Waaree Energies Sees Cash Decline Amid Ship Strands and Disrupted Supplies in West Asia

Waaree Energies Ltd Sees Temporary Dip in Cash Conversion Due to Logistical Disruptions

Waaree Energies Ltd, India's top renewable energy player, experienced a temporary dip in cash conversion and a build-up of inventory in the fourth quarter due to logistical disruptions stemming from the West Asia war. According to the company's chief financial officer, Abhishek Pareek, the situation is expected to ease in the coming months.

The company's cash conversion ratio stood at 26 percent in FY26, down from 112 percent in FY25, according to its investor presentation. This decline can be attributed to the temporary rise in inventory levels in the fourth quarter, which was caused by logistical issues. Pareek explained that a significant number of ships and movements were stuck in transit, leading to a delay in the expected shipments.

| Comparison of Cash Conversion Ratio | | --- | --- | | FY26 | 26% | | FY25 | 112% |

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Waaree Energies did not specify its free cash flow for the quarter. However, Pareek stated that the inventory level has gone very high temporarily, which is choking up the operating cash flow. He added that this situation is expected to give a positive effect starting from this quarter.

The company saw its cost of materials surge 180 percent year on year, hit by soaring freight costs, which rose 250 percent, higher silver, copper, and glass costs. The sharp rise in prices led buyers to sit out until the costs settled. As a result, the company did not receive much in terms of new orders in the last quarter.

To prepare for potential escalations in the global energy crisis and to support the ramp-up in production, Waaree is maintaining a higher buffer of imported inventory in transit. The company is delivering on its Rs 53,000-crore order book, and while some orders may have been pushed from one quarter to another due to the "dust settling" on commodity prices and war-related disruptions, Waaree maintains that overall demand remains strong.

The company intends to spend Rs 30,000-crore capex in the year and has taken an enabling resolution to raise up to Rs 10,000 crore to fund it. Waaree already has a healthy cash position on its balance sheet as of March 31, 2026. The company has guided for EBITDA in the range of Rs 7,000-Rs 7,700 crore for the current financial year, which will further strengthen its cash generation.

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