Q1 2027 Waaree Energies Ltd Earnings Call Transcript
Key Points
- Record order book of approximately INR61,500 crores, the highest in company history, with INR16,000 crores in new orders secured in Q1 FY27 alone.
- Revenue from operations grew 79.2% year-on-year to INR7,932 crores, driven by a 89% increase in module volumes sold to 3.6 gigawatts.
- Retail revenue more than doubled year-on-year, up 130% to INR2,289 crores, with expectations to reach INR9,000-10,000 crores for the full year.
- Backward integration into cell manufacturing is on track, with captive cell output nearly doubling in the quarter and plans to increase cell-to-module integration from ~20% to ~65% in the next two to three quarters.
- Strategic expansion across the value chain is progressing, including new module capacity in India, automated BESS container production, and entry into the T&D sector via the acquisition of a 55% stake in Associated Power Solutions.
- Customer base is broadening and derisking, with top 5 customer share declining from 33% in FY26 to 27.1% and top 10 from 47% to 37.1%.
- US manufacturing footprint is ramping up, with new lines expected to begin commercial production soon, which is expected to improve margins and IRA incentive realization.
- Company maintains a strong net cash balance sheet with a net debt-to-equity ratio of -0.08x and healthy return ratios (ROCE of 28.5% and ROE of 24.8%).
- Management reaffirmed its FY27 operating EBITDA guidance of INR7,000-7,700 crores, citing strong demand tailwinds and a clear strategic roadmap.
- Operating EBITDA margin compressed to 18.2% from 22.9% in the prior year, impacted by rising global raw material costs, particularly metal indices and price movements out of China.
- Export mix was softer during the quarter due to longer-than-expected shipment and clearance times, leading to lower dispatches and revenue from this segment.
- A portion of manufacturing capacity ran ahead of dispatch-ready orders, leading to inventory build-up in Q1, although this is expected to be absorbed by firm schedules in the second half.
- Profit after tax margin was thin at 1.2%, significantly lower than the operating EBITDA margin, indicating high depreciation, interest, or other costs impacting the bottom line.
- Domestic non-DCR market offtake was delayed by developers, leading to lower realizations on spot market supplies and contributing to margin pressure.
- US local manufacturing in Q1 relied heavily on OEM manufacturing, leading to lower IRA incentive realization compared to expectations for the new in-house capacity.
- Cell manufacturing costs in India are currently higher than imported cell prices ($0.07-0.08 per watt vs. $0.04-0.05 per watt), though this is offset by DCR market pricing.
- The company faces execution risks related to its massive INR31,500 crores CapEx program, with a significant portion of capital deployment scheduled for FY28 and FY29.
Ladies and gentlemen, good day, and welcome to Waaree Energies Limited Q1 FY27 earnings conference call hosted by MUFG Intime. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Irfan Raeen from MUFG Intime. Thank you, and over to you, sir.
Thank you, Nithya. Good morning, ladies and gentlemen. I welcome you all for Q1 FY27 earnings conference call of Waaree Energies Limited. To discuss this quarter's performance, we have from the management, Mr. Jignesh Rathod, Whole-Time Director and CEO; Mr. Abhishek Pareek, Chief Financial Officer; Mr. Varun Goenka, President, Growth and Strategy.
Before we proceed with this call, I would like to mention that some of the statements made in today's call may be forward-looking in nature and may involve risks and uncertainties. For more detailed disclaimer, kindly refer to the investor presentation and other filings that we have uploaded on company's website and stock exchanges.
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