Motilal Oswal Initiates Coverage on Waaree Energies with 'Buy' Rating, Sets ₹4,000 Target

Motilal Oswal Financial Services Limited has initiated coverage on Waaree Energies, a prominent player in the solar cell and module manufacturing sector, by assigning a 'Buy' rating and setting a target price of ₹4,000 per share. This valuation implies a potential upside of approximately 19% from the current stock price.

The brokerage's positive outlook is based on several key factors. Motilal Oswal anticipates that cell margins and pricing will remain stable through FY27, supported by limited new capacity additions in the industry and extended timelines for existing new capacity to stabilize. Emerging business segments, including Battery Energy Storage Systems (BESS), Engineering, Procurement, and Construction (EPC) services, and green hydrogen, are projected to become significant growth engines. These new verticals are expected to contribute an estimated 15% to Waaree Energies' EBITDA by FY28, enhancing business diversification.

Impact This news is expected to boost investor confidence in Waaree Energies, potentially leading to an increase in its stock price. The positive analyst rating and growth projections could attract more investment into the company and the broader renewable energy sector in India. The sector is also benefiting from supportive government policies aimed at increasing renewable energy capacity. Rating: 8/10

Difficult terms EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operating performance. BESS: Battery Energy Storage Systems. These systems store energy from renewable sources for later use, helping to stabilize the grid. EPC: Engineering, Procurement, and Construction. These are services that cover the entire lifecycle of a project, from design to completion. Green Hydrogen: Hydrogen produced using renewable energy sources, making it an environmentally friendly fuel. ALMM: Approved List of Module Manufacturers. A list maintained by the government of manufacturers whose solar modules are approved for use in certain projects. ALCM: Approved List of Cell Manufacturers. Similar to ALMM, but for solar cells. ALWM: Approved List of Wafer Manufacturers. Similar to ALMM, but for silicon wafers used in solar cells.