Motilal Oswal Initiates Coverage on Waaree Energies with 'Buy' Rating and 75% Bull Case Upside Projection

Motilal Oswal Financial Services has initiated coverage on Waaree Energies Ltd., a leading player in the solar manufacturing sector. The brokerage has assigned a 'buy' rating to the stock with a price target of ₹4,000 per share, which represents a 19% upside from recent levels. Furthermore, their bull case scenario projects a price target of ₹5,895, implying a potential upside of 75%.

Waaree Energies possesses significant manufacturing capabilities, including 5.4 GW of cell capacity and 16.1 GW of module capacity in India, alongside a 2.6 GW plant in the United States. The company holds a formidable market share in India, outperforming domestic competitors. Motilal Oswal highlighted Waaree's swift response to regulatory changes, such as establishing domestic cell capacity ahead of rivals in anticipation of government policies, and expanding its US capacity to navigate evolving tariff landscapes.

As an integrated player across the solar value chain, Waaree Energies is well-positioned for growth. The company has a substantial order book valued at ₹47,000 crore, ensuring high earnings visibility. Management has guided for EBITDA to be between ₹5,500 crore and ₹6,000 crore for the current fiscal year. Motilal Oswal estimates a compound annual growth rate (CAGR) of 43% for EBITDA and 40% for Profit After Tax (PAT) between FY25 and FY28.

The brokerage identified potential upside risks such as slower capacity ramp-up and further localization of wafers and ingots. Downside risks include intensifying competition, sensitivity to US market policies, and execution challenges in capital-intensive manufacturing segments.

Impact This positive initiation from a major brokerage, coupled with strong growth forecasts and a substantial order book, is expected to drive investor confidence in Waaree Energies. The news could lead to a significant upward movement in the stock price and bolster sentiment for the broader renewable energy sector in India. Rating: 8/10.

Difficult Terms: - Initiated Coverage: When a financial analyst or brokerage firm begins to provide research reports and recommendations on a company's stock for the first time. - Price Target: An analyst's projection of a stock's price over a specific future period, typically one year. - Upside Projection: An estimation of how much a stock's price is expected to increase from its current level. - Bull Case: A scenario where all favorable factors align, leading to the most optimistic outcome for a stock's price. - Giga Watt (GW): A unit of power equal to one billion watts, commonly used for electricity generation capacity. - Module Capacity: Refers to the manufacturing capacity for solar panels (modules). - Approved List of Cell Manufacturers: A list of companies approved by the government to manufacture solar cells, often linked to subsidies or benefits. - Tariff Landscape: The set of taxes, duties, and trade policies that affect international trade. - Solar Value Chain: The entire process from raw materials and component manufacturing to project development, installation, and electricity generation in solar energy. - Order Book: The total value of contracts awarded to a company for work not yet completed, indicating future revenue. - Earnings Visibility: The degree of certainty about a company's future earnings. - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): A measure of a company's operating performance. - PAT (Profit After Tax): The profit remaining after all expenses and taxes have been deducted. - CAGR (Compound Annual Growth Rate): The average annual growth rate of an investment over a specified period. - Fiscal Year (FY): A 12-month period used for accounting and financial reporting, typically from April 1st to March 31st in India. - Backward Integration: A strategy where a company acquires or invests in businesses earlier in its supply chain. - Ingot/Wafer Manufacturing: The production of silicon ingots and wafers, fundamental components for solar cells. - Capacity Utilization: The extent to which a company's manufacturing capacity is being used.