WAAREEENER - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 18 Dec 25, 02:55 pm

Fundamental Rating: 4.6

📊 Core Financials: Waaree Energies demonstrates strong fundamentals with quarterly PAT rising sharply to 1,160 Cr from 660 Cr (+224% variation). Profit margins are robust, supported by ROCE at 34.0% and ROE at 26.3%, reflecting excellent capital efficiency. Debt-to-equity ratio of 0.19 indicates low leverage, ensuring financial stability. Cash flows remain strong, backed by consistent profitability and sectoral demand tailwinds.

💹 Valuation Indicators: Current P/E of 28.8 is slightly below industry average (31.1), suggesting fair valuation. P/B ratio ~7.4 (2877 ÷ 391) reflects premium pricing but justified by strong returns. PEG ratio of 0.15 highlights attractive valuation relative to growth. Intrinsic value appears higher than current market price, offering margin of safety.

🏢 Business Model & Competitive Advantage: Waaree Energies operates in renewable energy, with strong positioning in solar manufacturing and solutions. Competitive advantage lies in scale, technology leadership, and rising demand for clean energy. Overall health is strong, supported by high profitability, low debt, and sectoral growth momentum.

🎯 Entry Zone Recommendation: Attractive entry zone lies near 2,600–2,750 ₹ (below DMA 200 and closer to support levels). Current price (2,877 ₹) is slightly above fair accumulation zone; better to accumulate on dips.

📈 Long-Term Holding Guidance: Highly suitable for long-term compounding given strong ROCE/ROE, sectoral growth, and low debt. Investors should accumulate gradually during corrections to maximize margin of safety.

Positive

• 📈 Strong quarterly PAT growth (+224%)
• 💰 High ROCE (34.0%) and ROE (26.3%) indicate excellent capital efficiency
• 🛡️ Low debt-to-equity (0.19), ensuring financial safety
• 📊 FII holdings increased (+3.67%), showing strong foreign investor confidence

Limitation

• ⚠️ P/B ratio ~7.4 reflects premium pricing
• 📉 Weak technical indicators (RSI 33.8, MACD -110)
• 🔻 DII holdings decreased (-0.04%), showing reduced domestic confidence

Company Negative News

• 📉 Technical weakness with RSI near oversold zone
• ⚠️ Minor reduction in DII holdings

Company Positive News

• 📈 Quarterly PAT surged (660 Cr → 1,160 Cr)
• 💹 Strong foreign investor confidence (+3.67% FII holding)

Industry

• 🏭 Industry P/E at 31.1, slightly higher than Waaree’s valuation
• 📊 Renewable energy sector remains resilient with strong demand tailwinds and policy support

Conclusion

✅ Waaree Energies is fundamentally strong with excellent ROCE/ROE, low debt, and robust profit growth. Valuation is fair relative to industry, with PEG ratio highlighting growth potential. Best strategy: accumulate near 2,600–2,750 ₹ for margin of safety. Long-term holding is highly viable for compounding, supported by sectoral growth momentum.

Would you like me to extend this into a peer benchmarking overlay comparing Waaree Energies against other renewable energy leaders, or a basket scan highlighting undervalued peers for sector rotation?