Waaree Energies stock up 6% today; share price target post Investor Day

Waaree Energies Ltd saw its shares rallying 6 per cent in Wednesday's trade after the company hosted its Investor Day. The renewable energy company highlighted its successful backward integration into solar cells with further capacity expansion in the works. Waaree Energies announced four new initiatives including electrolyzer manufacturing, BESS manufacturing, inverters and renewable power infrastructure.

Following the development, the stock rose 6.4 per cent to hit a high of Rs 2,245.35. The stock is still down 22 per cent year-to-date.

Kotak Institutional Equities said all of these are aimed at increasing wallet share in renewable energy projects. That said, the brokerage believes the impact of the initiatives would be seen over the medium term.

"Uncertainty around US IRA and tariffs remains a key overhang for Waaree (54 per cent export order book). We reduce fair value by 10.5 per cent to Rs 2,280, driven by 1.9-12.5 per cent cut in estimates, which is largely driven by a cut in IRA incentives, as for certain US clients, Waaree will be passing on the IRA benefits. Retain REDUCE," Kotak Institutional Equities said.

One of the key highlights from the investor day was the recent commissioning and stabilisation of its 1.4 GW MonoPERC cell line. Koak said utilities account for the majority of the cell plant cost (50 epr cent of cost) and have a long lead time (14-18 months).

"Since Waaree has commissioned utilities for the entire 5.4 GW cell capacity, the company remains confident of commissioning a 4 GW cell line by 1QFY26. Overall, India’s operational cell capacity has now reached 18.6 GW (up 129 per cent on a YoY basis), and we expect further cell commissioning in FY2026," Kotak said.

The US administration on January 20 passed an executive order called Unleashing American Energy, which indicated a pause on US IRA incentives. With no further communication from the US administration regarding IRA incentives and potential import solar tariffs on various exporting countries yet
to be finalised, a lack of clarity on the future of the US order book remains an overhang for Waaree Energies, along with potential patent infringement lawsuit, Kotak said.

"We cut FY2025-27 estimates by 1.9-12.5 per cent, driven by a cut in IRA incentives, as Waaree will be operating on a cost-plus model for a few US-based clients, leading to a reduction in our FV to Rs 2,280. We have not factored in the new initiatives," it said.