India’s largest Solar PV module manufacturer gained 5 percent following a positive outlook from Nuvama, which has set a target for a 23 percent upside potential. This boost reflects investor confidence in the company’s growth prospects in the solar sector, with Nuvama highlighting its strong market position and future potential for expansion.
Price Movement
During Friday’s trading session, Waaree Energies Ltd reached an intra-day high of Rs.2,374.00 per share, rising 5.3 percent from its previous close of Rs.2,253.40 each. The shares have retreated since then and closed at Rs.2,358.00 apiece. From the IPO price, the shares have delivered over 57 percent returns.
Brokerage Outlook
Nuvama Institutional Equities has initiated coverage on Waaree Energies with a ‘Buy’ rating and a target price of Rs.2,805 per share, an upside potential of 20 percent, citing strong growth driven by capacity expansion and diversification into new energy sectors.
The brokerage forecasts a 30 percent revenue CAGR and 54 percent EBITDA CAGR for FY24-27, driven by increased capacity in modules, cells, and wafers. Waaree is also expanding into green hydrogen, electrolysers, lithium-ion cells, inverters, and BESS to support long-term growth. Nuvama views India’s renewable energy sector as a multi-decadal opportunity, similar to the IT boom in the 1990s.
Expanding Export Prospects
Waaree Energies is a prominent player in India’s solar PV module manufacturing industry, with a current module capacity of 13.9 GW. The company is enhancing its capabilities, with 5.4 GW cell capacity under commissioning and 6 GW wafer-to-module capacity in development. Waaree is also India’s largest exporter, recently completing a 1.6 GW module plant in the United States.
The Indian solar market is expected to grow at 24 percent annually by FY28, driven by favorable government policies, including anti-dumping duties and Domestic Content Requirement. Additionally, the U.S. policy shift away from Chinese modules presents a strong export opportunity for Indian manufacturers.
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Policy-Driven Growth Boost
Indian and U.S. policies are fostering supply shortages, resulting in higher module prices and improved profitability. The Domestic Content Requirement (DCR) policy in India and the U.S. approach limiting Chinese modules are pivotal growth drivers for Waaree Energies. The company’s strategic decision to integrate backward into cell and wafer manufacturing secures a stable supply chain and boosts profitability, especially within the DCR market.
Additionally, the commissioning of Waaree’s U.S. plant, combined with favorable policy changes, presents a significant export opportunity, further strengthened by stronger-than-expected domestic solar installations.
Earnings Report
According to its recent financial updates, Waaree Energies Ltd reported remarkable consolidated revenue of Rs.3,457 crores in Q3 FY25, marking a 116 percent increase from Rs.1,596 crores in Q3 FY24. Additionally, the company saw a surge of 260 percent incline in net profit to Rs.507 crores, compared to Rs.141 crores in the same period.
Ratio Analysis
The company has a Return on Capital Employed (ROCE) of 25.13 percent and a Return on Equity (ROE) of 21.2 percent. Its Price-to-Earnings (P/E) ratio stands at 43.05, higher than the industry average of 66.41. Furthermore, the company maintains a current ratio of 1.28, a debt-to-equity ratio of 0.20, and an Earnings Per Share (EPS) of Rs.49.35.
Written by – Siddesh S Raskar
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