Waaree Energies: Prabhudas Lilladher Maintains Buy Rating, Targets Rs 3713

Waaree Energies Sees Improved Prospects Amid Challenges

Waaree Energies, a leading player in the renewable energy sector, has reported softer realizations in Q4FY26 due to higher commodity costs, elevated logistics costs, and lower export contribution. Despite these challenges, the company's order book remains strong at approximately Rs53 billion, with 65-70% of this coming from overseas markets, providing multi-year revenue visibility.

The company's expansion plans are expected to drive growth, with the completion of G12R upgrades in Q1/Q2FY27 likely to improve production by 10-12% from current levels. Waaree Energies has increased its total capex plan to approximately Rs300 billion across verticals to strengthen its transition into a fully backward integrated player. The company aims to utilize 85% of its expanded 15.4GW cell capacity, primarily driven by DCR demand and higher in-house integration.

Key Highlights

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Waaree Energies' US capacity is set to scale up from 1.2GW to 4.2GW over the next six months, enhancing its presence in the US market. The company's working capital increased in Q4FY26, primarily due to a build-up in inventory and receivables resulting from delayed export shipments due to Middle East logistics disruptions. However, management has indicated that this is a temporary phenomenon, and inventory is expected to convert to revenue as logistics normalize.

We estimate revenue, EBITDA, and PAT CAGR of 21.9%, 21.7%, and 17.3% respectively over FY26-28E. Our upward revision of FY27/FY28 earnings estimates by 4.9%/6.5% is driven by cost benefits from backward integration and a higher DCR mix. We maintain a 'BUY' recommendation with a target price of Rs3,713 (earlier Rs3,600), valuing the company at 12x EV of Mar'28E EBITDA with an implied PE of 18x FY28E.