Waaree Energies Ltd Q2 FY26 Earnings Analysis

- Waaree aims to achieve sales/revenue of INR 5,500 to 6,000 crores in FY '26. - The company expects to ramp up Indosolar towards its full 1.3 GW capacity. - By 2027, Waaree plans to have: - 16 GW cell capacity - 26 GW module capacity - 10 GW ingot and wafer capacity - 3.5 GWh battery storage capacity - 3 GW inverter capacity - The EPC business has a strong 25+ GW order pipeline, including domestic and overseas projects. - Overseas revenues contributed 32% in Q1 FY '26, expected to stabilize around 20-30% long-term. - The US expansion will grow from 1.6 GW to 3.2 GW capacity within 6-9 months. - The company expects secular, multi-decadal demand growth driven by solar energy adoption and emerging sectors like AI data centers and electrification. - Further expansions and new subsidiary capacities like Sangam Solar One will support continued volume growth.

- Management targets FY '26 revenue between INR 5,500 to 6,000 crores with ramp-up in capacity and production. - EBITDA margins expected steady around 17-18% for modules; cell margins anticipated 300-400 bps higher due to integrated facilities. - By 2027, capacity expansions include 16 GW cell, 26 GW module, 10 GW ingot & wafer, and 3.5 GWh battery storage, aiming for significant scale-up. - Management plans to maintain or improve gross margins and EBITDA through cost management and supply chain optimization. - Indosolar ramp-up to its 1.3 GW capacity will contribute to earnings growth. - Full cell capacity utilization expected by end of current quarter, improving operational efficiencies. - Focus on increasing wallet share with customers to 85-90% via modules, EPC, batteries, and inverters, thus driving future revenue streams. - Strategic international expansion (US, EU, Middle East) also expected to enhance earnings. - Management to provide more precise guidance starting FY 2027 after consolidating current growth.

- Total announced capex of about INR 15,000 crores spread over the next 2 years, covering: - 4 GW recent expansion - 6 GW integrated facility - Adjacent businesses including battery manufacturing - Battery energy storage system factory in Rola, Gujarat with an investment of around INR 2,000 crores - Cell manufacturing facility aiming for 1 GW capacity costing around INR 750-800 crores per GW - US manufacturing capacity expansion from 1.6 GW to 3.2 GW planned within next 6 to 9 months, already fully booked - Focus on reverse integration in batteries up to cell level to boost Make in India efforts - Strategic acquisition of Indosolar integrated into group for Northern region market access - Continuous evaluation of new markets such as Middle East, Europe, Australia, and Pacific regions for EPC and exports

- Waaree Energies has announced a total capex of about INR 15,000 crores over the next 2 years for expansion including the 4 GW and 6 GW integrated facilities, battery, and adjacent businesses. - The company currently holds cash on the balance sheet of over INR 7,500 crores and is debt-free. - Funding mix plans include utilizing cash reserves, internal accruals over the next 2 years, and drawing on existing bank tie-ups as needed. - The management has been conservative on the debt-equity ratio and is comfortable with the planned approach. - While currently debt-free, the company will take on debt as and when required based on business needs but aims to maintain a strong balance sheet.

- Waaree Energies Limited's current order book is approximately 25 gigawatts, translating to around INR 49,000 crores or roughly $5.5 billion to $6 billion. (Page 19-20) - The order book comprises domestic and overseas projects, including the US and European Union markets. (Page 20) - The EPC segment has a pipeline exceeding 25 gigawatts, consisting of both domestic and overseas orders. (Page 26) - Project gestation periods vary: US projects typically take 2-2.5 years, while Indian utility-scale projects have shorter gestation of 8 months to around 14 months. (Page 20) - Company is actively pursuing expansion and diversification into new markets like the Middle East, Gulf, Australia, and EU countries. (Page 26) - Additional manufacturing capacity in the US (Texas) is being ramped up to meet the growing demand. (Page 18)