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Founded in 1990, Waaree Energies Limited (WEL) is India's largest solar module manufacturer and exporter. Between FY20 and FY24, its installed capacity surged 6x, reaching 13.3GW (up from 2GW in FY21), giving WEL a dominant 21% share of the domestic market and an impressive 44% share of India's solar module exports. WEL is currently establishing an 11.4GW integrated manufacturing facility, which includes a 5.4GW solar cell unit expected to be operational by FY25, and a 6GW fully integrated facility for ingots, wafers, and solar cells by FY27. This vertical integration aims to improve operational efficiency, lower costs, and reduce reliance on external suppliers. As solar energy plays a critical role in the global shift toward renewables, WEL is well-positioned to leverage this opportunity, backed by its market leadership, financial strength, and commitment to innovation and sustainability.

Dominating India's Solar Module Market:

Waaree Energies Limited (WEL) is a key player in India's solar energy market, boasting an installed capacity of 13.3GW. WEL is over 3x the size of its nearest competitor. Its consistent R&D investment, alongside the global shift towards green energy, has solidified its position, accounting for 44% of India's total solar module exports. WEL's strong 19.9GW order book (as of FY24) reflects its trusted client relationships and widespread product acceptance.

Achieving Expansion Through Backward Integration:

WEL is set to grow its capacity to 20.9GW by FY27, including the development of a U.S. manufacturing facility with an initial 1.6GW capacity, scalable up to 5GW by FY27. This growth is further supported by ongoing expansions in India, including a 5.4GW solar cell manufacturing facility (expected by FY25) and a fully integrated 6GW facility (by FY27). These expansions, along with WEL's commitment to high-efficiency solar modules through innovation and R&D, keep the company at the forefront of solar technology.

Industry-Leading Financial Performance:

WEL has experienced impressive financial growth, driven by a 6x capacity expansion, favourable industry dynamics, and improved operational efficiency. Over FY21-24, WEL achieved a robust CAGR of 80% in revenue, 154% in EBITDA, and 204% in PAT. The company's prudent capital allocation, limited equity dilution, and low leverage contribute to its industry-leading ROE and ROCE.

Valuation and View:

By 2027, the company plans to achieve significant capacity expansions, targeting 11.4 GW of solar cell manufacturing, 20.9 GW of module manufacturing, and 6 GW of ingot and wafer production. At the upper price band, the expected market capitalization stands at approximately ?39,500 crore, implying a P/E ratio of 31 and an EV/EBITDA multiple of 23. Given the company's robust growth trajectory, strategic capacity expansion, and market leadership, we recommend a SUBSCRIBE to the issue.

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