Waaree Energies Gets Motilal Oswal's 'Buy' As It Initiates Coverage, Sees 19% Upside — Details Inside

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Motilal Oswal Report

We initiate coverage on the solar cell and module manufacturing sector, with a Buy rating on Waaree Energies Ltd. and a target price of Rs 4,000.

Valuation:

The valuation of Waaree Energies has been derived through a sum-of-the-parts (SoTP) methodology, resulting in a target price of Rs 4,000/share. The domestic module business is valued at 15x FY28E Ebitda, representing a premium to global peers.

The US module business is valued at 12x FY28E Ebitda, which is in line with global peers.

The new business segments, of which over 74% of the contribution is attributed to the EPC and O&M businesses, is valued at 11x FY28E Ebitda, consistent with domestic peer valuations. The sum of these segment valuations (adjusting for net debt) results in a target price of Rs 4,000/share, capturing a comprehensive value of Waaree Energies’ diversified operations.

Upside risks:

1. slower-than-expected ramp-up of industry cell capacity in FY27- 28,

2. the government formalizing the localization directive for wafers and ingots (similar to ALCM).

Downside risks:

1. Intensifying competition from large domestic players may pressure pricing and margins;

2. Heavy US market reliance heightens sensitivity to policy, tariff, and geopolitical shifts;

3. If backward integration initiatives (cells, ingot-wafer, and other upstream operations) fail to scale effectively, profitability and competitiveness may be undermined;

4. the company’s aggressive foray into capital-intensive cell and ingot/wafer manufacturing increases exposure to execution and stabilization risks, potentially impacting timelines, costs, and near- to medium-term financial performance.

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