Shares of Waaree Energies Ltd. experienced a significant downturn on Monday, falling almost 5% on the BSE after the US Customs and Border Protection (CBP) issued a finding that the solar company had evaded tariffs. The stock hit a low of Rs 2,862.50, erasing all its gains for 2026.
US CBP Ruling and Waaree's Response
The US CBP determined that Waaree Energies had circumvented tariffs on solar cells originating from Vietnam and Malaysia between 2021 and 2026. In response to the finding, Waaree Energies stated in a stock exchange filing that the determination was limited to a "narrow subset of certain historical import entries" and emphasized that it is not a final adjudication. The company also noted its right to seek de novo administrative and subsequent judicial review.
Analyst Perspective and Market Impact
JM Financial, a domestic brokerage, highlighted that the CBP's assertion of Waaree having a "four-year history of reporting the wrong country of origin" carries substantial reputational weight. This could potentially impact a significant portion of Waaree's substantial order book, estimated at Rs 53,000 crore (excluding retail business), of which 65-70% is tied to overseas long-term contracts for execution over the next 3-4 years.
Following the development, JM Financial maintained an 'ADD' rating on the stock but revised its target price downwards to Rs 3,185 from Rs 3,009.65. The brokerage cited the new 271.28% deposit requirement on flagged non-compliant entries as an added near-term cost.
Limited Downside and Key Monitorables
Despite the negative news, JM Financial suggested that the downside might be limited. The CBP confirmed that Waaree possessed sufficient non-Chinese cell production to cover its US shipments and chose not to issue a blanket adverse-inference ruling, restricting its findings to specific historical entries linked to Vietnam and Malaysia. This avoided a worst-case scenario where all of Waaree's imports could have been deemed tainted.
Going forward, JM Financial identified three key factors to monitor:
- The final quantum of retroactive duties once liquidation is completed.
- The outcome of any administrative or judicial appeals filed by Waaree.
- Any potential spillover effects on the pending 123.04% preliminary anti-dumping/countervailing duty (AD/CVD) determination covering India-origin solar imports.
It is important to note that while the EAPA case determination applies to materials found to have circumvented tariffs, separate, non-circumventing Waaree products are also subject to a preliminary 123.04% tariff levied by the U.S. Department of Commerce under an anti-dumping determination on solar imports from India, Indonesia, and Laos.