US market uncertainty weighs heavy on Waaree Energies
Waaree’s growth streak hits a roadblock as US policy shifts threaten its profit margins. Can backward integration, PLI support, and diversification steer the company past this turbulence?
Waaree Energies' stock has taken a sharp hit in 2025, tumbling over 20%, as the US government's pause on clean energy incentives under the Inflation Reduction Act (IRA) clouds its future growth prospects.
The US contributes over half of Waaree’s order book worth ₹50,000 crore. Thus, the development can significantly impact the company’s earnings.
Kotak Institutional Equities recently slashed its FY25-27 estimates for Waaree by 1.9-12.5%, citing reduced IRA incentives, which will push the company to operate on a cost-plus model for select US clients.
Also read: Why Waaree Energies’ meteoric rise has hit a wall
Waaree also faces the risk due to oversupply of solar cells and modules in the domestic market, which could dent profit margin. Yet, backward integration, strong cash position, and continued growth in domestic capacity addition for solar power generation should bring comfort.
The solar cell and module manufacturing company has recorded solid growth of 80% CAGR in revenue and 144% in Ebitda over FY21-24. In 9MFY25, year-on-year revenue and Ebitda growth stood at 24% and 56%, respectively.
The growth has fuelled Waaree’s expansion with current module manufacturing capacity at 15GW, up from 2GW in 2021. Its first cell manufacturing facility began operations in January, with additional lines set for Q1FY26, taking total capacity to 5.4GW. The backward integration would help improve cost competitiveness and gain from government’s policies mandating domestic content requirement.
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Waaree has also recently commissioned a module manufacturing factory in the US to benefit from the subsidies offered by the US government. Its biggest investment is the 6GW integrated silicon ingot-wafer-cell-module manufacturing facility, backed by government’s production linked incentives (PLI), expected to be completed in FY27.
Beyond solar
Waaree is also expanding its renewable presence through entry into adjacent areas such as battery energy storage system, green hydrogen, electrolyser etc. These projects would use solar energy.
Also read: Waaree Renewable’s growth momentum may persist with the big order win
The company has received PLI for a 300 megawatts electrolyzer manufacturing facility and won a bid for 90,000 tons of green hydrogen production. It is also in the process of completing the acquisition of Enel Green Power India, announced in January.
To be sure, notwithstanding the losses in the share price in 2025, the stock is up 47% from its IPO issue price of ₹1,503 apiece. Hereon, the stock would take cues from the US policy decision on incentives.
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