Waaree Renewable Technologies LtdQ2 FY23Electrical Equipment

Waaree Renewable Technologies Ltd

Q2 FY23 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Revenue guidance

Category 2

→The company has a robust order backlog of around 856 megawatts, intending to execute this within the next 9 to 12 months, indicating strong near-term revenue visibility.
→With annual installation targets increasing to 40-50 gigawatts from 2024-25 onwards, the addressable EPC market is estimated at 20-25 gigawatts per year, offering significant scope for growth.
→The management forecasts that margins will sustain or improve, backed by a growing topline and increasing executed volumes.
→The pipeline of potential orders stands at approximately 3 gigawatts, with typical order finalization taking 6-9 months.
→Pricing competitiveness, especially matching landed costs of imports (around 24-25 cents per watt), supports order wins.
→An expanding O&M business portfolio (currently 490 MW) with high-margin potential is also expected to contribute to revenue growth.
→Overall, the company envisions steady to improving revenue and volume growth driven by market expansion and strong order execution.

Category 3

→The company expects revenue growth driven by a strong order backlog of 856 MW and plans to execute these orders within the next 9-12 months.
→Margins have been increasing year-on-year and are expected to sustain or improve, with EBITDA margin guidance in the range of 12% to 15% on a full-year basis.
→The O&M business is a high-margin segment, delivering EBITDA margins of around 30%-35%, and the company aims to expand this portfolio.
→Domestic solar panel demand is expected to grow to 40-50 GW annually in the next two years, with total supply capacity between 60-80 GW, suggesting a balanced demand-supply scenario.
→Despite competitive pricing pressures, domestic manufacturers like Waaree are able to maintain decent margins.
→The company foresees good traction and increasing enquiries due to falling module prices, potentially boosting EPC contracts and revenue.
→No forward-looking statements on exact earnings, but overall expectations are positive for topline and profits.

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→There is no specific mention of current or future fundraising through debt or equity for Waaree Renewable Technologies Limited in the provided transcript.
→The parent company is planning a public issue in the near future, but details on fundraising for Waaree Renewable Technologies Limited itself are not provided.
→The company is focusing on executing its existing order book and expanding its EPC and O&M businesses.
→Capex for Waaree Renewable Technologies Limited is minimal as it mainly operates in EPC and O&M, unlike the parent company which may incur capex based on demand and supply.
→Listing on NSE for Waaree Renewable Technologies Limited is under procedure, dependent on regulatory fulfillment, but timing is uncertain.

Yes

→The company has an unexecuted order book of approximately 856 megawatts as of Q1 FY24.
→They successfully executed 96 megawatts in Q1 FY24.
→They intend to complete the pending 856 megawatts of orders within the next 9 to 12 months.
→In the previous call, the company mentioned they would execute around 817 megawatts in 12 to 15 months.
→The current order book indicates they are on track or ahead of previous guidance.
→There is a healthy pipeline of around 3 gigawatts under discussion and potential finalization.
→Typically, it takes about 6 to 9 months to finalize new orders.

Yes

→Waaree Renewable Technologies (the EPC company) does not require significant capex as it mainly focuses on EPC and O&M businesses, with limited IPP activities.
→The parent company, involved in module manufacturing, plans to incur additional capex depending on demand and supply conditions.
→There is an ongoing process for the parent company's listing, indicating strategic financial moves but no specific new capex detailed for Waaree Renewable Technologies.
→For the parent company, backward integration investments such as manufacturing cells, wafers, and ingots suggest continuous capex in renewable manufacturing over the next 3-4 years.
→No immediate aggressive capex plans disclosed for Waaree Renewable Technologies, whereas the parent company may continue capex based on market demand.

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