WAAREERTL - WAAREE RENEWABLE TECHNOLOGIES LIMITED Share Price

In the earnings conference call held on April 17, 2025, management of Waaree Renewable Technologies Limited provided a strong outlook highlighting significant growth in revenue and robust market dynamics. The company reported a revenue of INR 1,597.75 crores for FY2025, reflecting an impressive 82.29% growth compared to INR 876.5 crores in FY2024. The EBITDA for the fiscal year stood at INR 310.90 crores, a 50.06% increase from the previous year, while the Profit After Tax (PAT) was recorded at INR 228.92 crores, increasing by 57.64% year-on-year.

Management indicated confidence in sustaining this growth, attributed to supportive government policies and advancing technologies. The total installed power generation capacity of India reached 483.26 GW, with renewable capacity rising to 220.10 GW, of which solar contributed 105.65 GW. The company noted a significant boost in the solar sector, with an addition of 23.83 GW in FY2025, signaling a healthy expansion outlook.

The unexecuted order book stands at 3.2 GWp, with plans to execute 1,524 MWp of EPC orders in the coming year, approximately 500 MWp of which was executed in Q4 alone. Management emphasized maintaining profitability through operational efficiency, expecting EBITDA margins in the range of 14% to 15% moving forward.

Looking ahead, management acknowledged the ambitious target set by the Government of India to achieve 500 GW of renewable energy capacity by 2030, which requires annual additions of 40 to 50 GW. They are closely tracking a 30 GW bidding pipeline and expressed confidence in the ability to secure further contracts, underscoring a commitment to building capabilities and expanding into emerging sectors such as data centers and hybrid projects. Additionally, plans to enhance offerings incorporating battery energy storage systems (BESS) were highlighted as a key strategic focus.

Questions and Answers from the Earnings Call Transcript

1. Question by Yashodhan Nerurkar: "Could you just explain the whole working capital cycle and the cash management around it?" Answer: "We typically collect about 5% to 15% as advance, 65% to 70% within 45-60 days post-material dispatch, and 25% to 35% after most project work is complete. Retention money of about 5% comes within 3-5 months post-execution. This structure ensures effective cash flow management as payments align closely with project milestones."

2. Question by Raman KV: "Can you give a timeline for the execution of the INR50 crores order book and whether this includes any solar plus energy storage?" Answer: "We have an order book of 3.2 GW, expected to execute within the next 12-15 months. This does include a 40 MW hour BESS project, highlighting our sector's growth. However, most of the orders are traditional EPC contracts."

3. Question by Rakesh Banerjee: "Can we assume that the 18-19% margin we clocked this time will be maintained?" Answer: "We do not provide specific margin guidance, but we anticipate they will be in the range of 14% to 15% going forward. We will maintain solid margins even amid healthy competition, which benefits the industry overall."

4. Question by Maitri Shah: "Could you elaborate on expanding into data centers?" Answer: "We are building capabilities in the data center space, focusing on high-demand power setups, especially for AI-driven needs. We are actively bidding for these projects and expect to gain orders as we develop our expertise in this sector."

5. Question by Naman Maheshwari: "What is the cost per MW for projects involving battery energy storage systems (BESS)?" Answer: "The cost for solar projects without BESS typically ranges from INR3 to INR3.5 crores. With BESS, it ranges from INR6 to INR8 crores per MW, though it greatly depends on the specific requirements of the customer."

6. Question by Ishita Lodha: "How much of the 2 GW Jindal Renewables order was executed in FY '25?" Answer: "We have partially executed this order during FY '25, and it is expected to be completed in FY '26."

7. Question by Karan Sanwal: "Are there any challenges with unsigned Power Purchase Agreements (PPAs) impacting your utility projects?" Answer: "Typically, the projects we monitor have secured financing and PPAs prior to our engagement. Hence, we do not directly face major concerns related to unsigned PPAs since they do not critically affect our order performance."