In a significant boost for renewable energy investors, Nuvama Institutional Equities has initiated coverage on Waaree Energies Limited with a resounding ‘BUY’ recommendation and a target price (TP) of INR 2,805. This reflects a potential upside of 19% from its current trading price of INR 2,238, marking a bold vote of confidence in the company’s multi-decade growth strategy.
Why Nuvama is Betting Big on Waaree Energies?
1. Beyond Solar: Transforming into a New Energy Powerhouse
Becoming a New Energy Giant, Waaree Energies is not just a solar module manufacturer, it is transforming into a fully integrated New Energy Company, diversifying into green hydrogen, electrolyzers, advanced lithium-ion cells, battery energy storage systems (BESS), and inverters. This forward-looking strategy puts Waaree at the heart of India’s renewable revolution.
2. Capacity Expansion: Building the Future Today
Waaree’s planned capacity ramp-up is massive. The company is looking to increase module capacity by 25%, cell capacity by 8 times and wafer capacity by 6 GW. This will drive revenue, EBITDA and PAT CAGRs of 30%, 54% and 61% over FY24-27. That’s massive growth.
3. Margins to Rise with Premium Realisations
Short-term margin temporary moderation is expected, but Nuvama expects EBITDA margins to reach 23% by FY27. Government initiatives like ALMM and DCR will ensure premium realisations for domestic manufacturers. Premier Energies’ 30% EBITDA margin in Q3FY25 is proof of what’s possible for Waaree.
4. Strategic De-Risking: Securing Long-Term Stability
Waaree’s holistic strategy of vertical and horizontal integration is designed to de-risk its business model. Its ventures into green hydrogen, electrolyzers, and battery storage will serve as critical growth drivers, cushioning the company from potential fluctuations in the highly competitive solar module market.
5. Valuation Backed by Strong Fundamentals
Nuvama has placed a premium valuation on Waaree Energies, valuing it at 11x FY27E EV/EBITDA. The bullish stance is reinforced by solid financial projections: revenue is expected to soar from INR 11,397.6 crore in FY24 to INR 25,229.9 crore by FY27; EBITDA from INR 1,574.4 crore to INR 5,762.7 crore; and adjusted profit from INR 895.8 crore to INR 3,732.1 crore.
How Does This Compare with Other Analysts?
While Kotak Equities and Jefferies have set price targets of INR 2,280 and INR 2,040, respectively, Nuvama’s far higher TP of INR 2,805 indicates greater conviction in Waaree’s integrated business model and growth prospects.
Industry Outlook: A Y2K-Like Inflection Point
Nuvama draws a compelling analogy between the current phase of India’s renewable energy sector and the Y2K-fueled IT boom of the 1990s. The solar energy industry is on the brink of exponential J-curve growth, likely to spill over into green hydrogen and eventually, green ammonia, where India could become a global leader.
Risks: Awareness and Preparedness
Nuvama acknowledges risks like tariff cuts, evolving technologies, and the possibility of module oversupply. However, the brokerage firm has modeled these imponderables and estimates a sustainable nominal free cash flow CAGR of 17% over FY24–45, showcasing preparedness for any potential headwinds.
Conclusion: A Rare High-Conviction Investment Opportunity
With its aggressive scaling strategy, early-mover advantage in new energy verticals, robust financial health, and strategic government support, Waaree Energies appears set to become a dominant force in India’s renewable energy landscape. Nuvama’s ‘BUY’ call with a TP of INR 2,805 reflects not just optimism but a well-researched conviction in Waaree’s long-term potential.
For investors seeking exposure to India’s renewable energy megatrend, Waaree Energies is increasingly looking like a flagship investment that could ride the next wave of clean energy revolution.