Waaree Energies: Q1FY27 - Near-term margin headwinds persist

Research evidence excerpt

Waaree Energies: Q1FY27 - Near-term margin headwinds persist

l Rs90-100bn for FY27. UBS Cons.

03/26E 139.36 139.07

Management commentary and growth outlook 03/27E 147.38 160.40

a) Management reiterated its FY27 EBITDA guidance of ~Rs70-77bn, with higher cell 03/28E 148.23 172.52

integration (35-40% margin on cell-integrated lines) expected to support profitability. b)

Amit Mahawar

Capacity ran ahead of dispatches in Q1, leading to inventory build-up; however,

Analyst

management indicated that the inventory is already tied to confirmed H2 dispatch amit.mahawar@ubs.com

schedules, with order book conversion supporting near-full capacity coverage in H2. c) +91-22-6155 6030

Export dispatches were softer in Q1 due to longer-than-expected clearance timelines. d)

Akshay Gattani

Management expects cell production to exceed 5GW in FY27/10GW in FY28, which

should meaningfully improve captive integration. e) On the US business, exports from akshay-kumar.gattani@ubs.com

India generate 4-5 cents/wp, while modules manufactured and sold within the US could +91-22-6155 6044

deliver 7-8 cents/wp margins (including IRA benefit) once the facility ramps (expects

Harshita Surana

400-450MW volumes from Q3). Associate Analyst

harshita.surana@ubs.com

UBS View: Retain NEUTRAL amid near-term margin pressure +91-22-6155 6066

Larger, backward-integrated players remain well positioned to benefit from the DCR

opportunity; however, weak profitability in the non-DCR business and the ongoing

ramp-up of US operations are likely to keep earnings under pressure in the near term for

Waaree. While we remain constructive on Waaree's long-term expansion and

integration strategy, cell ramp-up and US operations remains a key monitorable. Given