Waaree Energies shares: Nuvama initiates coverage; check views, price targets & more

Domestic brokerage firm Nuvama Institutional Equities initiated coverage on recently listed Waaree Energies. The domestic brokerage firm is positive on the stock post recent correction citing it executing eclectic energy integration. However, it also cautioned that Waaree has Inevitably, new industries raise imponderable risks—eventual import tariffs cut, technological upgrades and potential modules overcapacity.

Nuvama said that Waaree is not just solar play, as it is strategically pivoting for exponential growth across the nascent, but multi-decadal renewable energy/green hydrogen opportunity. Waaree is prudently executing a long-term strategy of becoming a horizontally and vertically integrated New Energy play.

""Waaree's ballooning capacity and burnishing DCR-linked realisation underpin our FY24–27E revenue and Ebitda CAGR of 30 per cent and 54 per cent, respectively. The cell plant start-up would fastcharge Ebitda by Rs 2,000 crore in FY26E. We expect margins to peak at 24 per cent by FY28E as competition rises for modules and import tariffs fall," Nuvama said.

Margins would moderate over the medium term, but comprehensive integration—G H2, electrolysers, inverters, battery, BESS, RE—shall help sustain growth and de-risk. Meanwhile, early-stage high-growth industry life cycle calls for even higher valuation, it said with a 'buy' rating and a target price of Rs 2,805, suggesting a 25 per cent upside in the stock.

Shares of Waaree Energies inched up marginally to 2,266 on Friday, commanding a total market capitalization close to Rs 65,000 crore. The counter had settled at Rs 2,250.55 on Thursday. However the stock has crashed nearly 40 per cent from its all time high at Rs 3,740.75 hit on November 6, 2024.

Overseas Brokerage firm Jefferies recently imitated coverage on Waaree Energies with a 'hold' rating and a target price of Rs 2,030. It expects the tide to turn by late 2027 as India faces an oversupply situation and the US nears self-sufficiency. On the other hand, Kotak Institutional Equities has a 'reduce' rating on the stock with a target price of Rs 2,280.

Shares of Waaree Energies have rebounded nearly 11 per cent from its 52-week low at Rs 2,030 hit on January 27, 2025. The stock is down 21 per cent on a year-to-date (YTD) basis. However, the stock has remained flat in the last one month.

Solar energy is the lowest cost energy globally at this point in time. It is expected to remain the leading low cost energy source globally, with Solar PV installed capacity anticipated to rise from 1,064 GW in CY22 to 2,733 GW by CY28, reflecting a CAGR of 14 per cent and is set to surpass natural gas by 2026 and coal by 2027, said Nirmal Bang Institutional Equities.

"It is targeting 11.4 GW solar cell capacity by FY27E—including a 5.4 GW facility in Chikhli by FY25E and a 6 GW plant in Odisha. It aims to reduce third-party dependence and secure its supply chain. This comprehensive backward integration strategy is expected to significantly enhance profitability, improving EBITDA margins by 500 bps from the current 19 per cent in 9MFY25," it said, keeping the stock unrated.

Shares of Waaree Energies were listed at the bourses on October 23, when the company raised a total of Rs 4,321.44 crore via IPO, selling its shares for Rs 1,503 apiece. The issue saw a strong demand, fetching bids for Rs 2.4 lakh crore for the net portion. The stock is currently 50 per cent above the IPO price.

Anand Rathi Shares & Stock Brokers also met the senior management and visited Waaree Energies' Chikhli plant in Gujarat, home to both module and cell manufacturing facilities. The company is India's largest solar module manufacturer, 3 times that of the second largest player by capacity.

Management is sanguine about growth, driven by vigorous capacity expansion, vertical integration and a robust 26.5GW order book valued at Rs 50,000 crore. It caters to independent power producers, commercial & industrial consumers, and the retail and agri-solar segments, it said, keeping the stock unrated for now. Anand Rathi sees execution delays and policy shift as key risks.