Waaree Energies Ltd. recently announced its June quarter (Q1) financial results, which were weaker than anticipated, leading to a divergence of opinions among leading brokerages. The company's performance has sparked varied target price adjustments and recommendations across the market.
Brokerage Views: Underperform vs. Buy
Jefferies, a prominent foreign brokerage, maintained its 'Underperform' rating on Waaree Energies, setting the lowest target price among analysts at Rs 2,430. This implies a potential downside of 7.4 percent from the stock's recent closing price of Rs 2,624.90 on NSE. UBS and DAM Capital also held 'Neutral' calls on the stock.
Conversely, several other brokerages, including Nomura, Emkay Global, and Anand Rathi, reiterated their 'Buy' recommendations, albeit with revised and generally lower target prices. Nomura's target of Rs 3,740 is currently the highest on the Street, according to Bloomberg data. Nomura stated that its Ebitda estimates remained largely unchanged, as a reduction for the existing business due to the Q1 miss was offset by contributions from new verticals like Battery Energy Storage Systems (BESS). The firm maintains its 'Buy' rating with a target of Rs 3,740 based on 13 times FY28F EV/Ebitda.
Factors Behind the Q1 Performance and Future Outlook
Emkay Global cut its target price by 11 percent to Rs 3,800 from Rs 4,260, citing several factors that impacted Waaree's Q1 performance. These included weaker non-DCR (Domestic Content Requirement) demand following an extension of ALMM-II (Approved List of Models and Manufacturers) regulations, leading to higher spot sales at lower realizations. Additionally, reduced exports due to slower US customs clearances, partial OEM sourcing in the US, limitations on IRA (Inflation Reduction Act) benefits, and higher raw material costs contributed to the weaker numbers.
Despite these headwinds, Waaree's management has reiterated its FY27 Ebitda guidance of Rs 7,000-7,700 crore, expressing expectations for profitability to improve from Q2 onwards as these challenges subside. The company's cell production is projected to scale significantly, from 400MW per month currently to 1.2GW in Q2, 1.5GW in Q3, and further increases in Q4 as its new 10GW facility ramps up operations. Cell integration is also expected to rise from 20-25 percent to 65 percent by December 2026, which should support margin expansion.
Other Analyst Revisions
JM Financial described Waaree's Q1 as an “all-around miss,” noting that revenue was boosted by one-off sales, and adjusting for these, the print came in 6 percent below consensus estimates. Ebitda margin dropped to 14 percent from 19 percent in Q4FY26, and production declined 23 percent quarter-on-quarter to 3.2GW. JM Financial reiterated an 'ADD' rating with an unchanged target of Rs 3,296, pending further review.
- Anand Rathi: Target reduced to Rs 3,333 from Rs 3,718.
- Axis Capital: Target reduced to Rs 3,600 from Rs 3,800.
- UBS: Maintained target at Rs 3,100.
Investors are advised to consult with a qualified financial advisor before making any investment decisions, as this information is for informational purposes only.