Waaree Energies Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives

3 Abhishek Pareek (CFO), Jignesh Rathod (Whole-time Director & CEO), Varun Goenka (President, Growth & Strategy)

Analysts

14 Anupam Goswami (SUD Life), Harshita Surana (UBS), Kaushal Sharma (Equinox Capital Venture), Kunal Shah (DAM Capital), Nirmal (Aditya Birla Sun Life), Nitin Kaushik (Afin Capital Private Limited), Prakhar Porwal (Ambit Capital), Praveen Sahay (PL Capital), Sabri Hazarika (Emkay Global), Sahil Sheth (Anand Rathi Institutional Equities), Sumit Kishore (Axis Capital), Suyash Kela (Singularity AMC), Venkatesha R.J. (Individual Research Analyst), Vishal (ValueQuest)

Financials & KPIs

Geographic & Segment Commentary

• India – Utility/IPP/C&I: Contributed 39.7% of Q1 revenue, deliberately down from 50–52% in FY25/FY26. Non-DCR offtake was deferred ahead of ALMM 2.0 effective June 1, but a six-month government extension supports recovery from Q2; DCR realizations held at $0.24–0.25/Wp.
• India – Retail: Revenue more than doubled YoY to ₹2,289 crore (+130% YoY); franchise and general partner network widening into smaller towns, with e-commerce scaling. Management expects ₹9,000–10,000 crore retail revenue for FY27; cash-and-carry retail is largely outside the stated order book.
• United States: 36% of the ₹61,500 crore order book; local revenue of ₹1,322 crore in Q1. Arizona 1.6 GW plant running ~59% utilization, expected at 75–80%; 2.6 GW additional US capacity coming in FY27; first 125 MW HJT order secured for Arizona.
• International Exports (ex-US): 24% of order book; direct export revenue ₹287 crore. Shipments and US clearances took longer than expected, but diversified supply chains enabled resumption from August; new markets opening in Europe, Middle East, Australia, and New Zealand (ECA signed for utility-scale solar + BESS in New Zealand).
• EPC, Storage & T&D: EPC/O&M/services at 8.9% of revenue. Waaree Renewable Technologies won a 1,520 MWh BESS EPC order; APSL acquisition (55% stake for ₹1,225 crore) extends reach into transmission & distribution; 17.6 MVA inverter duty transformers entered commercial production.

Company-Specific & Strategic Commentary

• Backward Integration: Cell-to-module integration to rise from ~20% to ~65% over 2–3 quarters as the 10 GW cell line ramps within FY27; 5.4 GW existing line producing 400+ MW/month. Ingot/wafer 10 GW construction started in Nagpur; strategic polysilicon stake in United Solar Holdings (Oman) for FEOC-compliant supply. Integrated module+cell margin profile cited at 35–41%.
• BESS Expansion: Automated BESS container production commenced at 5.15 GWh (vs 3.5 GWh originally planned); 3.5 GWh BESS cell capacity commercial within FY27 (90–95% construction complete, all equipment received), expanding to 16.5 GWh by FY29. FEOC-compliant cell pricing at $75–80/kWh vs Chinese cell pricing of $50–55/kWh.
• T&D & Power Electronics: 55% stake in Associated Power Structures acquired for ~₹1,225 crore; 20,000 MVA transformer, 4 GW inverter, and 1 GW electrolyzer capacities under build-out in FY27.
• US Manufacturing Platform: 1.6 GW operational with 2.6 GW additional module capacity in FY27; 125 MW HJT order validates technology in US market; ~$12–13 million IRA incentives accrued in Q1 on ~230 MW, with monetization (refund or sale of credits) expected from Q3/Q4.
• Retail & E-Commerce: Retail grew 130% YoY and is targeted at ₹9,000–10,000 crore for FY27; e-commerce platform reaching households, installers, and small businesses; orders largely incremental to the order book.
• Capital Deployment: ₹31,500 crore announced CapEx with ₹9,450 crore deployed by June 30; phased 30% FY27 / 40% FY28 / 30% FY29, milestone-gated; management states FY27 EBITDA guidance is broadly sufficient to fund projects; board approved up to ₹10,000 crore fundraise including QIP.
• Market Positioning: Largest non-Chinese module manufacturer at 26 GW; over 35 GW of modules deployed; ₹1,920 crore PLI approved for integrated wafer-cell-module capacity; TAM expected to double from ~$1 trillion to ~$2 trillion by 2030.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Margin decline and recovery levers

• Question: What drove the gross margin compression at the module business level this quarter, and how will margins recover? (Vishal, ValueQuest)
• Answer: DCR cell-integrated lines maintain a 35–40% margin profile; Q1 was hit by lower IRA realization from US OEM-based dispatches, softer non-DCR offtake ahead of ALMM 2.0, and slower US export clearances. Recovery levers: DCR cell output from 800 MW in Q1 to 1.1–1.2 GW in Q2 and 1.5 GW+ in Q3/Q4; US local capacity live from Q2; exports resuming from August; non-DCR offtake picking up within the six-month window. (Abhishek Pareek)

US profitability and export exposure

• Question: What is the margin profile of exports from India vs US local manufacturing? (Sweta, Anand Rathi Institutional Equities)
• Answer: Export realization is ~$0.25/Wp with $0.04–0.05/Wp EBITDA margin; US local manufacturing adds $0.07/Wp of IRA incentive (net $0.055–0.06/Wp after expenses), and structural conversion cost should fall by $0.01–0.02/Wp as the 1.6 GW ramps, taking US net EBITDA to $0.07–0.08/Wp. (Abhishek Pareek)
• Question: What gives confidence that export business can be serviced despite US tariffs, given export revenue fell to roughly one-third YoY? (Kunal Shah, DAM Capital)
• Answer: US local capacity is ramping to cover local clients, and alternate supply chains have been established — shipments to the US resume from Q2. The US market was in a six-month lull due to tariff confusion; order flow is returning, particularly solar + BESS tied to data center demand. (Abhishek Pareek, Varun Goenka)

Cell economics

• Question: What are imported vs locally manufactured cell prices today? (Praveen Sahay, PL Capital)
• Answer: Import price is ~$0.04–0.045/Wp; local manufacturing cost is $0.07–0.08/Wp; DCR market price is $0.12–0.13/W. (Abhishek Pareek)

IRA incentive monetization

• Question: What is the payment cycle for US IRA incentives? (Prakhar Porwal, Ambit Capital)
• Answer: Two options — file for refund or sell the credits; Waaree is in discussion with large US players to sell incentives. Quarterly cash receipts are expected from Q3/Q4, converting current accruals (~$12–13 million in Q1 on ~230 MW) into cash flow. (Abhishek Pareek)

BESS strategy and capital allocation

• Question: What volumes and earnings contribution should we expect from BESS this year? (Sabri Hazarika, Emkay Global)
• Answer: The 5.15 GWh container line is live; 3.5 GWh of BESS cell capacity will be commercial within FY27; a 1,500 MWh EPC order is already booked, which alone can absorb a year's production. FEOC-compliant cell pricing at $75–80/kWh vs $50–55/kWh for Chinese cells; markets span India, US, Europe, Australia, and New Zealand. (Abhishek Pareek)
• Question: What has been achieved against the BESS CapEx, and what contract visibility exists? (Sumit Kishore, Axis Capital)
• Answer: 90–95% of site construction is done and all equipment has arrived at site or ports; the pack line follows the container line within ~60 days. Two revenue streams: Make-in-India BESS solutions (utility plus PM Surya Ghar retail kits) and FEOC-compliant cell exports. (Abhishek Pareek)

QIP and funding

• Question: What is the strategy behind the planned QIP, and how much capital is actually needed? (Suyash Kela, Singularity AMC)
• Answer: Board/shareholder approval for up to ₹10,000 crore through various channels including equity; ₹7,000 crore cash on balance sheet as of June 30. FY27 CapEx (~30% of total) is largely deployed; FY28 absorbs ~40% and FY29 ~30%. EBITDA guidance is broadly sufficient to fund projects; the company will time the market for the QIP. (Abhishek Pareek)

Utilization and order book conversion

• Question: Can the 24 GW module capacity run at full utilization, and how much of the 25 GW order book delivers this year? (Nirmal, Aditya Birla Sun Life)
• Answer: Effective utilization has historically been 70–75%; with higher cell integration over the next 2–3 quarters, module offtake is expected to rise to 80–85%. (Abhishek Pareek)

Competitiveness without policy support

• Question: How would Waaree compete if PLI, DCR, and ALMM protections were removed? (Venkatesha R.J., Individual Research Analyst)
• Answer: Waaree grew at 20%+ CAGR with healthy ROCE before ALMM (2022); India's module cost is only $0.025–0.03/Wp above China, and the real competition is Southeast Asian suppliers, not China. Post-2028, the entire Indian market becomes DCR with full wafer integration. Separately, ₹1,920 crore of PLI is approved for integrated wafer-cell-module, but subsidies are treated as optional upside and not factored into internal project decisions. (Varun Goenka, Abhishek Pareek)

Backward integration margin expansion

• Question: What margin expansion should be expected once ingot/wafer and cell are fully integrated? (Nitin Kaushik, Afin Capital Private Limited)
• Answer: Integrated module+cell margin profile is 35–41% vs module-only; ingot/wafer adds further. No segment-specific margin guidance is provided. (Abhishek Pareek)

Solar glass capacity

• Question: Is the 2,500 TPD solar glass plan greenfield or an acquisition? (Kaushal Sharma, Equinox Capital Venture)
• Answer: Board approval covers 3,500 TPD of captive glass capacity; greenfield is the intent, while remaining open to supply security through various channels. Update expected in the next quarter; glass is the second-largest value element in a module after cells. (Abhishek Pareek)

Key Takeaway

Waaree Energies delivered Q1 FY27 revenue of ₹7,932 crore (+79.2% YoY) and a record order book of ₹61,500 crore (+₹16,000 crore net new orders), but operating EBITDA margin compressed to 18.2% on raw material cost inflation, deferred non-DCR offtake, and slower US export clearances. Strategic milestones included 3 GW module commissioning at Samakhiali, the 5.15 GWh BESS container line going live, and the ₹1,225 crore APSL acquisition (55% stake) extending reach into T&D. Management reaffirmed FY27 operating EBITDA guidance of ₹7,000–7,700 crore, underpinned by cell-to-module integration rising from ~20% to ~65% in 2–3 quarters, US module utilization heading to 75–80%, export resumption from August, and retail revenue targeting ₹9,000–10,000 crore (+130% YoY in Q1). Key watch items are raw material volatility, US trade policy shifts, and execution of the ₹31,500 crore three-year CapEx program, with the stated aspiration of ~₹1 lakh crore revenue in 4–5 years.