The renewable energy space continues to remain in focus as companies expand manufacturing capacity and tap rising demand for solar equipment in India. The brokerage house Elara Capital has turned positive on solar module maker Vikram Solar after its March quarter earnings and future expansion plans.
According to the brokerage report, the company’s improving shipment volumes, rising order book and expansion across the solar value chain are key reasons behind its positive outlook on the stock.
Elara Capital has maintained a ‘Buy’ rating on Vikram Solar and assigned a target price of Rs 323. This implies an upside potential of nearly 44% from the current market price.
According to the brokerage report, this renewable sector company is positioning itself as a fully integrated renewable energy manufacturing player with plans spanning solar modules, solar cells, wafers, ingots and battery energy storage systems.
Let’s take a look at the key reasons why the brokerage house is bullish on this stock –
The brokerage highlighted multiple operational and business triggers for Vikram Solar, that it believes could support growth over the next few years.
According to the brokerage report, the Vikram Solar reported a strong Q4FY26. This is mainly driven by higher production and faster ramp-up of its newly commissioned facilities.
Revenue from operations rose 21.7% year-on-year to nearly Rs 1,450 crore during the quarter. Profit after tax increased 21.9% year-on-year to around Rs 110 crore.
The brokerage said, “Revenue from operations increased ~21.7% YoY to Rs 1,450 crore, driven by higher shipments and ramping up of commissioned facility.”
However, Vikram Solar’s margins remained under pressure because of higher raw material and employee expenses. Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) margin declined by 300 basis points to 16% during the quarter from 19% a year ago.
According to the brokerage report, raw material costs increased sharply while employee expenses also moved higher as the company expanded operations.
Another key factor supporting Elara Capital’s view is Vikram Solar’s growing order pipeline.
As per the brokerage report, the company added 1.9 gigawatt of fresh orders during the quarter, taking its total order book to 8.2 gigawatt. Of this, 87% orders are from the domestic market while the remaining 13% are export orders.
The brokerage noted, “Orderbook stands at 8.2GW, providing multi-year visibility.”
Production during the quarter jumped 84.6% year-on-year to 971 megawatt, while sales increased 40.5% to 999 megawatt.
The company’s total shipments for FY25-26 rose 76% year-on-year to 3.3 gigawatt compared to 1.9 gigawatt in the previous year.
Elara Capital also remains positive because of the company’s long-term expansion strategy.
At present, Vikram Solar operates solar module manufacturing capacity of 9.5 gigawatt. It plans to increase this to 15.5 gigawatt by financial year 2027-28.
According to the brokerage report, the company also plans to operationalise 9 gigawatt solar cell capacity in financial year 2026-27 and further expand it to 12 gigawatt in the following year.
The brokerage said, “Management is aggressively transforming into a fully integrated renewables manufacturing platform.”
The company is also planning backward integration through wafer and ingot manufacturing capacity of 12 gigawatt by financial year 2029-30. In addition, it aims to build 15 gigawatt hour Battery Energy Storage System capacity by the same period.
According to the brokerage report, planned investment in wafer and ingot manufacturing is estimated at around Rs 3,700 crore.
Elara Capital expects Vikram Solar’s earnings trajectory to remain strong over the next few years.
The brokerage stated, “We expect a revenue CAGR of 53% during FY26-29E, with an EBITDA CAGR of 44% and a PAT CAGR of 38%.”
According to the brokerage report, the company’s expansion into solar cell manufacturing and backward integration could help improve cost competitiveness and reduce dependence on external suppliers.
The renewable energy sector remains closely linked to government policies, global solar demand and raw material prices.
While Vikram Solar’s expansion plans and rising order book indicate long-term growth ambitions, investors may also need to watch execution timelines, funding requirements and margin trends going forward.
According to the brokerage report, Elara Capital has retained its ‘Buy’ rating and target price of Rs 323 based on 8 times estimated Enterprise Value to EBITDA for FY27-28.
Disclaimer: The investment details and target prices mentioned are based on a report by Elara Capital and are for informational purposes only. Readers should note that equity investments involve market risks, and past performance or brokerage ‘Buy’ ratings do not guarantee future returns. It is recommended to consult a SEBI-registered investment advisor before making any financial decisions based on these projections.
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