while reducing import dependence and supporting India’s Atmanirbhar Bharat (self-reliant India) initiative
Capital Expenditure Plans
Premier Energies is executing a substantial ₹12,500 crore capital expenditure program over the next three years to indigenize the entire solar manufacturing value chain. This massive investment underscores the company’s commitment to vertical integration and technological advancement.
Strategic Partnerships and Acquisitions
In October 2025, Premier Energies announced two strategic acquisitions:
- KSolare Energy: A 51% stake acquisition in this inverter producer to expand into critical balance-of-system components
- Transcon: A 51% stake in this transformer manufacturer to strengthen electrical infrastructure capabilities
These acquisitions align with Premier’s diversification strategy beyond pure solar cell and module manufacturing into complementary technologies essential for complete solar power systems.
Additionally, the company entered a joint venture agreement with Taiwan-based Sino-American Silicon Products (SAS) in May 2025 to manufacture and sell silicon solar wafers in India, with Premier holding a 74% equity stake. The joint venture plans to establish a 2 GW wafer manufacturing facility to produce advanced solar wafers for domestic and global markets.
Technology Leadership
Premier Energies has positioned itself as a technology leader through early adoption of TOPCon (Tunnel Oxide Passivated Contact) technology, which offers superior efficiency compared to traditional Mono PERC cells. The company claims it can deliver TOPCon cells with efficiencies exceeding 25%.
By bringing 620W DCR-compliant modules to market as one of the first Indian companies, Premier offers “future-ready” solutions that help solar power investors extract maximum energy and value from solar installations.
Stock Performance and Market Reaction
Share Price Movement
Premier Energies shares were trading at approximately ₹1,090-₹1,100 on October 28, 2025, following the Q2 results announcement. The stock has shown mixed performance over different time horizons:
- Year-to-date: Down 18-19% from listing levels
- One-year return: Up approximately 7-16% depending on measurement date
- Recent momentum: Up 2.77% over five trading sessions and 6.90% over one month prior to results
The stock hit its 52-week high of ₹1,388 on December 17, 2024, and touched a 52-week low of ₹774.05 on April 7, 2025. As of late October 2025, the stock was trading approximately 22% below its recent 52-week high.
Technical Analysis
Technical analysts noted that as of October 27, 2025, Premier Energies’ trend shifted from “mildly bullish” to “bullish,” supported by strong indicators including bullish MACD on weekly timeframe, positive Bollinger Bands signals, and confirming daily moving averages. However, some indicators including weekly KST remained bearish, suggesting mixed strength in the bullish trend.
The stock exhibits relatively high volatility with a beta coefficient of 2.23, indicating that it tends to move more aggressively than the broader market.
Analyst Recommendations and Price Targets
Analyst opinions on Premier Energies remain mixed with a consensus “Neutral” rating based on insights from multiple analysts. According to available data, the average 12-month price target ranges from ₹1,003 to ₹1,080, with estimates spanning from a low of ₹780 to a high of ₹1,340.
Notably, Kotak Institutional Equities maintained a “Sell” rating on Premier Energies with a fair value target of ₹900, despite acknowledging the company’s strong fundamentals and growth prospects. This conservative stance reflects concerns about valuation multiples, with Premier trading at a P/E ratio of approximately 47-48x on a trailing twelve-month basis.
The company’s current valuation represents a significant premium to industry average P/E of 61.2x for semiconductors, though Premier’s P/E of approximately 47x is notably lower than peer Waaree Energies’ P/E of 55-86x.
Market Reaction to Q2 Results
Historical patterns suggest that strong quarterly results alone may not drive sustained share price appreciation for Premier Energies. Following the impressive Q1 FY26 results in July 2025, the stock actually declined 2.8% as investors digested the numbers. Similarly, after Q1 results, the share price remained range-bound despite the company reporting 55% profit growth.
Industry observers anticipate that the Q2 FY26 results, while positive on headline metrics, may not trigger significant upward movement due to the underlying concerns about margin compression and the non-sustainable nature of inventory gains contributing to profit growth. The market appears to be looking for more consistent operational performance improvements rather than one-time accounting benefits.
Investment Considerations and Risk Factors
Growth Potential and Opportunities
Sector Tailwinds: India’s aggressive renewable energy targets and rapidly growing solar capacity provide a strong structural growth opportunity for solar manufacturers like Premier Energies.
Vertical Integration Strategy: The company’s Mission 2028 roadmap to build integrated manufacturing from ingots to modules positions it to capture value across the entire solar value chain.
Technology Leadership: Early adoption of advanced TOPCon technology and focus on high-efficiency modules provides competitive differentiation.
Strong Domestic Order Book: A robust ₹10,500 crore order book provides revenue visibility for the near to medium term.
Policy Support: Government initiatives including PLI scheme, ALMM framework, and DCR mandates favor domestically integrated manufacturers like Premier Energies.
Risks and Challenges
Margin Sustainability Concerns: The significant contraction in EBITDA margins from 30.2% to 22-23% quarter-over-quarter, despite inventory gains, raises questions about sustainable profitability levels.
Dependence on Inventory Accounting: Approximately ₹200 crore of Q2 profit came from inventory gains and other income rather than core operational improvements, creating uncertainty about future profit trajectories.
Intense Competition: Facing strong competition from larger, better-capitalized players like Waaree Energies, which has superior production capacity and wider market reach.
High Valuation Multiples: Trading at P/E of 47x on TTM earnings represents a premium that may limit upside potential if growth disappoints.
Capital-Intensive Business Model: The ₹12,500 crore planned capex over three years will require significant financing, potentially pressuring balance sheet metrics.
Export Market Challenges: Virtually no export diversification with less than 1% of order book from international markets creates concentration risk. The company delayed its proposed U.S. cell manufacturing plant due to policy uncertainty.
Raw Material Dependencies: Continued reliance on Chinese imports for cost-competitive components and raw materials creates supply chain vulnerabilities.
Execution Risks: Ambitious capacity expansion plans carry inherent execution risks, particularly regarding technology integration, capacity utilization, and demand-supply balance.
Comparison with Key Competitors
Premier Energies vs. Waaree Energies
Waaree Energies has established itself as India’s dominant solar manufacturer with significantly larger scale:
Production Capacity: Waaree operates approximately 12 GW of module capacity compared to Premier’s current 5.1 GW, though Premier is targeting 11.1 GW by FY2028.
Customer Base: Waaree served 1,067 domestic customers and 12 international customers during recent periods, compared to Premier’s 117 Indian customers and 3 overseas customers, indicating Waaree’s significantly broader market reach.
Financial Performance: Waaree achieved 41.69% revenue CAGR during 2020-2024 compared to Premier’s 27.12%, while maintaining higher ROCE of 43.6% versus Premier’s 25.2% (though Premier’s ROE of 43.7% matched Waaree’s 33.4%).
Valuation: Waaree trades at higher P/E multiples of 55-86x compared to Premier’s 47x, reflecting market perception of Waaree’s stronger competitive position.
Export Exposure: Waaree maintains stronger international presence and export capabilities compared to Premier’s minimal export footprint.
Positioning Among Solar Energy Stocks
Within the broader universe of Indian solar energy stocks, Premier Energies falls in the mid-tier category with a market capitalization of approximately ₹48,000-49,000 crore. This positions it below large-cap renewable energy giants like:
- Adani Green Energy (₹1,62,000+ crore market cap)
- NTPC Ltd (₹3,30,000+ crore market cap)
- Tata Power (significant diversified energy conglomerate)
- JSW Energy (₹85,000+ crore market cap)
However, Premier ranks among the top pure-play solar manufacturers alongside Waaree Energies (₹1,03,000+ crore market cap at listing) in terms of integrated cell and module manufacturing capabilities.
Conclusion: Impressive Headlines Mask Underlying Operational Challenges
Premier Energies’ Q2 FY26 results present a complex picture that requires careful interpretation beyond headline numbers. While the company reported impressive 20% year-over-year revenue growth and 72% profit growth, deeper analysis reveals that approximately ₹200 crore of the ₹353 crore profit came from non-operational sources including inventory gains and other income rather than core business improvements.
The most concerning aspect of the quarterly performance was the significant margin compression, with EBITDA margins contracting from 30.2% in Q1 FY26 to approximately 22-23% in Q2 FY26, despite the benefit of substantial inventory accounting gains. This suggests underlying operational challenges that may pressure future profitability if market conditions or input costs deteriorate.
Sequential revenue stagnation at approximately 0.8% quarter-over-quarter growth, combined with 24.3% operating profit decline, indicates potential momentum challenges heading into the second half of fiscal 2026. These trends raise questions about near-term growth trajectory and margin sustainability.
Investment Perspective
For investors, Premier Energies presents a mixed opportunity profile. The company benefits from strong structural tailwinds in India’s booming solar sector, maintains a robust domestic order book exceeding ₹10,500 crore, and is executing an ambitious capacity expansion strategy targeting integrated 10 GW manufacturing by FY2028.
However, intensifying competition from larger players like Waaree Energies, concerns about margin sustainability, dependence on non-operational profit drivers, and relatively rich valuation multiples around 47x P/E suggest that significant upside may be limited in the near term.
Investors should monitor several key metrics in upcoming quarters:
- Margin trajectory: Whether EBITDA margins stabilize or continue deteriorating
- Inventory normalization: Impact on profitability when inventory benefits moderate
- Revenue acceleration: Whether top-line growth can reaccelerate from current stagnant levels
- Capacity utilization: Effectiveness of newly commissioned manufacturing capacity
- Order book conversion: Success in converting the strong order book into sustainable revenues
The stock appears more suitable for patient, long-term investors willing to look through quarterly volatility and who believe in India’s multi-decade solar energy growth story. Short-term traders and momentum investors may find better opportunities elsewhere until clearer operational improvement trends emerge beyond accounting-driven profit growth.
Market Outlook
Analyst consensus remains cautiously neutral with average price targets around ₹1,003-₹1,080, suggesting limited upside from current levels around ₹1,090-₹1,100. The stock’s inability to sustain rallies following previous strong quarterly results suggests that the market is demanding more consistent operational excellence before rewarding the shares with significant multiple expansion.
For risk-conscious investors, waiting for evidence of sustained margin improvement and revenue acceleration may be prudent before initiating or adding to positions. Growth-oriented investors comfortable with volatility and focused on the 3-5 year horizon may find the current valuation reasonable given the company’s capacity expansion plans and positioning within India’s rapidly expanding solar manufacturing ecosystem.
Ultimately, Premier Energies’ Q2 FY26 results highlight the importance of looking beyond surface-level financial metrics to understand the true operational health of companies in capital-intensive, competitive industries. While the long-term outlook for India’s solar sector remains compelling, Premier Energies must demonstrate more consistent operational execution and sustainable margin improvement to justify investor confidence and valuation premiums