Sun Shines on Waaree Energies as Tariff Clouds Clear
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Waaree Energies Stock Performance
– Shares of Waaree Energies, the leading solar module manufacturer in India, have soared nearly 28% in just two weeks, with a noteworthy 11% increase on Tuesday.
– The stock’s three-month decline has now narrowed to 10%.
– The US market previously contributed 15–20% to Waaree’s revenue in the December 2025 quarter, compared to 57% in the March 2024 quarter. As tariffs ease, exports to the US have substantial potential for recovery.
Positive Market Reactions
– Investors have responded well not only to the trade deal but also to Waaree’s impressive third-quarter results.
– Management anticipates exceeding its prior guidance of ₹5,500–6,000 crore for operating profit before depreciation and amortization (Ebitda) for FY26, supported by excellent execution and an expanding order book.
Waaree Energies’ Backward Integration Strategy
– As part of its integration plans, Waaree is establishing a 10 Gigawatt (GW) ingot and wafer facility while also expanding cell capacity by another 10GW. Both facilities are expected to be operational by FY27.
– This strategy will create a fully integrated solar value chain that includes polysilicon, ingots, wafers, cells, and modules, minimizing reliance on imports and enhancing profit margins.
Order Book Growth
– The company experienced a 28% sequential growth in its order book, reaching ₹60,000 crore in the December quarter.
– A robust order pipeline exceeding 100 GW assures multi-quarter revenue visibility.
– Approximately 65% of the order book comprises international contracts, while domestic orders are increasingly focused on high-margin segments, such as Domestic Content Requirement (DCR) modules, which utilize locally sourced materials and command premium pricing.
Expansion into New Domains
– In addition to solar products, Waaree plans to expand into related sectors, including battery energy storage systems (BESS), inverters, and green hydrogen.
– The company is in the process of constructing a 20-gigawatt-hour BESS manufacturing facility, expected to be operational by FY28.
– In the December quarter, Waaree raised about ₹1,000 crore in equity to finance its lithium-ion cell and battery-pack plant.
– For green hydrogen, Waaree aims to build a 1GW electrolyzer manufacturing facility, supported by production-linked incentives of ₹444 crore, with an expected commissioning by FY27.
Adapting to Market Demands
– To meet US non-Chinese sourcing requirements, Waaree has invested $30 million in an Oman-based polysilicon facility, with production anticipated to commence this quarter. This investment will provide a fully traceable supply chain, a vital asset for the company’s expansion in the US.
Impressive Quarterly Results
– In the December quarter, Waaree achieved its highest-ever consolidated revenue of ₹7,565 crore, doubling year-on-year. Ebitda surged threefold to reach ₹1,928 crore.
– Module production increased by 94%, reaching a record 3.5GW, while cell output hit 0.75GW from near-zero.
Analyst Insights
– Following this strong quarterly performance, PL Capital has revised its earnings estimates upward by 5.7% for FY27 and 1.2% for FY28.
– The brokerage has maintained a ‘Buy’ rating on the stock, raising the target price to ₹3,600 from ₹4,084, which corresponds to an anticipated FY28 price-earnings (P/E) multiple of 21.
As Waaree Energies continues to navigate the clearing skies and shifting tariffs, its strategic expansions and innovations position it well for future growth and success in the solar energy arena.