Waaree Energies Ltd. - Is it just the Dawn?

[Mohit_baid]

About Waaree Energies Ltd -

Incorporated in December 1990, Waaree Energies Limited is an Indian manufacturer of solar PV modules with an aggregate installed capacity of 12 GW.

Key Points

Market Leadership
Waaree Energies is India’s largest manufacturer and exporter of solar modules. As of FY24, it holds a 21% share of the domestic market for solar modules and a 44% share in India’s solar module exports. Its installed capacity surged from 2GW in FY21 to 13.3GW by FY24.

Product Portfolio
The solar PV modules are manufactured using multicrystalline, monocrystalline, and advanced technologies like Tunnel Oxide Passivated Contact (TOPCon), which minimizes energy loss and boosts efficiency.
Its product range includes multicrystalline modules, monocrystalline modules, TOPCon modules, flexible modules, bifacial (Mono PERC) modules, and building integrated photovoltaic (BIPV) modules.

Manufacturing Facilities
Waaree Renewables operates 5 manufacturing facilities in India. These are in Gujarat (Surat, Tumb, Nandigram, and Chikhli) and Uttar Pradesh (Indosolar Facility, Noida). With a total installed capacity of 12 GW as of June 2024, the company is expanding its facilities to 20.9 GW by 2027, including backward integration into solar cells, ingot, and wafer production​.

Plant A: Located in Chikhli, Gujarat, this plant is the largest, with a capacity of 9.66 GW, producing both monocrystalline and multi-crystalline modules​.

** Trading Business**
The company engages in the trading of solar components, including inverters, batteries, and solar water pumps, sourced from global suppliers.

** Revenue Bifurcation - Product wise**

• Solar PV Modules: 78%
• Solar EPC Services: 15%
• Energy Storage Systems & Others: 7%

Revenue Bifurcation

• Export Sales: 57.64%
• Direct Sales to Utilities and Enterprises: 30.05%
• Retail Sales: 10.15%
• Other Income: 0.8%

International Business
The company exports solar PV modules to markets including the United States, Canada, Italy, Hong Kong, Turkey, and Vietnam. The U.S. is their largest export market, accounting for 57% of export sale

New International Manufacturing Facility
Waaree is setting up a 1.6GW solar PV module manufacturing facility in Houston, Texas, to cater to demand in the United States. This facility is expected to be operational by the end of FY25, with plans to expand capacity to 5GW by FY27

Focus on Backward Integration
Waaree Energies is working towards reducing its dependency on imported solar cells by establishing domestic manufacturing capabilities.
Waaree is setting up a fully integrated 6 GW facility in Odisha for the production of ingots, wafers, solar cells, and solar PV modules. This facility is expected to commence commercial operations by FY27

Order Book
As of June 30, 2024, Waaree Energies Limited boasts a substantial 16.6 GW order book for solar PV modules, including domestic, export, and franchisee orders.

Clients
In FY23, Co. served 566 Customers in India and 33 International customers.

Top 1 Customer - ** 9% of FY24 revenue
Top 10 Customers - ** 57% of FY24 revenue

IPO Details
Co. raised 4,321 Crs through the IPO and got listed on Oct 28, 2024.

The fresh issue of 3600 Crs will be utilized for:
A) Financing the CAPEX of establishing the Odisha Plant.
B) General corporate purposes.

Narration	Jan-00	Jan-00	Jan-00	Jan-00	Jan-00	Mar-20	Mar-21	Mar-22	Mar-23	Mar-24	Trailing	Best Case	Worst Case
Sales	-	-	-	-	-	1,995.78	1,952.78	2,854.27	6,750.87	11,397.61	6,737.19	20,521.10	16,034.93
Expenses	-	-	-	-	-	1,903.01	1,867.93	2,748.32	5,915.06	9,822.80	5,717.12	17,414.02	14,303.52
Operating Profit	-	-	-	-	-	92.77	84.85	105.95	835.81	1,574.81	1,020.07	3,107.08	1,731.42
Other Income	-	-	-	-	-	25.01	44.65	96.58	87.74	576.11	174.22	-	-
Depreciation	-	-	-	-	-	27.13	28.54	43.27	164.13	276.81	132.64	132.64	132.64
Interest	-	-	-	-	-	33.71	29.66	40.88	82.27	139.91	73.77	73.77	73.77
Profit before tax	-	-	-	-	-	56.94	71.30	118.38	677.15	1,734.20	987.88	2,900.67	1,525.01
Tax	-	-	-	-	-	17.92	23.79	38.72	176.88	459.82	248.50	25%	25%
Net profit	-	-	-	-	-	41.71	48.51	75.64	482.76	1,237.18	730.17	2,171.01	1,141.39
EPS	-	-	-	-	-	2.12	2.46	3.84	24.49	62.77	25.42	75.57	39.73
Price to earning											131.73	131.73	131.73
Price	-	-	-	-	-	-	-	-	-	-	3,348.15	9,955.02	5,233.79
RATIOS:
Dividend Payout	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
OPM	0.00%	0.00%	0.00%	0.00%	0.00%	4.65%	4.35%	3.71%	12.38%	13.82%	15.14%
						TRENDS:	10 YEARS	7 YEARS	5 YEARS	3 YEARS	RECENT	BEST	WORST
						Sales Growth				80.05%	68.83%	80.05%	68.83%
						OPM	10.80%	10.80%	10.80%	11.98%	15.14%	15.14%	10.80%
						Price to Earning	131.73	131.73	131.73	131.73	131.73	131.73	131.73
Source - Screener

Risks

• Policy and Regulatory Changes: Shifts in government incentives or tariffs for renewable energy could impact revenue and profitability.
• Intense Competition: A crowded market with many local and international players could lead to price pressures and margin compression.
• Supply Chain Disruptions: Reliance on raw materials and imported components exposes Waaree to risks from supply shortages and price volatility.
• Technology and Innovation Risks: Rapid advancements in solar technology require continuous investment; falling behind could reduce competitiveness.
• Financial Dependence on Subsidies: Changes or reductions in government subsidies and incentives could reduce demand for solar projects, affecting Waaree’s growth.

A closer look -

Products and offerings

Manufacturing Facilities

Utilization

Expansion plans

Disclosure - Invested

[Mohit_baid]

First order after listing -

[Aarti]

35% of sales to US. Will there be any impact if tariffs are increased by Trump Govt. Will imports from China to India and then exported to US be also be affected by tariffs?

[Mohit_baid]

Hi, I believe the revenue contribution from the US was around 57% in FY24.
Coming to your question, I truly don’t see a slowdown, irrespective of what Trump has in mind, the reason being rising fuel costs across all sectors from transport to power generation, the need to curb emissions and meet climate change agreements like the Paris Agreement, moreover he might make policy changes but won’t be able to change the EV/Solar adoption happening around the globe.

One of the many expansion plans -

[sanni_kumar]

but todays market not ready for that if a company have 50% more revenue comes from usa but some days ago elon musk has posted regarding solar addaption in usa it will go increase.

[Mohit_baid]

Exactly that’s the point, you don’t have to be Elon Musk to see that renewables are the only way out.

[nishant_ram]

What are the timelines for Waare cell manufacturing to come up? Also from where will they buy the raw materials? Does anyone have details on this?

[nishant_ram]

Agree with this, only thing is that they may ask to make in USA for selling in USA which may impact margins as cost of production in US would be higher than India. Also other European countries may put same conditions.

[Amit_Singh1]

The efficiency of the Mfg is ~11% of capacity utilization per quarter out of 13 GW.
The order book is good and the margins as of now are sustained, future business and backward integration is key in the margin improvement.

Amit Singh Learning page

Waaree Energies INDIAN SOLAR POWER MARKET [image] Review of solar energy capacity additions in India Review of solar energy capacity additions in India a) About 5,000 trillion kWh per year of energy is incident over the land area. b) Most parts receiving 4kWh to 7 kWh per square meter per day. c) The National Institute of Energy estimated the country’s solar potential at 748 GW, assuming solar PV modules cover 3% of the geographical surface. d) India has 300 days of sunshine each year, w…

[sham72942]

@nishant_ram

only thing is that they may ask to make in USA for selling in USA which may impact margins as cost of production in US would be higher than India

If that’s the case then its a green flag for waaree, since all the other companies doing import business from china will stop & waree’s US investment will bear fruit more than expected.

[Jitendrapd94]

Summary of Wari Energies Limited Earnings Call Q2_2025

Industry Outlook

• The solar industry is benefiting from strong tailwinds, driven by the fact that solar energy is the lowest cost energy globally.
• Diversification of supply chains is another important demand driver, with countries like the United States and India pursuing a “China Plus One” strategy.
• India has set a target of 500 GW of renewable energy by 2030, translating to 60-70 GW of solar power annually.
• This target does not even include the potential demand from data centers, EV charging, and the expected hydrogen boom.
• The combination of solar and batteries is expected to be a leading solution for firm and dispatchable renewable energy globally.
• Solar is viewed as a multi-decadal growth story that is just getting started.

Company Performance and Outlook

• Wari Energies Limited reported revenue of ₹34,634.63 million in Q2 FY25, a 2.95% increase year-on-year.
• EBITDA in Q2 FY25 was ₹61,393 million, up 14% year-on-year, with an EBITDA margin of 16.76%.
• For H1 FY25, revenue was ₹71,543 million (up 2.67% year-on-year) and EBITDA was ₹12,539.26 million (up 14.74% year-on-year), resulting in an EBITDA margin of 17.51%.
• The company has a strong order book of 20 GW, with a diversified customer base spanning exports, large customers, commercial and industrial customers, and retail customers.
• The order book mix as of September 2024 was 27.5% domestic and 72.5% overseas.
• Wari Energies Limited is focusing on robust execution skills to deliver on this order book.
• The company is seeing impressive growth in production, with 3.3 GW produced in H1 FY25 compared to 4.8 GW for the entire FY24.

Business Segments

• Exports constituted 27% of the business mix in FY25, down from 60% in FY24. This shift is attributed to cyclical factors rather than structural issues like competition.
• The retail segment is also experiencing strong growth, currently contributing 23% of the overall business. Management believes it has massive growth potential.
• Wari Energies Limited is expanding beyond solar into other energy transition areas like green hydrogen and battery energy storage systems.
  • The company is setting up an electrolyzer manufacturing plant and plans to announce details within the next two months.
  • The board has approved a ₹600 crore investment in renewable power infrastructure to support the broader energy transition strategy.

Margin Guidance

• Management expects overall profitability to improve by 200 to 300 basis points due to backward integration through the new cell manufacturing capacity.
• This guidance is based on a blended approach, and the profit potential could be significantly higher with full integration.
• The company aims to maximize profit potential through strategic configuration of orders from its manufacturing facilities in India and the US.

Key Risks

• Changes in US trade policy, particularly the potential for anti-dumping and countervailing duties, pose a risk to the company’s US operations. Management is monitoring the situation and expects clarity in January.
• Competition from Southeast Asian countries is another potential risk, although it was not a factor in the reduced export mix this year.

Manufacturing Capacity

• Wari Energies Limited currently has 12 GW of module manufacturing capacity in India, distributed across various locations, with Surat being the largest.
• The company has an additional 1.3 GW facility in Goa that began operations in July 2024 and is currently ramping up.
• A 1.6 GW module manufacturing facility in Texas, USA, is nearing completion and is expected to begin commercial operations by the end of January 2025.
• A 5.4 GW cell manufacturing facility in Surat is also under construction and is expected to commence commercial operations in mid-December 2024.
• A 6 GW integrated facility in Odisha is in advanced planning stages, with land secured and design contracts awarded. This facility is expected to be operational in FY27.
• The company is also evaluating additional capacity expansion in the US, potentially adding 3.4 GW of module capacity and 5 GW of cell capacity.
• By the end of FY25, Wari Energies Limited expects to have a total manufacturing capacity of 15 GW (13.3 GW in India and 1.6 GW in the US).
• By FY27, the company projects 21 GW of module capacity and 11 GW of cell capacity in India, plus potential additions in the US.

Key Takeaways

• Wari Energies Limited is well-positioned to capitalize on the multi-decadal growth in the solar industry.
• The company’s strong order book, robust manufacturing footprint, and expansion into new energy transition areas point to a bright future.
• Management’s focus on execution, profitability, and customer satisfaction will be key to its continued success.
• Changes in US trade policy and competition from Southeast Asian countries are potential risks that need to be monitored closely.

Disc: Invested

[sbkv]

Quick correction @Jitendrapd94 the 1.3GW plant operationalised in July 2024 is in Noida and not in Goa(this is the Indosolar facility they acquired)

The problem i foresee for Waaree and other pure solar module companies are they they will eventually become commodity plays (despite the management claiming otherwise in the concall).
If you see the sales, volume-wise it looks great (30%+growth- 4.8 GW full year FY24 vs 3.3 for half year FY25). Despite this sales are more or less flat to marginally higher. This shows the drastic reduction in realisation per Watt of module sold which is reflected in the price chart shared in the investor presentation.
Looks like company will keep having to grow volume aggressively(not to mention keep investing in higher opex/capex to continuously upgrade to newer technologies leading to higher depreciation charges) just to give marginally higher sales.
The carrot they dangle is the expanded margins post commercialization of cell lines. But as claimed by management that will only lead to around 2% improvement in margins.
I fail to see how they can sustain profit growth with this model as can be seen from all leading solar companies world over (exception being FirstSolar which is an exceptionally innovative company with proprietary low carbon technology for complete integrated play).
Maybe that’s why company is foraying into IPP/Green hydrogen/BESS to diversify and get different revenue streams.
Would like to hear thoughts of @Mohit_baid and other members/investors.
Thanks

Disc:invested

[Mohit_baid]

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