Waaree Energies (WAAREEEN IN) – Q4FY26 Result Update – Integration-led cost benefits to aid margins ahead – BUY

Waaree Energies (WAAREEEN) Reported softer realizations in Q4FY26, with margin contraction driven by higher commodity costs (silver, copper), elevated logistics costs amid Middle East disruptions, and lower export contribution to the mix. Order book remains strong at ~Rs53bn, with ~65-70% from overseas markets, providing multi-year revenue visibility. G12R upgrades, expected to be completed by Q1/Q2FY27, are likely to drive ~10-12% improvement in production from current levels. The company has increased its total capex plan to ~INR 300bn across verticals to strengthen its transition into a fully backward integrated player. The company aims for ~85% utilization of its expanded 15.4GW cell capacity, primarily driven by DCR demand and higher in-house integration. US capacity of 1.2GW is set to scale up to 4.2GW over the next six months, enhancing its presence in the US market. Working capital increased in Q4FY26, primarily led by a build-up in inventory & receivables as export shipments were delayed due to Middle East logistics disruptions (shipping congestion, higher transit time). management indicated that this is largely temporary phenomena, and inventory is expected to convert to revenue in the near term as logistics normalize, thereby improving working capital cycle going forward. We estimate revenue/EBITDA/PAT CAGR of 21.9%/21.7%/17.3% over FY26-28E. We upward revise our FY27/FY28 earnings estimates by 4.9%/6.5% driven by cost benefits from backward integration and a higher DCR mix. We maintain ‘BUY’, with TP of Rs3,713 (earlier 3,600) valuing at 12x EV of Mar’28E EBITDA with an implying PE of 18x FY28E