Nuvama sees Waaree Energies shares rallying 25%, initiates coverage with buy rating

Nuvama Institutional Equities has initiated coverage on Waaree Energies with a ‘buy’ rating and a target price of Rs 2,805 per share, implying an upside of 25% from current levels, citing the renewable energy firm’s aggressive capacity expansion and strategic backward integration plans that position it to capture multi-decadal growth in India’s renewable energy and green hydrogen sectors.

The brokerage said it expects Waaree’s revenue and EBITDA to grow at a compounded annual rate of 30% and 54%, respectively, over FY24–27, driven by a strong order book, capacity ramp-up, and margin expansion. «Waaree is prudently executing a long-term strategy of becoming a horizontally and vertically integrated New Energy play,» Nuvama said in a report.

Waaree, which operates one of India’s largest solar module businesses, is shifting focus from moderate-margin ALMM-compliant modules to high-margin DCR modules, a move Nuvama believes will significantly boost profitability. The company’s order book stood at 26.5 gigawatts valued at Rs 500 billion as of December 2024.

Nuvama said backward integration into solar cell and wafer manufacturing is expected to be margin-accretive, lifting Waaree’s EBITDA margin to 23% by FY27 from 14% in FY24. It estimates the start-up of Waaree’s solar cell plant could generate incremental annual EBITDA of Rs 20 billion, though it has conservatively factored in Rs 8 billion for FY26.

Waaree plans to expand its solar module capacity to 21 GW, solar cell capacity to 11 GW, and wafer capacity to 6 GW by