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For decades, pushing out exports has been China’s top priority. A fifth of the economy is driven by exports, which have come under pressure of late as China-US relations have soured. To keep the export engine purring through the on-again-off-again trade war, domestic manufacturing has been heavily subsidized.
China’s solar exports are no exception. They enjoy rebates that translate to discounts of 9-13%, according to Arihant Capital. But now, concerns around profitability and domestic self-sufficiency have taken centre stage. China announced on 9 January that its rebates on photovoltaic products would be removed, and those on batteries would be cut from 9% to 6% starting 1 April 2026 before being phased out entirely by early 2027.
Considering that China accounts for 80% of the global solar panel value chain, the removal of its rebates will drive up global prices of solar panels in nearly the same proportion. This is potentially a bumper development for India’s solar exporters, which have been playing second fiddle to China’s subsidized products.
Which sectors stand to benefit, and how? Let’s dive in.
Solar module makers: wins all around?
Waaree and Premier Energies are among India’s largest manufacturers of solar cells and modules. While Waaree leads the market with 5.4 GW and 18.7 GW of cell and module manufacturing capacity, Premier’s corresponding capacities are 5.1 GW and 3.2 GW.
According to reports, China’s module manufacturing is currently 10% cheaper than India’s, and 20% cheaper than the US’s, and 35% cheaper than Europe’s. So, the removal of the 9-13% rebate will tilt the scales in India’s favour, not just for domestic consumption but also for exports.
Waaree derived about 47% of its revenue from exports in Q2FY26, a significant increase from 17% in FY25. Premier has more headroom to grow its exports, given that 99% of its revenue currently comes from domestic sales.
Both Waaree and Premier have expanded their Ebitda margins to a healthy 25-30% over the years. But Waaree has grown faster. Its revenue has expanded more than seven-fold from less than ₹2,000 crore in FY21 to almost ₹15,000 crore in FY25, while Premier has seen its revenue less than double to ₹1,100 crore over the period. Waaree’s growth lead has held up in FY26 as well.
Once global module prices pick up, Premier can hopefully push the pedal on growth, given that its margin situation is already sorted. Waaree may attempt to strike a balance between expanding margins and furthering growth. Both have negative net debt, leaving room for faster growth. Order books of ₹47,000 crore at Waaree and ₹13,250 crore at Premier provide revenue visibility of almost two years at the annualized quarterly run rate.
The stocks have shed almost a third of their value since hitting their peaks around September 2025, cutting their trailing 12-month price-to-earnings (P/E) ratios to more palatable levels around 27.
The developments in China have left investors more upbeat about Premier because of its larger headroom in exports. Premier’s shares gained 4% on 10 January, while Waaree’s rose by 1%.
Solar glass manufacturers: fundamental overhang lingers
India’s solar glass scene is dominated by Borosil Renewables, pitting it directly against cheap imports from China. The result? Borosil’s profitability has been left at the mercy of India’s regulations around customs duties and the approved list of models and manufacturers (ALMM). It has struggled with volatile profitability, even plunging into losses at times.
Things took a turn for the better in FY25, when its debt-to-equity ratio moderated from more than 0.4 to 0.25. This supported profitability, which stands to expand further once Chinese solar glass becomes expensive. The situation should start improving for Borosil’s German subsidiary as well, once imported Chinese products no longer undercut prices.
That said, domestic competition could intensify. About 87% of Borosil’s revenues come from within India. Firms such as Asahi India Glass, Hindustan Glass, and Sejal Glass already have solar glass as one of their revenue streams, but may double down once India’s price disadvantage to China shrinks.
Borosil’s working-capital management could be another pain point. Having expanded from 96 days in FY24 to 159 days in FY25, further strain could weigh on cash flows. These risks have weighed on investor sentiment, and the stock has remained flat since late 2021. Even China’s rebate removal only managed to lift sentiment with a lag.
EV chemical players: promising potential
Certain chemicals including lithium hexafluorophosphate and lithium cobalt oxide find use in the manufacture of photovoltaic cells. Chemical players in India have been looking to expand these capacities.
Neogen Chemicals has formed a joint venture with Japan’s Morita Chemicals to build what will be India’s largest facility for manufacturing lithium hexafluorophosphate. Thanks to Morita’s three decades of experience in the field, the potential shift away from China comes at an opportune time for Neogen. Its stock has gained over 15% since 9 January.
Meanwhile, Himadri Speciality Chemical is set to become India’s first company to produce advanced carbon material for lithium-ion battery anodes, leveraging its technological partnership with Australia’s Sicona Battery Technologies. Himadri is also on track to manufacture lithium iron phosphate cathode material. But the stock price already reflects this optimism, having clocked a compound annual growth rate (CAGR) of 56% over the past five years. China’s rebate removal thus could not lift it higher.
Gujarat Fluorochemicals is in a similar situation. As India’s only fluoropolymer manufacturer, and one of the early movers in battery chemicals including lithium hexafluorophosphate, its stock has clocked a five-year CAGR of 42%. With little room to increase further, the stock has corrected since 9 January. Nevertheless, once tangible benefits start flowing in, the fundamentals are likely to eventually justify the steep valuations.
Risks remain
We can take cues from the 20-50% rallies in aluminium and copper prices, triggered by China’s scrapping of its 13% rebates on the metals starting 1 December 2024. The trend can be extrapolated to solar modules, but the picture is less rosy if we move further up or down the value chain.
Based on a report by CRISIL, the gap is wider in solar cell manufacturing. Despite production-linked incentives for domestic manufacturing and customs duties on imports, manufacturing solar cells costs up to twice as much in India as it does in China. So, while China’s removal of the 9-13% rebate will help close the gap in solar cells, there is still a long way to go before India’s cell manufacturing process can match China’s on scale and price.
The flip side of the rebate removal is that building solar plants will become more expensive. Sure, companies such as Tata Power and Adani Enterprises may benefit as they have plans to build the entire solar production value chain. But others such as NTPC are independent power producers, and have so far remained focused solely on building power plants. They may be left footing the bill for costlier solar panels.
Ananya Roy is the founder of Credibull Capital, a Sebi-registered investment adviser. X: @ananyaroycfa
Disclosure: The author does not hold shares of the companies discussed. The views expressed are for informational purposes only and should not be considered investment advice. Readers are encouraged to conduct their own research and consult a financial professional before making any investment decisions.
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