Waaree Energies Gets Jefferies Downgrade Despite 25% Stock Rally

While Jefferies sees profits inflecting meaningfully over financial year 2027, much of the near-term upside is already priced in following the recent share price rally. (Photo source: X/@waareegroup)

Jefferies has downgraded Waaree Energies Ltd. from 'hold' to 'underperform', despite a strong fourth quarter performance and positive financial year 2026 guidance. The downgrade follows a sharp 25% rally in the stock over the past month.

However, the target price has been raised to Rs 2,100 from Rs 2,030, acknowledging the company's improving fundamentals, while flagging potential near-term risks.

Waaree delivered a solid fourth quarter, with revenue rising 36% year-on-year to Rs 4,000 and Ebitda growing 121% to Rs 920 crore, both ahead of expectations.

Profit reached Rs 620 crore, up 140% year-on-year, the brokerage noted. Strong volume growth, particularly in the EPC segment, helped offset a 22% fall in realisations, leading to improved margins at 6.3 cents/Wp compared to 5.9 cents/Wp last year.

Looking ahead, management has guided for over 100% Ebitda growth in fiscal 2026, driven by expanded capacity and stronger contributions from overseas markets, especially the US. Capacity utilisation of the 1.4GW PERC line has reached 90%, and Waaree expects to maintain a healthy 2–2.5 years of visibility on its order book.

The company is also doubling its US capacity and expanding Indian operations to 22.5GW, the brokerage pointed out. A new 3.2GW plant and module ramp-up are planned, with significant output expected from second half of this fiscal.

However, Jefferies flags several concerns. In the US, module inventories are high, and without new tariff protections, import volumes may fall in fiscal 2026. In India, the reinstatement of the Basic Customs Duty from June 2026 and weaker non-DCR project economics may impact demand from second half of financial year 2027 onwards. In addition, the fourth quarter order book declined 5% quarter-on-quarter to 25.6GW, with lower contributions from overseas markets.

While Jefferies sees profits inflecting meaningfully over financial year 2027, much of the near-term upside is already priced in following the recent share price rally, it said. The revised target price reflects long-term confidence in Waaree's growth path, but the downgrade signals caution due to stretched valuations and emerging sector headwinds.