Prabhudas Lilladher issued a buy rating for Waaree Energies with a target price of Rs 3115. The company reported 23.8% revenue growth, though EBITDA fell 5.9% due to lower exports. Management expects better margins soon as they use new solar cell facilities and grow their retail business to reach higher targets.

Prabhudas Lilladher's research report on Waaree Energies Waaree Energies (WAAREEEN) reported a 23.8% YoY growth in revenue however, EBITDA declined 5.9% YoY with EBITDA margin contracting 550bps to 17.6%. Profitability was impacted by a sharp decline in exports from India amid uncertainty surrounding US Section 232 tariffs and the consequent rationalisation of export orders. Sequentially, margins improved on supported by higher cell production and improved utilisation at the US module manufacturing facility. Going forward, management expects margin expansion, driven by the commissioning of the 10GW solar cell facility, higher utilisation of US manufacturing facilities, and improved US realizations following the implementation of minimum import price regulations. The company reported a robust order book of ~INR592bn (25.6GW module orders), while retail revenue surged 252.9% YoY to INR34.6bn in Q2FY27, accounting for 46.1% of revenue; management expects retail revenue to reach INR100-110bn in FY27. Domestic US manufacturing revenue grew 113% YoY in H1FY27, with US module manufacturing capacity expected to reach 4.8GW by Mar'27, including an additional 1.6GW capacity scheduled to become operational in Q3FY27. The company reiterated its FY27 operating EBITDA guidance of INR70-77bn and remains on track with its ~INR300bn capex Programme, including the 10GW cell expansion, 5GWh BESS containerization facility, 3.5GWh battery cell manufacturing, 4GW inverter capacity and 20,000 MVA transformer capacity. These investments are expected to strengthen backward integration, improve operating leverage and support margin expansion over the medium term. we estimate revenue/EBITDA/PAT CAGR of 22.5%/16.4%/8.9% over FY26-29E. Outlook We maintain 'BUY', with TP of INR3,111 (same as earlier) valuing at 10x EV of Sep'28E EBITDA with an implying PE of 19x Sep'FY28E. For all recommendations report, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. Waaree Energies - 2910026 -prabhu