Waaree Energies gets its first ‘buy’ recommendation; Nuvama terms it a ‘braveheart’ pick

Brokerage firm Nuvama has initiated coverage on solar equipment manufacturer Waaree Energies Ltd., calling it a “braveheart” pick.

Nuvama initiated coverage on Waaree Energies with a “buy” recommendation and a price target of ₹2,805, which implies a potential upside of 25% from current levels. However, the target is well below Waaree’s recent post-listing high of ₹3,743, from where the stock is down nearly 40%.

The brokerage has called Waaree a multi-decadal renewable, green hydrogen opportunity and not just a solar play. It expects the company’s revenue and Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) to grow at a compounded Annual Growth Rate (CAGR) of 30% and 54% respectively over financial year 2024 and 2027.

This growth will be driven by a 25% growth in module capacity, cells capacity going up by 8x, and a 6 GW surge in new wafer capacity, Nuvama said, adding that although margins may moderate in the medium-term, they can surge to 23% by financial year 2027 and then peak at 24% by financial year 2028, as competition rises for modules and import tariffs fall.

Waaree’s closest competitor, Premier Energies, had reported an EBITDA margin of 30% during the December quarter of the current financial year.

At the highs, Waaree traded at a multiple of 24 times financial year 2025 enterprise value-to-EBITDA, which factored in strong growth with a subsequent earnings catchup. “Based on our projections of a 54% EBITDA CAGR, strong cash flow, a robust balance sheet, and an RoE (Return On Equity) of over 30%, we expect EV/EBITDA to correct to a more reasonable 11x financial year 2027 estimates,” Nuvama wrote in its note.

Shares of Waaree Energies are currently trading 0.3% higher at ₹2,261. The stock is down 21% so far in 2025. This is the first “buy” recommendation that the stock has received as recommendations among the other four analysts is divided between “hold” and “sell” each.