Waaree Energies "Ambitious capex amid sector challenges" (Neutral) Mahawar

Research evidence excerpt

Waaree Energies "Ambitious capex amid sector challenges" (Neutral) Mahawar

(03/26E) NM

should help it retain sector leadership, we believe disciplined balance-sheet

EPS (UBS, diluted) (Rs)

management and timely capex execution are critical given its ambitious capex plans.

From To % ch Cons.

Investors will also likely focus on the profitability and scalability of BESS manufacturing 03/26E 144.24 139.36 -3 139.07

(Rs100bn capex by Waaree) in a market that is currently largely dependent on imports. 03/27E 148.70 147.38 -1 160.69

03/28E 155.75 148.23 -5 173.09

Incremental returns on capex, execution to remain key focus for investors

Amit MahawarWith Rs300bn of capex planned over FY26–29 across both forward and backward

Analyst

integration, we think Waaree’s capex plan seems ambitious and aggressive. While we amit.mahawar@ubs.com

see strong strategic merit in cell and ingot-wafer expansions to preserve scale and +91-22-6155 6030

integration advantages, we think limited visibility on returns from newer adjacencies

Akshay Gattanisuch as BESS and glass, coupled with higher capital intensity, are likely to weigh on ROCE

more meaningfully for Waaree than Premier (Figure 6Backwardintegrationisbecomingastrategicimperative,butitshighercapitalintensityislikelytomoderateROCEs,whileearningsvisibilityinneweradjacenciessuchasBES,glasandinvertersremainslargelybackended). akshay-kumar.gattani@ubs.com

+91-22-6155 6044

Medium-term challenges persist; downgrade to Neutral

Harshita Surana

While we remain constructive on Waaree’s expansion strategy, persistent sector Associate Analyst

headwinds and lower DCR and non-DCR profitability lead us to cut FY27/28E EBITDA by harshita.surana@ubs.com

11%/5%. The impact on PAT (-1%/-5%) is limited, as lower below-the-line costs partly +91-22-6155 6066