MOTILAL OSWAL INITIATES BUY ON WAAREE ENERGIES WITH TARGET PRICE OF RS 3850
Waaree Energies Reports Robust Revenue in 4QFY26, Misses Estimates on EBITDA Margin
Waaree Energies (WEL) has reported a robust revenue of INR84.8 billion in 4QFY26, surpassing the research firm Motilal Oswal's estimates by 26%. However, the company's EBITDA margin came in 7% below expectations, due to a lower-than-expected margin of 19%. This decline was attributed to several factors, including elevated silver and copper prices, increased freight costs, a weaker overseas revenue mix, and reliance on externally procured DCR cells to fulfill certain module orders.
As a result, the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at INR10.6 billion, missing estimates by 6%. Despite this, module production increased by 19% quarter-over-quarter, while cell production declined by 12% due to the transition of three cell lines to G12R during the quarter.
Motilal Oswal's Research Report Highlights
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
| Metric | 4QFY26 Actual | 4QFY26 Estimated |
|---|---|---|
| Revenue | INR84.8 billion | INR67.1 billion |
| EBITDA Margin | 19% | 20.7% |
| APAT | INR10.6 billion | INR11.2 billion |
The research firm has derived the valuation of WEL through a sum-of-the-parts (SoTP) methodology, resulting in a target price of INR3,725 per share.
Investor Takeaway
Investors should be cautious about Waaree Energies due to its lower-than-expected EBITDA margin and reliance on externally procured DCR cells.
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