India aims to ramp up its non-fossil energy capacity to around 450-500 GW by 2030, aiming to fulfil half of its energy needs from renewable sources. This strategy aims to slash the carbon intensity of its economy by 45% by 2030 and ultimately achieve net-zero emissions by 2070. 

Consequently, the renewable sector is poised to significantly contribute not only to meeting the nation’s carbon reduction goals but also to fulfilling the anticipated increase in power demand over the next ten years.

The worldwide transition to renewable energy sources, fueled by apprehensions regarding climate change and a push for sustainable practices, has notably boosted the demand for solar solutions.

Amid a global awakening to the significance of sustainable energy, Waaree Renewable Technologies Limited shines as a prime exemplar of innovation and dedication to forging a more environmentally conscious tomorrow.

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The stock has given a remarkable return of about 1,152 % in just one year. Over a period of five years, the stock has surged 61,859 %. The company recently announced its FY24 Q3 results, which showed a significant increase in profit after tax by 158% to Rs 64.46 crore, and revenue by 338% to Rs 73.88 crore.

Let’s delve into the article to understand the reasons for this extraordinary growth.

Corporate Overview Of Waaree Renewable Technologies

Waaree Renewable Technologies, commonly referred to as Waaree, is a prominent figure in the renewable energy sector, particularly renowned for its focus on solar energy solutions. Since its inception in 1989, the company has embarked on a remarkable journey, emerging as a pivotal player in India’s renewable energy arena. 

Waaree’s business operations span the entire solar value chain, ranging from the manufacturing of solar modules to delivering comprehensive solar energy solutions. Its product portfolio encompasses solar modules, inverters, water pumps, and solar lighting solutions, serving a diverse array of residential, commercial, and industrial sectors.

With a global footprint, Waaree has supplied solar modules totaling over 6 gigawatts in capacity to various destinations worldwide. Its products have reached 68 countries, underscoring the company’s significant role in promoting the global uptake of clean and sustainable energy practices.

Among its notable clients are industry giants such as Reliance Industries, Bharat Petroleum, Aditya Birla Group, Adani, and Jindal Steel and Power, among others, highlighting Waaree’s widespread influence and reputation in the market.

Business Segments Of Waaree Renewable Technologies

EPC Contracts

Waaree Renewable Technologies Limited actively engages in Engineering, Procurement, and Construction (EPC) contracts. In this segment, the company takes on comprehensive projects where it is responsible for the entire lifecycle of solar energy systems. This includes the design, procurement of materials, and construction of solar power plants.

Operation and Maintenance

Waaree’s Operation and Maintenance segment involves the ongoing care and management of solar energy systems. Once solar projects are operational, the company provides maintenance services to ensure optimal performance and longevity. 

Sale of Power

In the Sale of Power segment, Waaree Renewable Technologies Limited is involved in generating and selling solar power to customers. The company has solar farms or installations that produce electricity, and it enters into contracts to sell this power to end-users or utility companies.

Let’s understand the revenue breakup of their two main segments i.e. EPC contracts and the Sale of Power

Revenue (in ₹ crore)
SegmentsFY23FY22
EPC contracts341.4147.28
Sale of Power9.5614.21

The company earns the majority of its revenue from the EPC contracts contribution of about 97% of the total revenue while the Sale of power contributes about 3%. 

The Revenue from EPC contracts increased in FY23 by 131.80% while the revenue from the sale of power decreased by 32.72% YoY. 

Financials Of Waaree Renewable Technologies

FY2023FY2022FY2021FY2020
Revenue (in ₹crore)351162136
Net Profit (in ₹crore)559-2-3
ROE65.09%28.77%-10.62%-12.24%
ROCE62.74%36.45%4.15%0.98%

In the fiscal year 2023, Waaree Renewables Technologies saw a substantial increase in revenue, surging by 116% to reach ₹351 crore as opposed to ₹162 crore in FY2022. Analyzing a span of four years, encompassing FY2020 to FY2023, the company displayed a  Compound Annual Growth Rate (CAGR) of 288% in revenue.

Simultaneously, there was a noteworthy upturn in net profit, experiencing a 511% increase from ₹9 crore in FY2022 to ₹55 crore in FY2023. 

In FY23, Waaree Renewables Technologies maintained favourable financial metrics with a Return on Equity (ROE) of 65.09% and Return on Capital Employed (ROCE) of 62.74%.

Future Plans Of Waaree Renewable Technologies

Strong Order Book

The company has an unexecuted order book of 749+ MW and has completed 473+ MWpas orders as per the Q3FY24 report. 

Some of the recent big orders won by the company in Q3FY24 and Q2FY24 are a 70 MW Capacity Ground mounted solar power project, a 4.27 MW Capacity Rooftop solar power project, a 78 MWp Capacity Ground mounted solar power project, and a 73.92 MWp Capacity solar power project.

Embracing the Green Hydrogen Revolution

While Waaree Renewable Technologies Limited’s core business revolves around solar power projects, the company has recognized the immense potential of green hydrogen as a key component of the global energy transition. India’s ambitious target of generating 5 million tons of green hydrogen by 2030 presents a compelling opportunity for Waaree. 

The company has already secured a pilot project from a public sector undertaking to showcase its capabilities in this emerging domain. In a forward-looking move, WRTL is venturing into the Green Hydrogen space by setting up a 1 MW Green Hydrogen Plant. 

By actively exploring avenues in the green hydrogen space, Waaree Renewable Technologies is positioning itself as a forward-thinking player, ready to capitalize on the burgeoning demand for clean energy solutions. 

This strategic move not only aligns with the company’s commitment to sustainability but also underscores its vision of diversifying into complementary renewable energy segments.

Promising Growth Prospects Driven by Industry Tailwinds

The Indian solar power sector is poised for remarkable growth, backed by the government’s ambitious targets of achieving 206 GW of solar capacity by 2027 and 280 GW by 2030. 

This burgeoning demand, coupled with the nation’s commitment to transitioning towards a low-carbon economy, presents a fertile landscape for Waaree Renewable Technologies Limited. 

With an impressive unexecuted order book of 749 MW peak and a robust pipeline of 9 GW, the company is strategically positioned to capitalize on the industry’s upward trajectory. 

Its proven expertise in executing solar projects and delivering innovative solutions positions Waaree Renewable Technologies as a key player in driving the sustainable growth of India’s renewable energy landscape.

Conclusion

In conclusion, Waaree Renewable Technologies has demonstrated remarkable growth, driven by its innovative solutions and commitment to sustainable energy. With a strong order book, entry into the green hydrogen space, and favorable industry tailwinds, the company appears well-positioned for continued success.

What are your thoughts on the future prospects of Waaree Renewable Technologies Limited in the rapidly evolving renewable energy sector?

Written by Nalin Suriya 

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