Growth story of scaling integrated capacity, and global footprint
By FY28, Waaree Energies (WEL) is poised to achieve a phenomenal 25.7GW module capacity and 15.4GW cell capacity, ably backed by 14GW ingot-wafer facilities, 3.2GW U.S. modules, adjacencies in inverters, BESS, and green hydrogen. Impressive retail reach (~388 franchise partners), strong order book, and leading DCR market share together provide WEL with ample volume visibility, while U.S. expansion ensures premium IRA-linked margins. Further, backward integration should structurally reduce import dependence and boost profitability. Notably, WEL is pursuing key tech collaborations for Perovskite tandem cells, which reflects sustained R&D investment in next-gen technologies. Notwithstanding the growing competition and oversupply risks, WEL is poised for a healthy uptick in volumes and value. We initiate coverage with a BUY.
Solar sector tailwinds favor integrated domestic players
India’s target of 500GW non-fossil capacity by 2030 and the increasing share of DCR mandates (mandatory domestic sourcing) provide WEL with a strong multi-year tailwind. Key programs like the Production-Linked Incentive (PLI) scheme for high-efficiency modules, ALMM (Approved List of Models and Manufacturers) mandate favoring domestic manufacturers, PM-KUSUM scheme promoting distributed solar adoption, and state-level policies incentivizing open access solar projects should boost domestic demand and localization.
Backward integration to structurally improve margins
WEL imports bulk of its raw materials, largely from China, and marginally from Thailand and Vietnam. However, the ongoing cell expansion and upcoming integrated facility with 10 GW each for cell and wafer, and 6GW module, scheduled for FY27 commissioning, backed by a Rs19.23bn PLI allocation, will help the company move up the value chain – from an assembler to a fully integrated manufacturer – while reducing raw material price volatility and Chinese dependence to reposition it favorably for DCR and ALMM-compliant orders. We reckon the backward integration would improve EBITDA margins by ~500bps over FY25-28e.
Largest domestic player with accelerating capacity additions
WEL is India’s largest solar PV module manufacturer with an installed module capacity of 15GW as of Jun’25 expanding to 28.9GW by FY28e (Including U.S.) while Cell/Wafer will expand to 15.4/14.0 GW by FY28e. WEL is also incorporating adjacencies like 3GW inverters, 3.5GWh of battery storage, 300MW of electrolysers, and laterally into glass, aluminum, junction boxes, encapsulants, and sealants to deepen control over the value chain. The company has built a dominant position with ~12% market share in India and a strong export base, mainly targeting the U.S, capitalizing on its large import dependence and the tightening tariffs on Southeast Asian players that enabled Chinese rerouting. We expect a CAGR volume growth of ~29.4% over FY25-28e for the company despite strong competition.
Strong order book offers revenue visibility
The company reported a robust pending order book of ~25GW as of Q1FY26, valued at ~Rs490bn, with a geographical split of 41% India and 59% overseas. This includes ~3.16GW of EPC orders under Waaree Renewable Technologies Ltd. (WRTL). The domestic orderbook benefits from DCR-linked schemes, while the U.S. pipeline (~3.75GW) extends visibility until FY30 under IRA-backed projects.
Valuation: Robust growth inspires coverage with a BUY and TP Rs4,610
We believe WEL’s Revenue/EBITDA/PAT will record a ~33/45/46% CAGR over FY25- 28e led by a 29.4% CAGR in volumes for the same span. Given the robust growth, we initiate coverage with a BUY and a TP of Rs 4,610, based on 22x FY28e (implied PEG of ~0.5x). Key Risks include oversupplies, project delays, policy & trade uncertainties, tech disruptions, and raw material price volatility.
