Whalesbook
Profit Squeeze Hits Waaree Despite Revenue Surge
Waaree Energies reported mixed results for the fourth quarter of FY26, with strong revenue growth but significant concerns over profitability. The company announced an impressive 111.80% year-over-year increase in revenue from operations, reaching ₹8,480.25 crore, largely driven by higher sales volumes. Net profit also climbed 71.44% to ₹1,061.1 crore.
However, beneath these figures, operating EBITDA margins declined to 18.59% in Q4 FY26 from 23.04% in the same quarter last year. This profit squeeze was the main reason the stock plunged nearly 10% in early trade. Shares traded around ₹3,203.10, down from the previous close of ₹3,502.90.
Waaree Expands into Semiconductors, Plans ₹10,000 Crore Raise
Amidst margin concerns, Waaree Energies is entering the semiconductor market, aiming to tap into a fast-growing global sector driven by digital technology. The company also approved acquiring Waaree Semicon Private Limited for ₹1 lakh. Simultaneously, the board approved raising up to ₹10,000 crore through a Qualified Institutional Placement (QIP). This money will fund the company's expansion, its semiconductor ventures, and strengthen current businesses.
Management forecasts FY27 EBITDA between ₹7,000 crore and ₹7,700 crore, a revised and more realistic figure.
Valuing Waaree in India's Booming Renewable and Semiconductor Sectors
Waaree Energies operates in India's growing renewable energy sector, which is benefiting from government targets and demand for clean energy. India is the world's third-largest renewable energy producer, with over 250 GW of capacity.
Waaree Energies' trailing twelve-month P/E ratio is about 29.61, placing it in the mid-to-high range for the sector. This compares to Adani Green Energy's P/E exceeding 130 and Tata Power's P/E around 36. The semiconductor industry in India is also a major growth area, projected to exceed $126.54 billion by 2035. However, semiconductor manufacturing requires significant capital and technical expertise, presenting considerable challenges.
Mixed Analyst Views on Waaree's Path Forward
Analysts have mixed views on Waaree Energies. Nomura maintained a 'buy' rating with a target price of ₹3,750, noting the revenue beat but acknowledging the EBITDA miss from margin contraction. This suggests strong operations in volume but execution challenges in profitability.
In contrast, Jefferies downgraded the stock to 'underperform' in April 2025, citing concerns over US import dynamics, high inventories, and weakening economics in India's non-DCR solar segment, setting a target of ₹2,100. This view highlights risks from global trade policies and domestic market trends that can affect profits.
Nuvama Institutional Equities reaffirmed a 'buy' rating in April 2025, raising its target price to ₹3,622 based on strong prospects and guidance. Geojit also expressed optimism about solar module makers like Waaree. The company's guidance and fundraising aim to support expansion, but investors will watch for margin recovery and how well new ventures integrate.