Whalesbook
Budget 2026's allocation of over Rs 30,000 crore to the solar sector is signaling a profound shift towards self-reliance and domestic manufacturing. This substantial investment, coupled with reduced taxes on raw materials, is designed to catalyze a significant expansion in India's solar manufacturing capabilities. While large conglomerates capture headlines, the real engine of this expansion may lie within specialized, smaller entities.
Indosolar Ltd: A Resurgent Manufacturer
Indosolar Ltd, a manufacturer of solar photovoltaic cells, exemplifies a remarkable turnaround story. Acquired by Waaree Energies through the NCLT process, the company underwent significant capital restructuring, leading to its relisting in June 2025. Its Return on Capital Employed (ROCE) stands at an impressive 77%, far exceeding the industry median of 28%. Furthermore, Indosolar is virtually debt-free, with a debt-to-equity ratio of just 0.02, a stark contrast to its pre-restructuring financial state.
Sales for Indosolar have surged from zero in FY20 to Rs 324 crore in FY25, with nearly Rs 600 crore recorded in the first three quarters of FY26. EBITDA turned positive post-acquisition, logging Rs 95 crore in FY25 and Rs 206 crore in the first three quarters of FY26. Net profits, after periods of loss, reached Rs 55 crore in FY25 and Rs 204 crore in the initial three quarters of FY26. The share price has seen a dramatic re-rating, climbing from around Rs 2.5 in early 2021 to Rs 434 by February 6, 2026, reflecting its fundamental transformation. Trading at a Price-to-Earnings (PE) ratio of 7x, significantly below the industry median of 40x, Indosolar appears undervalued.
Waaree Renewable Technologies Ltd: EPC Powerhouse
Waaree Renewable Technologies Ltd, a key subsidiary of the Waaree Group, spearheads the Solar Engineering, Procurement, and Construction (EPC) business. It boasts an exceptional ROCE of 82%, dwarfing the industry average of approximately 20%, and maintains a low debt-to-equity ratio of 0.12.
The company has demonstrated phenomenal growth in sales, escalating from Rs 6 crore in FY20 to Rs 1,598 crore in FY25, a compound annual growth rate of 209%. For the first three quarters of FY26, sales already reached Rs 2,229 crore. EBITDA growth has mirrored this trajectory, with a compound annual growth rate of 215%, reaching Rs 311 crore in FY25 and Rs 435 crore in the first three quarters of FY26. Net profits have transformed from a loss of Rs 3 crore in FY20 to Rs 229 crore in FY25, with Rs 322 crore posted by the end of Q3FY26. Its share price has surged from approximately Rs 6 in February 2021 to Rs 901 by February 6, 2026. Despite this ascent, the stock trades at a PE of 24x, close to the industry median of 27x, and holds an unexecuted order book exceeding Rs 3,500 crore, ensuring revenue visibility.
Valuation and Future Outlook
Both Indosolar and Waaree Renewable Technologies present compelling cases for investors looking at the burgeoning Indian solar market. Indosolar's deep discount valuation and Waaree Renewable's substantial order book, coupled with their strong operational metrics and the government's supportive policies, position them as potential beneficiaries of the ongoing energy transition. The market's current pricing suggests a potential mispricing, offering an attractive entry point for those who believe in the long-term structural shift towards solar power in India.