Premier Energies share price target cut 20% by JPMorgan on near-term margin risks

Shares of Premier Energies Ltd. opened with gains of 1% on Thursday, March 20. Global brokerage firm JP Morgan has a ‘Neutral’ rating on the stock but has reduced its price target by 20%.JP Morgan’s revised price target is ₹940, down from ₹1,170 earlier. Despite the cut, the new target still implies a further upside of 1% from current levels.

Premier Energies

has fallen 28% over the past three months, compared to a 4% decline in the Nifty. However, near-term margin risks have increased, JP Morgan wrote in its latest report.
The foreign brokerage mentioned that the company had reported a rapid increase in margins: from 17% in Q3FY24 to 30% in Q3FY25.JP Morgan warned that these margins could come under pressure in the near term due to—

a) Falling prices of non-DCR modules, which could also drag down local DCR prices.

b) Headline wafer prices have been stable, which could drive a compression in margins.c) Indian cell capacity has increased rapidly — from 13 GW in October 2024 to 25.2 GW currently.

As these new capacities ramp up, the supply of DCR cells and modules will increase, reducing pricing premiums, the brokerage added.

Premier Energies shares made their stock market debut in September 2024, becoming one of the most successful listings of the year. The stock had debuted at more than double of its issue price of ₹450 and went on to make a post-listing high of ₹1,388.

Since then, the stock has been in correction mode, in-line with the sell-off witnessed in the broader markets.

The stock has corrected 33% from its post-listing high of ₹1,388. Most of that fall has come during the first two months of this year as the stock is down 30% year-to-date.

Shares of Premier Energies Ltd. are currently trading flat at ₹933.50. On Wednesday, the stock ended at ₹930.80, up 4.09%.