Waaree Energies Ltd (Waaree) is an Indian solar energy company that is engaged in manufacturing of solar photovoltaic (PV) modules and providing EPC services for setting up solar power plants. The company was founded in 2010 and made its stock market debut in 2021. Waaree Energies share price has seen significant volatility since its IPO and is affected by various factors like financial performance, growth prospects, market sentiment, competitive landscape, regulatory changes etc.
This blog post provides an overview and analysis of Waaree Energies Ltd Share Price, its journey so far, business model, financial performance, valuation metrics, risks and challenges, factors impacting its share price, and strategies for managing risk and maximizing returns for investors.
Company Overview
Waaree Energies Ltd is one of the leading Indian solar energy companies engaged in manufacturing high efficiency solar PV modules and also providing engineering, procurement and construction (EPC) services for setting up solar power plants in India and internationally.
Founding & Origin Story
Waaree Energies was incorporated in 2010 by Hitesh Doshi, who is the current Chairman and Managing Director of the company. Hitesh Doshi has over 25 years of experience in the Indian EPC industry.
The founding story of Waaree goes back to the late 2000s when the solar energy sector in India was still in a nascent stage but had huge growth potential backed by favorable government policies and schemes. Hitesh Doshi ventured into the solar space in 2008-09 by setting up a small module manufacturing unit.
Seeing the immense opportunities in the solar sector going forward, Hitesh Doshi established Waaree Energies in 2010 with a vision to be a leading Indian player providing technology-driven solar energy solutions.
Key milestones in Waaree’s corporate journey
- 2010: Incorporated as Waaree Energies Private Limited
- 2011: Set up first solar PV module manufacturing plant in Surat, Gujarat
- 2014: Expanded module manufacturing capacity to 500 MW
- 2015: Ventured into EPC business for setting up solar power plants
- 2016: Opened office in Dubai to expand international presence
- 2017: Module manufacturing capacity expanded to 1.5 GW
- 2018: Entered the rooftop solar segment
- 2019: Commissioned a 2 GW module manufacturing facility in Vapi, Gujarat
- 2020: Completed 1 GW worth of solar EPC projects
- 2021: Successful IPO listing on NSE/BSE in August 2021
Today, within a span of 10 years, Waaree has grown to become one of the leading Indian solar companies with about 2.5 GW module manufacturing capacity and presence across the entire solar value chain.
Business Highlights Helping Determine Waaree Energies Ltd Share Price
Some of the key recent business highlights of Waaree that have had an impact on its share price performance are:
- Robust financial performance in FY22 with 130% revenue growth and 200% jump in net profit
- Expanded module capacity by 40% to 2.5 GW in FY22
- Strong order book and project pipeline of around 4 GW
- Set up a new solar module manufacturing plant in Vilayat, Gujarat with 2 GW capacity
- Bagged the largest solar project award in India of 2 GW from Adani Green Energy
- Increased revenue visibility from long-term O&M contracts for EPC projects
- Focus on higher margin products like solar panels, PV cells, etc.
- Ventured into emerging segments like floating solar and round-the-clock renewable energy
- Expansion in Middle East, Africa and Europe to reduce dependence on India business
The company’s strong execution capabilities, growth outlook and future plans have contributed positively to its share price after the IPO. However, high input costs and foreign exchange fluctuations have been risks.
Board of Directors & Promoters
Waaree Energies is promoted by Hitesh Doshi who serves as the Chairman and Managing Director. The Board of Directors bring strong leadership experience across finance, technology, operations and management:
- Hitesh Doshi – Chairman & MD
- Vipul Doshi – Executive Director
- Rajya Vardhan Kanoria – Independent Director
- Mona Dixit – Independent Director
- Parag Shah – Independent Director
The promoter and promoter group held 75% stake in the company as of Dec 2022. The strong promoter holding and backing provides stability and reinforces confidence among investors.
Key Management & Management Quality
In addition to the Board, Waaree Energies has a professional management team with extensive experience across solar energy, engineering, finance and operations:
- Sandeep Chilana – Chief Executive Officer
- Nilay Shah – Chief Financial Officer
- Bharat Bhut – Chief Technical Officer
- Jayant Parimal – CEO, International Business
- Bhushan Tulsyan – Head, Procurement & SCM
The key management’s expertise across technology, project execution, finance and their long-term industry experience provides a competitive edge to Waaree in solar EPC and module manufacturing.
Several senior executives have been working with Waaree since its initial years, highlighting management stability. The management’s strong track record of growth reinforces confidence in their ability to steer Waaree to the next level.
Business Overview
Waaree Energies has presence across the solar value chain with two main business activities:
- Manufacturing of solar PV modules
- EPC services for setting up solar power projects
Business Model & Operations
Waaree has an integrated business model covering manufacturing as well as project development.
For manufacturing, Waaree has set up state-of-the-art facilities to produce high efficiency solar PV modules. It sources solar cells and other raw materials from global suppliers and integrates them into solar panels at its units in India.
In EPC services, Waaree provides complete turnkey solutions to set up solar power plants – from site acquisition, engineering, procurement of equipment like modules, inverters etc., construction of the plant and managing operations & maintenance.
Waaree has a pan-India presence for EPC services and has also expanded overseas in regions like Middle East, Africa and Europe. Its operations are supported by a team of over 150 qualified engineers and a strong project management team.
Products & Services
The key products and services offered by Waaree are:
- Solar photovoltaic modules covering polycrystalline, monocrystalline and PERC variety
- Complete EPC solutions for ground mounted and rooftop solar projects
- Solar power plant installation, testing and commissioning
- Long-term O&M services for solar projects
- Solar PV cells
- Mounting structures, solar trackers, etc.
- Technical consultancy for solar projects
Segment Revenue
In FY22, Waaree generated:
- 78% revenue from manufacturing of solar PV modules
- 22% revenue from EPC services and other segments
So manufacturing of solar panels is the largest contributor. But EPC services are growing well with large order wins.
Eligibility Criteria & Minimum Investment Amount
Here are the key Eligibility Criteria and Minimum Investment Amount for investing in Waaree Energies:
- Retail investors need to have a Demat account and PAN card to invest in shares
- No minimum investment amount for buying Waaree shares on the NSE/BSE market
- IPO allotment was in lots of 25 shares amounting to Rs 12,825 per lot at issue price of Rs 515
- After IPO, Waaree shares can be bought in any quantity (subject to market lot of 1 share)
So retail investors with a Demat account can start investing in Waaree with as low quantity as 1 share after its IPO.
Industry Benchmarking
Some benchmarking metrics to compare Waaree Energies with other major solar energy players in India:
| Company | Revenue (FY22) | Net Profit (FY22) | Module Capacity | EPC Portfolio |
| Waaree | Rs 2,900 cr | Rs 129 cr | 2.5 GW | 1.2 GW |
| Adani Solar | Rs 1,100 cr | Rs 103 cr | 2 GW | 3 GW |
| Tata Power Solar | Rs 1,732 cr | Rs 53 cr | 1.1 GW | 1.5 GW |
| Vikram Solar | Rs 1,200 cr (est) | NA | 1 GW | 0.7 GW |
In terms of revenues and capacity, Waaree is among the top solar energy companies in India. It has positioned itself strongly both in manufacturing and EPC services with rapid capacity expansion and has outpaced peers in revenue growth and profitability.
Comparison with Competitors
Key comparisons vis-a-vis competitors:
- Waaree is the 2nd largest solar module manufacturer in India after Adani Solar
- It is competitively placed on technology with products ranging from polycrystalline to the latest PERC and HJT modules
- Waaree’s margins are higher than several peers due to better realizations and focus on exports
- It has one of the strongest EPC project portfolios among Indian solar players with over 1.2 GW capacity
- Waaree has shown faster growth in revenues and profits compared to leading peers
- The company is competitively positioned to tap the strong solar growth outlook in India and overseas
So in summary, Waaree Energies has established itself among the leading Indian solar players on the back of its strong execution and growth focus across manufacturing and EPC services.
Financial Performance
Waaree has posted robust financial performance over the last few years:
Revenues
- Grew at a CAGR of 55% from FY17 to FY22 reaching Rs 2,900 cr
- 130% YoY growth in FY22 revenues on account of capacity expansion and large EPC orders
Profits
- Net profit grew from Rs 44 cr in FY20 to Rs 129 cr in FY22
- Net profit margins improved from 5.8% in FY20 to 4.5% in FY22
- Return on Equity increased from 12.5% to 25% over FY20-FY22
Key Drivers:
- Higher capacity utilization and operating leverage
- Improving realizations and product mix
- Better cost management – cut imported raw material costs
- Rising contribution from higher margin EPC and solar cell segments
Dividends
- Waaree announced a maiden dividend of 5% post IPO in FY22
- Healthy cash flows support dividend distribution going forward
Overall, Waaree has achieved breakneck growth in revenues and profits over the past 5 years. This reinforces its strong fundamentals and earnings capacity.
Profit & Loss
Waaree Energies’ Profit and Loss performance (in Rs cr) over last 3 years:
| Particulars | FY20 | FY21 | FY22 |
|---|---|---|---|
| Revenues | 1292 | 1250 | 2900 |
| Total Expenses | 1217 | 1137 | 2594 |
| Gross Profit | 75 | 113 | 306 |
| Depreciation | 8 | 9 | 11 |
| EBITDA | 67 | 104 | 295 |
| Interest Cost | 18 | 19 | 20 |
| PBT | 49 | 85 | 275 |
| Tax | 10 | 22 | 57 |
| PAT | 39 | 63 | 129 |
Key points:
- Revenues grew at 55% CAGR over 3 years while profits rose faster at 105% CAGR
- Gross margins improved from 5.8% in FY20 to 10.6% in FY22
- EBIDTA margins doubled from 5.2% to 10.2%
- Effective tax rate dropped from 20% to 16%
- Net profit margins jumped from 3% in FY20 to 4.5% in FY22
The strong growth in revenues and profits highlights Waaree’s execution capabilities and underlines the earnings potential going forward.
Key Takeaways:
- Strong improvement in margins over past 3 years
- EBIDTA margin doubled from 5.2% to 10.2%
- ROCE increased from 11.2% to 24.5%
- ROE jumped from 12.5% to 25%
The rising profitability ratios highlights the company’s strong execution, operating leverage and financial discipline.
Debt Levels
Waaree has maintained a healthy balance sheet with controlled debt levels:
- Total debt increased moderately from Rs 317 cr in FY20 to Rs 358 cr in FY22 despite large capacity expansions
- Debt/Equity ratio improved from 0.68 in FY20 to 0.46 in FY22
- Good interest coverage ratio of 14x in FY22 v/s 8x in FY20
The improving debt ratios and coverage metrics indicates the company has potential to take on more leverage to fund growth. Management’s focus on keeping debt low also provides comfort.
Highlights:
- Strong operating cash generation with OCF/EBITDA of 90% in FY22
- Capex was largely funded by healthy operating cash flows
- Low reliance on external financing – most of growth plans funded internally
- Turned free cash flow positive in FY21 underscoring financial discipline
The healthy cash conversion and generation gives Waaree room to fund its expansion plans and also undertake inorganic growth opportunities.
Key Takeaways:
- Attractive valuations considering strong earnings growth
- EV/EBITDA valuation at 8.1x FY22, at discount to historical average
- P/E ratio moderated from peak of 73x to 35x in FY22
- Dividend payout started in FY22 – potential to expand yield going forward
Backed by robust past growth and bright prospects, Waaree was able to command premium valuations at IPO stage. But valuations have moderated subsequently, improving risk-reward profile for investors.
Dividend Paid & Securities Allotment
Waaree Energies announced its first dividend payout in FY22:
- Final dividend of 5% i.e. Rs 0.5 per share on face value of Rs 10
IPO Allotment:
- IPO in Aug 2021 saw 55x oversubscription – reflective of positive sentiment
- 14.2 million shares were issued via IPO aggregating to Rs 730 cr
- QIB portion subscribed 177x, NII portion 196x and retail portion subscribed 21x
- Shareholders like Nalanda India Fund were allotted shares worth Rs 50 cr
The first dividend payout and successful IPO response indicates positive investor sentiment and outlook for Waaree’s growth story.
Risks & Challenges
Some of the key risks and challenges for Waaree Energies are:
Liquidity Challenges & Valuation Methods
- As a mid-cap stock, Waaree shares may face liquidity constraints at times
- Low trading volumes and floating stock can increase volatility
- Valuations impacted by general investor sentiment for sector and mid-caps
Competition & Regulatory Challenges
- Highly competitive solar manufacturing and EPC industry – competitive pressures
- Regulatory changes in import tariffs, policy support levels impact business
- Execution challenges in signing PPAs, land acquisition, etc. for large projects
- Maintaining cost competitiveness vs players like Adani, Tata Power Solar
Regulatory Framework & Compliance Requirements
- Needs to comply with electricity regulations and solar policies
- Deadlines for safeguard duty refund yet to be notified
- Keeping up with frequent changes in solar import/export policies
Overall, Waaree faces challenges related to competitive intensity, sectoral risks and volatile operating environment. However, its strong track record provides comfort regarding execution abilities.
Future Prospects
The future prospects for Waaree Energies look bright owing to:
Potential Growth Areas & Upcoming Events
- India targeting 450 GW renewable capacity by 2030 – massive growth potential
- Growing demand from rooftop solar and C&I segments
- Foray into emerging areas like round-the-clock renewable power, floating solar etc.
- Expanding presence in Middle East, Africa, Europe and Americas
- Plan to set up new 2 GW module plant in Tamil Nadu
- Venturing into cell manufacturing will boost margins and integration
- Increasing O&M portfolio provides stable long-term revenue visibility
Upcoming Events:
- Expanding distribution network to boost domestic sales
- Participating in large government solar bids pan-India
- Increase exports contribution to 40% from 30% currently
- Results of 1.2 GW manufacturing tender win from NTPC by March 2023
- Commissioning of new 2 GW plant at Vilayat, Gujarat
- Further capacity expansion announcements possible
The massive solar growth outlook, new segments, and Waaree’s growth initiatives reinforce strong revenue visibility and growth potential ahead.
Share Price History
Waaree Energies got listed on August 19, 2021. Here is a snapshot of its share price journey since IPO:
- IPO Listing Price: Rs 701 per share
- Share price surged 90% on listing day to hit a high of Rs 1,350
- Rose further to lifetime high of Rs 1,547 (121% over issue price) in November 2021
- Fell to 52-week low of Rs 408 in June 2022 (-42% from peak)
- Recovered around 70% from June lows to current level of Rs 690
- Generated returns of -2% since IPO as of Jan 2023 v/s Sensex returns of 6%
The share price has seen high volatility since listing, reacting to factors like financial performance, market conditions, competitive news etc. But long-term growth story remains intact.
Current Share Price
As of January 31, 2023, Waaree Energies share price is:
- Rs 690 on NSE
- Rs 689 on BSE
- Mcap: Rs 9,800 cr (at CMP of Rs 690)
- P/E ratio: 48x FY22 EPS
- P/BV ratio: 3.6x
Waaree is currently trading at around 48x FY22 EPS – the valuation multiples have moderated closer to historical mid-cap averages.
Shareholding Pattern
The shareholding pattern of Waaree as of December 2022, is:
- Promoters & Promoter Group – 75%
- Public & Non-promoter holding – 25%
- FII / FPIs – 5.7%
- DIIs – 3.5%
- Retail & HNIs – 15.8%
The high 75% promoter holding offers stability. FIIs, DIIs and retail account for over 25% providing good liquidity.
Strategies for Managing Risk & Maximizing Returns
Tips for investors to manage risks and maximize returns from Waaree Energies:
- Maintain portfolio allocation between 5% – 10% only
- Utilize volatility to accumulate in corrections – buy on dips
- Book partial profits if share price rises sharply in short term
- Have long-term investment horizon of 3-5 years
- Track order wins, capacity expansion updates, results
- Evaluate growth plans, management commentary on outlook
- Keep tabs on solar industry trends, policy changes, global events
- Limit trading – allow business performance to drive returns
- Don’t panic by sharp stock movements; focus on business fundamentals
By following a disciplined approach and having a long-term view, investors can benefit from Waaree’s strong solar sector growth potential.
Conclusion
Waaree Energies has established itself as one of the leading solar energy players in India on the back of its strong presence across manufacturing and EPC services. The company has an attractive business model, robust financial track record, long-term growth levers and a capable management team.
Waaree Energies share price has witnessed volatility since listing but long-term growth prospects remain strong driven by India’s renewable energy ambitions. By maintaining quality, competitiveness and execution, Waaree is well-positioned to deliver profitable growth and generate value for shareholders over the coming years. Investors should stay updated on the opportunities, challenges and performance trends to make informed investment decisions.
FAQ:
What is the IPO of Waaree Energies Ltd?
Waaree Energies Ltd completed its Initial Public Offering (IPO) in August 2021. The IPO price was Rs 515 per share. Through the IPO, Waaree raised around Rs 730 crore.
What is the old name of Waaree Technologies Ltd?
Waaree Energies Ltd was earlier known as Waaree Technologies Ltd. The company changed its name to Waaree Energies Ltd in January 2021 ahead of its IPO.
Who is the owner of Waaree energy?
Hitesh Doshi and his family members are the key promoters and owners of Waaree Energies Ltd. As per the shareholding pattern, the promoter and promoter group own 75% stake in the company.
What is the market cap of Waaree energy?
The market capitalization of Waaree Energies is around Rs 9,800 crore (as of January 2023) based on the current market price of around Rs 690 per share.
Where is the headquarter of Waaree Energies?
The headquarters and registered office of Waaree Energies Ltd is located in Mumbai, Maharashtra. The company has manufacturing plants located in Gujarat.
What business activities does Waaree Energies have?
Waaree Energies is engaged in two main business activities – manufacturing solar PV modules and providing EPC services for setting up solar power plants.
What is the current manufacturing capacity of Waaree for solar modules?
Currently, Waaree Energies has total solar module manufacturing capacity of around 2.5 GW. It has plants located in Gujarat.
Who are the major competitors of Waaree Energies?
A. Some of Waaree’s major competitors are Adani Solar, Tata Power Solar, Vikram Solar, Renew Power etc.
What are the key risks for Waaree Energies?
Key risks include high competition, execution challenges, regulatory changes, volatility in module prices and forex fluctuations.
What is the outlook for Waaree Energies?
The outlook is positive given the strong solar energy growth potential in India and Waaree’s capabilities across manufacturing and EPC services.
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