Waaree Energies, a prominent Indian solar module manufacturer, experienced a nearly 2% increase in its share price on , following the announcement of a significant order to supply 500 megawatts (MW) of solar modules to a domestic solar power developer and independent power producer (IPP). The shares reached Rs 2,965.60 apiece during morning trading, extending gains for the third consecutive session.
The contract, valued at an undisclosed amount, is a one-time agreement for the financial year . Waaree Energies will deliver the entire 500 MW of modules within the timeframe stipulated in the agreement. The company did not disclose the name of the customer, citing confidentiality.
This order arrives as Waaree Energies continues to pursue expansion plans, including a potential greenfield manufacturing facility for Lithium-Ion Advanced Chemistry Storage Cells and Battery Energy Storage Systems (BESS). The company is currently in discussions with the governments of Andhra Pradesh and other states regarding the establishment of this facility. This move is part of a broader strategy to increase its capacity from 3.5 gigawatt-hours (GWh) to 20 GWh, requiring an estimated capital expenditure of approximately Rs 8,000 crore through its wholly-owned subsidiary, Waaree Energy Storage Solutions Private Limited (WESSPL). The board of WESSPL approved these plans on .
The positive market reaction to the order underscores investor confidence in Waaree Energies’ growth trajectory. The company’s recent financial performance further supports this optimism. In the third quarter, Waaree Energies reported a 26% quarter-on-quarter increase in net profit, reaching Rs 1,062 crore, compared to Rs 842 crore in the previous quarter. Revenue also saw a substantial rise, increasing by 24.7% sequentially to Rs 7,656 crore from Rs 6,065 crore.
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the third quarter increased by 37.2% quarter-on-quarter to Rs 1,928 crore, up from Rs 1,405 crore in the second quarter. The EBITDA margin improved to 25.5% from 23.2%, reflecting increased operating leverage. This indicates the company is becoming more efficient in generating profits from its revenue.
The solar module supply order is particularly noteworthy given the increasing global focus on renewable energy sources. India, in particular, has set ambitious targets for solar energy capacity, creating a robust demand for solar modules. Waaree Energies is well-positioned to capitalize on this demand, both domestically and internationally.
While the 500 MW order represents a significant win for Waaree Energies, it is a one-time contract. The company’s long-term success will depend on its ability to secure a consistent stream of orders and successfully execute its expansion plans, including the potential BESS manufacturing facility. The talks with state governments regarding the BESS facility are crucial, as the battery storage market is expected to grow rapidly alongside solar energy deployment, addressing intermittency challenges.
The company also recognized a one-time provision of Rs 7.14 crore in the third quarter to account for new labor codes, impacting employee benefits expense. This highlights the evolving regulatory landscape and the need for companies to adapt to changing labor laws.
Shares of Waaree Energies had already risen over 8% in the month leading up to the announcement of this order, suggesting a pre-existing positive sentiment among investors. The latest news is likely to further bolster the company’s stock performance, at least in the short term. However, sustained growth will depend on continued strong financial results and successful execution of its strategic initiatives.
The broader market context also contributed to the positive sentiment. On , the Sensex rose 480 points, and the Nifty surpassed 25,700, indicating a generally optimistic outlook for the Indian stock market. Other notable gainers included Adani Ports, which rose 3%, and Dr. Reddy’s, which increased by 2%.
