Buy Waaree Energies; target of Rs 3244: Anand Rathi

Moneycontrol • 3 days ago

Original source

Key Investment Pillars

  • Retail business growth: Waaree's retail segment is emerging as a meaningful growth engine, supported by an established nationwide distribution network, contributing 46.1% to Q2FY27 revenue.
  • Backward integration and US manufacturing: The company's planned 10GW cell plant and US manufacturing expansion offer potential margin upside and reduced dependence on external procurement.
  • Diversification beyond modules: Waaree is expanding into BESS, inverters, transformers, and power infrastructure, targeting Rs100-110bn revenue from retail in FY27e.
  • US order book rationalization: Deemed cancellation of ~3GW of US export orders reduces Sec 232 overhang, while local manufacturing offers IRA incentives.

Thesis Validation Checklist

  • Retail revenue growth: Monitor retail segment's continued growth and operating leverage.
  • Module utilization and production: Track improvement in module utilization and production, particularly in the US.
  • Capacity commissioning and utilization: Watch for timely commissioning and ramp-up of new manufacturing facilities.
  • Margin expansion: Monitor EBITDA margin expansion driven by higher-margin retail business and US manufacturing.
  • Policy and regulatory developments: Keep an eye on policy changes, particularly regarding US trade and IRA incentives.