Fujiyama Power gains from ALMM cell shortage and expanding rooftop solar demand

Investment View and Valuation

Motilal Oswal Financial Services (MOFSL), in its July 21, 2026 company update on Fujiyama Power Systems, reiterates its Buy rating and sets a target price of Rs 470, based on 20 times FY28E EPS. The current market price is Rs 376.

The investment case is built on Fujiyama Power Systems’ captive domestic solar-cell capacity, accelerating residential rooftop-solar adoption under the PM Surya Ghar Muft Bijli Yojana (PMSGMBY), and expansion into underpenetrated, high-potential states.

ALMM List-II Creates a Domestic Cell Supply Catalyst

MOFSL sees the Approved List of Models and Manufacturers (ALMM) List-II mandate, effective June 1, 2026, as a key structural catalyst. The rule requires government-backed, net-metered and open-access solar projects to use panels manufactured exclusively with domestically produced solar cells.

India has approved module capacity of about 174GW but approved solar-cell capacity of only about 30GW, creating a shortage of domestic cells. Domestic manufacturers produced about 11GW of DCR solar cells during January-June 2026, implying approximately 76% utilisation. MOFSL estimates full-year DCR cell production of about 22GW if this run rate continues.

Even with planned additions through CY28, domestic cell production is expected to support only about 55% of planned module capacity. TOPCon is expected to remain the tightest supply link because cell manufacturing is capital intensive, technically complex and requires 18-24 months to stabilise yields.

Fujiyama’s Captive Cell Capacity and Product Positioning

Fujiyama Power Systems is positioned to benefit through its captive 1GW Mono PERC DCR solar-cell facility. MOFSL believes this backward integration provides supply security and supports margins.

The facility also underpins the company’s new 600W Mono PERC bifacial module, which the broker views as reducing exposure to constrained TOPCon supply. The planned 1.2GW TOPCon expansion is identified as a future growth lever.

Residential Rooftop Solar Demand

Residential rooftop solar is another major demand driver. More than 4.5 million installations and 7.5 million applications have been recorded under PMSGMBY, leaving an estimated untapped opportunity of about 19GW, equivalent to approximately 5.4 million households, through March 2027.

MOFSL expects government digital outreach through the scheme’s platform to improve adoption, particularly in Tier-II and Tier-III markets. Fujiyama Power Systems’ integrated presence across the residential solar value chain is viewed as supportive of participation in this demand pipeline.

Expansion in High-Potential States

The company is strengthening its presence in Assam, Karnataka, Telangana and West Bengal. These four focus states represent about 138GW, or 22% of India’s estimated 638GW rooftop-solar potential, but account for only about 6% of households covered by PMSGMBY.

Since October 2025, covered households grew 62% in Karnataka and 2.4 times, 2.3 times and 2.4 times in West Bengal, Telangana and Assam, respectively. West Bengal is particularly notable, as the Union Power Ministry targets around 0.3 million rooftop systems there over the next two years.

Financial Outlook

MOFSL forecasts FY26-FY28 revenue, EBITDA and adjusted PAT CAGRs of 49%, 53% and 53%, respectively. Its financial estimates are summarised below:

Key Operating Sensitivity

The report’s principal operating sensitivity is the availability of solar-cell technology and supply, particularly TOPCon. MOFSL considers Fujiyama Power Systems’ captive Mono PERC DCR capacity a mitigating factor against this supply risk.