China's solar export subsidies are ending, and the ripple effects are about to reshape the global solar market. For years, China has dominated the solar industry, fueled by massive government support. But now, with subsidies on the chopping block, the playing field is tilting. This shift presents a golden opportunity for Indian solar companies. But who stands to gain, and how? Let's dive in.
Solar Module Makers: A Win-Win Scenario?
India's solar module manufacturers, like Waaree and Premier Energies, are poised to benefit significantly. Waaree leads the pack with impressive manufacturing capacities of 5.4 GW for cells and 18.7 GW for modules, while Premier isn't far behind. The removal of China's 9-13% rebates on solar exports is set to level the playing field, making Indian products more competitive, not just domestically, but also in the export market.
Currently, China's module manufacturing is significantly cheaper than India's, by approximately 10%. The removal of rebates will change the game. Waaree has already shown its export prowess, with exports accounting for around 47% of its revenue in Q2FY26, a significant leap from 17% in FY25. Premier has even more room to grow, with 99% of its revenue coming from domestic sales.
Both Waaree and Premier have improved their Ebitda margins to a healthy 25-30%. Waaree's revenue has exploded, growing more than sevenfold from under ₹2,000 crore in FY21 to nearly ₹15,000 crore in FY25. Premier has also seen substantial growth, with revenue nearly doubling to ₹1,100 crore over the same period. Both companies have negative net debt, which should allow for faster growth. With order books of ₹47,000 crore at Waaree and ₹13,250 crore at Premier, they have revenue visibility for almost two years.
However, the stocks have experienced a downturn, losing about a third of their value since their peaks around September 2025. This has brought their price-to-earnings (P/E) ratios to more manageable levels, around 27. The market seems to favor Premier due to its greater potential for export growth, with its shares gaining 4% on January 10th, while Waaree's rose by 1%.
Solar Glass Manufacturers: A Clouded Outlook?
Borosil Renewables, the dominant player in India's solar glass market, faces challenges. Its profitability has been at the mercy of India's regulations and import competition. The company's debt-to-equity ratio improved in FY25, which supported profitability, and the situation should improve further as Chinese solar glass becomes more expensive. However, domestic competition could intensify, with other firms potentially expanding their solar glass production. Borosil's working-capital management could also be a concern. These factors have weighed on investor sentiment, and the stock has remained flat since late 2021.
EV Chemical Players: Promising Potential
Chemicals like lithium hexafluorophosphate and lithium cobalt oxide are crucial for photovoltaic cells. Indian chemical companies are looking to expand their capacities, and the shift away from China comes at an opportune time. Neogen Chemicals has formed a joint venture with Japan's Morita Chemicals to build a large manufacturing facility for lithium hexafluorophosphate. Himadri Speciality Chemical is set to produce advanced carbon material for lithium-ion battery anodes and lithium iron phosphate cathode material. Gujarat Fluorochemicals, as India's only fluoropolymer manufacturer, is also well-positioned. However, the stock prices of these companies already reflect this optimism.
But here's where it gets controversial...
Risks and Considerations
While the removal of subsidies presents opportunities, risks remain. The cost of manufacturing solar cells in India is significantly higher than in China. Building solar plants could become more expensive, potentially impacting independent power producers.
What do you think? Will Indian solar companies capitalize on this shift? Are there any hidden risks or overlooked opportunities? Share your thoughts in the comments below!
Disclaimer: 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.
