Waaree Renewable Technologies Ltd (WAAREERTL) Concall Report Analysis & Insights

Waaree Renewable Technologies Ltd

| Q4 & FY26 Earnings Conference Call

BULLISH SENTIMENT

⬤24th Apr 26

Summary : Waaree Renewable Technologies delivered strong FY26 financial results with record execution, maintaining healthy margins and a robust order book, while strategically expanding into IPP and BESS projects.

Management Perspective positive : Management highlighted record execution, strong financial growth, and a healthy order book. They expressed confidence in future opportunities, including BESS, and their ability to maintain margins and fund IPP projects internally. The overall outlook for the renewable sector in India was described as strong.

Concall Report Analysis & Insights

Business Overview

Q4 FY26 revenue from operations grew 131.31% year-on-year to INR 1,102.40 crores.
EBITDA for Q4 FY26 was INR 206.82 crores with an 18.76% margin.
PAT for Q4 FY26 increased 66.08% year-on-year to INR 155.72 crores.
FY26 revenue grew 108.51% to INR 3,331.42 crores, with PAT up 109.09% to INR 478.65 crores.
Successfully executed 2,727 MWp projects in FY26, the highest for any year.

Future Growth Prospects

Unexecuted order book of 2.8 GWp provides strong business visibility for 12-15 months.
O&M portfolio of 1.18 GWp strengthens recurring revenue base.
Expanding into Battery Energy Storage System (BESS) EPC offers new opportunities.
Actively participating in tender business, including BESS projects.
Chasing an order pipeline of 36 GW, with 23 GW domestic and 12 GW international.

Management Insights

Strong execution capability and operating leverage are being built across the business.
The company maintains an EBITDA margin above 19% for the full financial year.
IPP projects are funded internally, with no significant debt tied up.
Order execution is prioritized for projects suitable to margin and risk-reward metrics.
Domestic sourcing of components helps mitigate raw material inflation and supply chain issues.

Signs of Skepticism

Analyst noted a slight decrease in order inflow (2.4 GW to 2.3 GW) year-on-year.
Questions arose regarding the 15% target margin versus the 19% achieved, implying potential future margin compression.
Uncertainty about the exact composition (module/non-module) and value of the order book.
Concerns about potential slowdowns in execution due to grid infrastructure or land acquisition issues.
Increase in trade receivables and inventory raised questions about working capital normalization.

Risk Factors

Potential for aggressive bidding by new entrants impacting margins.
Order inflow outlook may be affected by delays in land acquisition and substation clarity.
Execution rate can vary based on the type and scope of orders.
Working capital (receivables and inventory) increased, but expected to normalize.
Dependency on customer-provided land and connectivity for EPC projects.

Good To Know

India's total installed renewable capacity exceeds 274 GW, with solar contributing over 150 GW.
Solar capacity additions in FY26 were 44 GW, up from 23.83 GW in the previous year.
Stable policy frameworks like National Solar Mission and PM KUSUM support growth.
Battery Energy Storage Systems (BESS) are emerging as a key enabler for grid stability.
The company has 54 MWp of operational IPP assets, generating INR 26 crores revenue in FY26.

Key Drivers

Strong execution capability drives growth.
Robust order book ensures revenue visibility.
BESS market expansion offers new opportunities.
Supportive government policies boost sector.

Key Analyst Discussions

Competitive Environment

New entrants are bidding aggressively, but the company participates only if margins are suitable.
Management believes their operational efficiency helps maintain margins despite competition.
Order inflow is influenced by customer negotiations and project specific requirements.
The company does not directly deal with modules, which are mostly procured by developers.
Pricing of modules is passed through to the customer, mitigating cost rise impact.

Market Trends & Consumer Behavior

Momentum in India's renewable energy sector remains strong, driven by solar.
Policy frameworks support demand across utility, rooftop, and decentralized segments.
BESS tenders are opening up new opportunities in the EPC ecosystem.
Everyone wants green energy, ensuring continued pace of solar project installations.
The company receives many inquiries for BESS projects alongside solar projects.

Financial Highlights

Q4 revenue realization was high due to execution of orders with modules.
EBITDA margin for FY26 was maintained above 19.24%.
Management targets a 15% EBITDA margin, but consistently delivers higher.
Cash flow generation saw a slight drop in FY26, with cash conserved for IPP projects.
Significant increase in non-current financial assets includes GST receivables and supplier advances.

Product Composition

Q4 revenue mix was approximately 50% from orders including modules.
Order book composition with modules is around 20% in megawatt terms.
The company primarily focuses on ground-mounted solar projects.
Rooftop projects contribute very little to current revenue streams.
Pure EPC and turnkey EPC projects have similar margin categories.

Strategic Considerations

Company is setting up over 200 MWp of additional IPP projects, funded internally.
IPP strategy focuses on smaller projects for continuous revenue streams.
BESS EPC is being considered as an avenue, with one small project underway.
Land acquisition is primarily the developer's responsibility before EPC contracts are awarded.
No current revenue from BESS or data centers, but inquiries are increasing.