Is Waaree Energies the next green energy multibagger?

Indian Express

17-06-2025

The renewable energy cycle that began in 2023 made Suzlon Energy, Inox Wind Energy, and KPI Green Energy multibaggers. These stocks rose 700%, 1,200%, and 600%, respectively, between 2023 and 2024. The green energy wave also made way for green energy IPOs in 2024. A prominent name among them was Waaree Energies.
While Suzlon is India's largest wind turbine manufacturer, Waaree is India's largest solar module manufacturer with a 14.1% market share as of Q1 FY26. Waaree is walking on Suzlon's path to become a vertically integrated solar energy company that not only manufactures solar modules but also solar cells, grid inverters, and solar products, and constructs, operates, and maintains solar farms. The company is moving a step further to become a solar Independent Power Producer (IPP).
While Waaree and Suzlon have similarities, their operating style are starkly opposite. Suzlon is expanding conservatively, focusing on the domestic market. Waaree, on the other hand, is expanding aggressively in India and the United States to tap the solar opportunity.
Can Waaree Energies be the next multibagger in the solar space? Let's find out.
Waaree Energies increased its solar photovoltaic (PV) module capacity sevenfold from 2 gigawatt (GW) in FY21 to 15GW in FY24 as orders flowed in. The company made its debut on the stock exchange in October 2024 and raised Rs 4,321 crore to fund its backward and forward integration strategy and become an integrated energy player. It is expanding horizontally and vertically organically and through acquisitions.
Over the years, Waaree perfected its solar PV modules to meet the most stringent global quality and performance standards. Today, Waaree accounts for 44% of PV module exports from India and 21% of domestic consumption. It expanded its module manufacturing capacity last year by acquiring IndoSolar and aims to add another 4.8 GW capacity by FY27.
It even expanded in the US, bringing into operation its 1.6 GW module manufacturing facility in Texas in January 2025. The company plans to expand this facility to 3.2GW by FY26 and add a battery energy storage systems plant by 2028.
Waaree Energies is also expanding vertically. In backward integration, it manufactures cells, ingots, wafers, battery storage, and green hydrogen electrolysers. This backward integration capacity operates on a book-and-ship model where execution is fast and generates quick revenue. The company builds a factory only after it has a sufficient order book, ensuring capacity utilisation. Its 5.4GW cell factory at Chikhli, Gujarat, is operating at more than 90% capacity due to a strong order book. Waaree expects volume orders once the government implements the Approved List of Models and Manufacturers (ALMM) for cells from June 2026 onwards. It is also acquiring Kamath Transformers for Rs 293 crore and expects to complete the deal in FY26.
In its forward integration strategy, Waaree has expanded into inverters, Engineering, Procurement, and Construction (EPC) services, and power infrastructure. It is acquiring Enel Green Power India Private Limited (EGPIPL) for Rs 792 crore to expand its IPP business, and a non-operating company, Green New Delhi Forever Energy Pvt Ltd, to hold specific power projects under the IPP framework.
EPC and power infrastructure projects have longer execution times and higher working capital requirements, which leads to a higher debt level. To ensure efficient execution of all businesses across the value chain, Waaree Energies has built a comprehensive structure of eight companies. Of the eight subsidiaries, its EPC arm, Waaree Renewable Technologies, is listed on the stock exchange.
Waaree Energies' Subsidiaries Across the Value Chain
Waaree Energies is chasing a pipeline of around 100 GW modules, and Waaree Renewable Technologies is chasing around 30 GW of EPC contracts. Waaree has signed a power purchase agreement with Rewa Ultra Mega Solar and Madhya Pradesh Power Management Company to supply 150 MW of solar power.
Such aggressive expansion is part of Waaree's broader strategy of controlling EBITDA in a cyclical and volatile renewable energy market.
Waaree Energies Financial Highlights (FY23-FY26)
Waaree Energies Fundamentals
FY23
FY24
FY25
Revenue (Rs Crore)
6,751
11,398
14,444
YoY Growth
137%
69%
27%
EBITDA Margin
15.56%
21.04%
Source: Waaree Energies Earnings Presentation
Raw materials make up 68% of Waaree's total operating expenses. It is looking to improve EBITDA by reducing raw material costs through backward integration. Traditionally, the company sourced solar cells for 11.5-14 cents, which will reduce to 7-8 cents when it makes its cells, said Sonal Shrivastava, CFO of Waaree Energies, in the Q4 FY25 earnings call.
The uncertainty around demand and the certainty around cost make it logical for Waaree to focus on EBITDA. The decision on what the company manufactures and how much will boil down to EBITDA.
For FY26, the company expects to grow EBITDA by 76-92% to Rs 5,500-6,000 crore. This guidance is backed by its Rs 47,000 crore order book, which gives a three-year revenue visibility. This order book comprises 25GW of modules and 3.2GW of EPC orders. Around 57% of orders are from overseas, and the remaining 43% are from India. However, the company sees 80% of its FY26 revenue to come from India and 20% from overseas.
This gap in revenue and order book shows the company will continue to tap domestic retail and utility orders with an execution timeline of two months to 12 months in FY26 and FY27. Beyond FY27, the overseas orders with an execution timeline of 1 year, 2 years, and 2.5 years could take a larger share.
Uncertainty has been brewing in the US market since November 2024, when Donald Trump was elected the President. His stance on green energy created uncertainties around India's renewable energy exports. Since Waaree's 58% of FY24 revenue came from exports, the stock was particularly hit.
The tax bill passed on May 22 will pause the 30% federal tax credit households get on rooftop solar in 2025 and phase down other subsidies in 2028 instead of 2029.
What others see as a threat, Waaree Energies sees as an opportunity. The company's CEO, Amit Paithankar, noted that tax credit restrictions are on products linked to 'foreign entities of concern (FEOC),' mainly China. This restriction puts Waaree at an advantage to replace FEOC. The US opportunity was visible in June 2025 as Waaree Energies secured a 599 MW solar module supply order in the US over and above the 586 MW solar modules contract, bringing new US deals in the first quarter of FY26 to around 1,200 MW.
Paithankar is also optimistic about discussions between India and the US over resolving the tariff situation. These policy changes could delay the US order execution by a year or two, but not cancel it, as most of them are long-term contracts and Waaree has already received advance payments.
In the meantime, the company looks to offset weak international demand with strong domestic demand as it did in FY25, increasing its revenue by 27% and improving its EBITDA margin to 21% from 15.5% a year ago.
Despite policy changes, the US remains a key market for Waaree from a long-term perspective as the country is home to some of the biggest data centres in the world. Big Tech is investing billions of dollars in artificial intelligence (AI)-enabled data centres, which consume more electricity. According to an International Energy Agency report, almost half of the growth in US electricity demand by 2030 will come from data centres.
Data Centre Electricity Consumption by Region 2020-2030
Waaree believes an AI data centre could accelerate the adoption of clean energy, presenting an opportunity for solar energy to power these centres.
Waaree Energies' share price rose 55% between October 24 and November 4, 2024, but reversed course after Trump was elected. The next growth cycle of over 40% was also short-lived when Trump paused retaliatory tariffs. The US policy uncertainty has slowed its sales and earnings growth.
The stock is trading at a price-to-earnings ratio of 43.6x, lower than Premier Energies' 48.7x.
Brokerages have a mixed rating on Waaree Energies as weak exports and high capex keep its free cash flow negative.
Analyst Ratings on Waaree Energies Post FY25 Earnings
Analyst Rating
Price target post FY25 earnings (Rs)
Previous Target (Rs)
Upside from market price Rs 2,840
Rating
Nuvama Institutional Equities
3,622
2,805
28%
Buy
Jefferies
2,100
2,030
-26%
Underperform
Cholamandalam Securities
3,600
27%
Buy
Kotak Institutional Equities
2,600
-8%
Sell
Source: Brokerage reports
Solar plays an important role in India's renewable energy story, and Waaree is well-positioned to tap this growth. Most multibaggers were beneficiaries of a demand spurt from the product-linked incentive (PLI) scheme, government subsidies, strong execution, and operational efficiencies.
Waaree Energies' stock has the potential to pick up momentum once the US policy uncertainty ends. After all, the US makes up for more than half its order book. Cell manufacturing presents a growth opportunity in the domestic content requirement (DCR) space. However, increasing competition could dilute its revenue growth rate.
To become a multibagger, Waaree needs the secular trend of solar power demand from AI data centers to materialise. An order win from a data centre, especially from a global tech company, could set the ball rolling for the multibagger gains.
Waaree Energies is an interesting stock to add to the watchlist as its growth story is just beginning.
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
Puja Tayal is a financial writer with over 17 years of experience in the field of fundamental research.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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