Waaree Renewables - old Sangam Advisors - can it keep on renewing?

[Nisarg]

Thanks @sammy11 for those helpful insights.

If someone has on-ground experience in this field, I wanted to know two things:

1. What is the competition scenario. This would decide if the 12 to 15% margin will be maintainable in the future.
2. Is the cost of 1.25 to 1.5 cr per MW justified. I am unable to understand how Waaree is performing so well on margin front as compared to Sterling Wilson. Could there be any benefit due to the presence of parent group in manufacturing of modules?

[Nisarg]

@DEBASHISH sir would love to know your analysis and take on this. I remember you mentioning about private placement and waaree RTL
Thanks

[james_kerala]

Latest investor presentation of last Quarter results.

https://www.bseindia.com/xml-data/corpfiling/AttachHis/b1332972-105e-46c8-b408-76b49c035689.pdf

Regarding recent order wins.

As per screener furious growth in last 5 years as below.

Looking to see if this is sustainable growth for the next few years.

Thank you @sameernics bringing this to notice through a post in KPI Green thread.

Disc: a small tracking position for study purposes.

[hitesh97]

@Worldlywiseinvestors Sir waaree renewables sales growth Q3 2024 was amazing. Earlier PE was 598.7 but after eps growth it is 65.1 and it’s median PE is 55.9.

So is it worth to buy at this point or it is expensive now.

Its 1 year return is phenomenal.

Please advice how to look this company at this valuation.

Please refer screenshot.

[Amit_Singh1]

Waaree Concall + Q3 FY24 Result + New Order received

• By 2027 solar would be about 206 gigawatt up from 70
  gigawatt today.
• Waaree Conversion of Bid vs Received is around 30-40%.
  Current bid of 9 GW is in pipeline.
• Present Order book (unexecuted) is 1.1 GW.
• Past 9 month FY24 Rev/ MW is Rs. 0.784 Cr.
• New Order of 0.41 GW Order is (Rs. 1.32 Cr)
• Solar Analytics to capture the data on the generation capacity during various periods of time based on illumination, and to find efficiencies or inefficiencies.
• Waaree executes EPC contracts with buying Land and setting up Solar plants for clients (Rs. 3.5 Cr per MW) and also just putting up Solar Plant on clients Land (Rs. 1.3 CR/ MW- Rs. 2.5 Cr/ MW).
• Taking Orders from Pvt Sector is their Focus area.
  Some illustration on If
  ================================

	MW Unexecuted Order Book	Rev (1.323 Cr/MW)	PAT (Cr@16%)	No of Shares	EPS	CSP	PE
FY25	2700	3572	556	10.5	52.96177317	933.4	18
FY26	5400	7143	1112	10.5	105.9235463	1906.623834	18
FY27	10000	13228	2060	10.5	196.1547154	3530.784878	18
FY28	15000	19842	3089	10.5	294.2320731	5296.177317	18
FY29	20000	26456	4119	10.5	392.3094309	7061.569755	18
FY30	25000	33070	5149	10.5	490.3867886	8826.962194	18

Disc: Invested
Comments/ Corrections Welcome

[Ketan_Chheda]

I have never tracked this company, but something seems to be amiss in your illustration.

Their TTM sales and profits are 665Cr and 106Cr for FY24. Your estimate of FY25 sales and profit is 3572Cr and 556Cr. Do you think thats doable?

An EPC business with a sustainable PAT margin of 16% ??? Doubtful.

Their total outstanding shares are 2.1cr.

[Gaurav2000k]

Any comments on below news concerning the sector

1. Evasion of custom tax
   Six solar firms face DRI probe for 'evasion of duty' - The Economic Times

2. Relevant for their Parent company

[Amit_Singh1]

Check for share split news and the orders that are in pipe line. Also their capacity to execute is there for 2.7 GW for FY25.

[Ketan_Chheda]

Thanks for pointing to the stock split news.

I still am skeptical of the margins and future growth in your illustration.

[01_Sandeep_Ahir]

Why this stock is moving so much is there any news

[SameerAhuja]

Part of the Green energy theme i guess!

[AHI]

solar rooftop scheme of central goverment , stock split news

[Kartikeya_Panwar]

Waaree RTL received a “letter of award (LOA) for the execution of engineering, procurement and construction (EPC) work for solar power plant of 980 MWp on turnkey basis”, it said, adding the company’s unexecuted order book now stands at 2.141 GW.

The project is scheduled to be completed within 12 months as per the LOA

[meekinvestor]

Waaree is now 95.8 times. Does it have a moat? Thinking of investing in its sister concern, the Waaree Energies. They have filed a DRHP.

[Ketan_Chheda]

It does not have any moat…solar EPC is not very high end in terms of engineering, very low margin business. Dont know what the Energies businesses are but if its solar module manufacturing that too will not have any moat.

My suggestion will be to avoid the group. They are trading at very high valuations which will not be sustainable.

[Dev2]

Don’t think so. The reason for such high valuation can be attributed to; a) sector tailwinds in renewables, b) topline growth due to point a ; and c) guidance provided by management for Q4. Management expect that for full year they will deliver approx 900 to 950 MW and in first 3 quarters they have delivered 473MW.

Disclosure: invested

[Sat]

As per the yearly numbers reported here - Year wise Achievements | Ministry of New and Renewable Energy | India, India seems to have added 10GW per year in 2022 and ~7GW in 2023, the estimates of 10GW and above per year looks aggressive to me. It doesn’t account for slowdowns where we might see a dip in new commissions. I would like to understand what changes for the company for every 100MW increase in the order book, does their working capital cycle increase, does the debt profile change significantly. Understanding these may help us arrive at a sustainable growth rate. Let me know if that makes sense.

[VALUE2017]

Are the valuations justified for a purepaly EPC company???

EPC road is more technical then EPC solar
Any moat

Disclosure: Not invested

[Ketan_Chheda]

Valuations justified - No.

Any moat - No

But its in the Hot sector…so

[Ruban_Sarma]

Sir, i don’t think they have a moat, being a solar EPC player. Anyone with the prescribed credentials can participate in the tender.