Posted on February 4, 2025 by Niftynews
Key Takeaways:
- Premier Energies share price fell 15%, reaching ₹997 after peaking earlier in the day.
- Despite strong earnings, U.S. policy changes caused concerns about clean energy.
- The company’s gross margins declined, and its U.S. expansion plans were paused.
What Led to the Drop in Premier Energies Share Price?
Premier Energies, India’s second-largest solar cell manufacturer, saw a 15% decline in its Premier Energies share price, dropping to ₹997 after hitting a high of ₹1,172 earlier in the day.
The decline came despite reporting strong financial results for Q3FY25. The company posted a staggering 493% surge in net profit to ₹255 crore, with revenue growing 140% YoY to ₹1,713 crore, driven by increased solar module exports and reduced expenses. Premier Energies also reported a solid EBITDA margin of 30%, well above analysts’ expectations of 23%.
However, investor sentiment turned negative due to a surprising 160 basis point drop in gross margins, despite higher capacity utilization (96% for cells, 74% for modules) and an optimal revenue mix (32.8% from cells). This margin compression was unexpected and spooked investors.
The U.S. Expansion Pause and Its Impact on Premier Energies Share Price
One of the key factors contributing to the sharp decline in Premier Energies share price was the company’s decision to pause its plans for a 1-GW solar cell manufacturing facility in the U.S. This decision followed recent policy changes under President Trump’s administration, which rolled back climate-related policies, halted tax credits for clean industries, and suspended clean energy incentives such as those under the Inflation Reduction Act (IRA).
In mid-2024, Premier Energies had announced a joint venture with North American solar module maker Heliene to establish the U.S.-based facility, capitalizing on U.S. clean energy incentives. However, with the new administration’s shift in policies, this expansion has been delayed, causing uncertainty within the solar sector and impacting the Premier Energies share price.
How U.S. Policy Changes Are Affecting the Solar Sector
The uncertainty surrounding U.S. clean energy policies has had a significant effect on Premier Energies’ stock. As a leading supplier of solar modules to the U.S. market, the company is especially vulnerable to policy changes. Premier Energies currently holds nearly 100% of India’s solar module exports to the U.S., making the impact of these policy shifts more pronounced.
Since Premier Energies reached its stock price peak in December, the shares have lost about 23%, highlighting investor concerns over these policy changes.
Premier Energies’ Strong Domestic Market Position Amidst Challenges
Despite challenges in the global market, Premier Energies remains a leader in the solar energy market India. The company maintains a strong foothold in the domestic rooftop and solar pump markets, especially in light of the upcoming ALMM (Approved List of Models and Manufacturers) regulations for solar cells in India. These regulations, effective from June 2026, are expected to further bolster Premier Energies’ prospects in the domestic market.
Kotak Securities has raised its target price for Premier Energies shares to ₹840 from ₹770, though they have maintained a “Sell” rating due to the ongoing risks.
Conclusion
Premier Energies share price continues to show resilience despite global challenges. With a dominant position in both the Indian market and solar module exports to the U.S., the company’s future depends on how it adapts to shifting global policies. The pause on its U.S. expansion and concerns about declining margins have affected investor sentiment, but Premier Energies’ long-term growth potential remains strong.
If you’re considering Premier Energies share or exploring Nuvama share price trends, understanding the global solar energy market India and clean energy policies will be crucial to making informed investment decisions.