Waaree Energies reported a 23.8% revenue increase, though operating margins faced pressure due to export challenges. Brokerage firm Prabhudas Lilladher has maintained a positive outlook, citing the company's large order book and planned expansion. Investors are monitoring the execution of the company's INR 300 billion investment program and the impact of evolving US tariff policies.
Waaree Energies recently reported a 23.8% year-on-year rise in revenue, reflecting continued demand for its solar modules. However, the company’s operating profit margins came under pressure, declining by 550 basis points to 17.6%. This drop was largely caused by a slowdown in exports, driven by uncertainties around US Section 232 tariffs, which led to a rationalization of orders.
Despite these short-term headwinds, brokerage firm Prabhudas Lilladher has reiterated its positive view on the stock, setting a target price of ₹3,111 per share. Analysts believe that the margin pressure is likely a temporary hurdle and expect improvements as cell production rises and capacity utilization at the company's US manufacturing site increases.
Large-Scale Expansion and Order Book
The company is currently in the middle of a massive expansion program, with roughly INR 300 billion being allocated toward capital spending. This investment is directed toward several critical areas, including a 10GW solar cell facility, a 5GWh containerization facility for battery energy storage, 3.5GWh of battery cell manufacturing, 4GW of inverter capacity, and 20,000 MVA of transformer capacity. The management team has reaffirmed its guidance for operating profit in the 2027 fiscal year, aiming for between INR 70 billion and INR 77 billion.
Waaree Energies also boasts a robust order book of approximately 25.6GW, valued at INR 592 billion. A key highlight in the recent performance was the retail segment, where revenue surged by 252.9% year-on-year to reach INR 34.6 billion. Management projects this retail revenue to scale further between INR 100 billion and INR 110 billion in the 2027 fiscal year.
Risks and Monitorables
While the expansion plans are significant, they also introduce risks that investors should track. The company's reliance on US markets makes it sensitive to regulatory changes, such as new import price rules or tariff adjustments. Additionally, the execution of such a large capital spending program requires consistent demand and efficient project management to avoid cost overruns or delays. While the company aims for long-term growth, the volatility in export markets and the competitive nature of the solar manufacturing sector remain key factors. Investors should watch for the commissioning dates of the new facilities and any updates on export volumes in upcoming quarterly results.