WAAREEENER

’s Global Expansion and DCR Compliance Could Offset Risks

saw its stock fall 10.4% after US authorities imposed countervailing duties on solar imports from India, citing unfair subsidies. With 30–35% of revenue from exports and US operations, investors worried about margin erosion and export viability. However, Waaree clarified that duties apply to cell imports, not module assembly, and contractual pass-through clauses should protect margins. Strong US manufacturing presence, IRA-linked incentives, and aggressive capacity expansion reinforce its long-term growth story, even as policy risks and competition loom. - US Duties: Apply to solar cell imports; Waaree imports from regions with ~10% duty on module assembly. - Margin Protection: Pass-through clauses in contracts mitigate duty impact. - US Manufacturing: 2.6 GW capacity, expanding to 4.2 GW by June; IRA incentives added ₹80 crore in Q3FY26. India Operations & Expansion - Current capacity: 21.2 GW modules, 22% domestic market share. - FY28 roadmap: 30.4 GW modules, 18.4 GW cells, 10 GW wafers/ingots. - Backward integration: New 5.4 GW cell facility to ensure DCR compliance, boosting realizations by >40%. Financial Performance - Q3FY26 revenue: ₹7,565 crore, more than doubled YoY. - EBITDA margin: 25.6%, up sharply. - Order book: ₹60,000 crore, up from ₹47,000 crore in Q2. Risks & Challenges - Heavy capex raises execution complexity. - Overseas exposure: ~65% of order book focused abroad, vulnerable to US trade actions. - Provisioned ₹300 crore for anti-China measures, diversifying sourcing beyond China. - Competition: Entry of Reliance and Adani could drive overcapacity risk post-FY27. Valuation & Outlook - Stock correction pushed EV/EBITDA down to 10x FY27 estimates (Bloomberg). - Market reaction reflects policy anxiety more than business fragility. - Outlook: Strong execution, backward integration, and US expansion provide resilience, but sustained investor confidence hinges on managing trade risks and competitive intensity.