Waaree Energies IPO

Waaree Energies has substantially increased its total installed capacity from 4 GW in FY22 to 12 GW as of June 30, 2024.

The company claims to produce modules using advanced cell technologies, including multicrystalline, monocrystalline, and Tunnel Oxide Passivated Contact (TopCon).

The company's Tumb and Surat manufacturing facilities hold ISO 9001:2015 certificates for quality management systems for manufacturing, marketing, and supply of solar photovoltaic modules. The Tumb facility holds the ISO 45001:2018 certification for occupational health and safety management systems and the ISO 14001:2015 certification for environmental management systems for the same processes and installation. Similarly, the Chikhli Facility holds the ISO 45001:2018 certification for occupational health and safety management systems, the ISO 9001:2015 certification for quality management systems, and the ISO 14001:2015 certification for environmental management systems.

The Chikli facility has also received international recognition from UL Solutions, USA, which includes a CB scheme certificate for the mutual recognition of test certificates for electrical equipment, a certificate of compliance for UL standard safety for PV module safety, and compliance with BIS standard IS 14286: 2010 / IEC 61215:2005, IS/IEC 61730 (Part 1): 2004, and IS/IEC 61730 (Part 2) for its crystalline silicon terrestrial PV modules.

Some of Waaree Energies' laboratories are accredited by the National Accreditation Board for Testing and Calibration Laboratories (NABL) to conduct quality checks on the company’s solar PV modules.

The company has recorded a consistent rise in revenue from operations and profit after tax (PAT) over the last few years. Revenue from operations increased from Rs 2,854.26 crore in FY22 to Rs 6,750.87 crore in FY23 to Rs 11,397.61 crore in FY24, while PAT increased from Rs 79.65 crore in FY22 to Rs 500.28 crore in FY23 to Rs 1,274.38 crore in FY24.

The company’s revenue is dependent on a few key customers. The top 10 customers contributed Rs 6,471.93 crore (56.77%), Rs 4,448.62 crore (65.90%) and Rs 1,221.06 crore (42.78%) in FY24, FY23, and FY22, respectively, to the revenue from operations. Any loss of any of these customers or a slowdown in business from them could be detrimental to the company’s operations and financials.

The company's exports, particularly to the United States, constitute a large share of its revenue. Exports to the US contributed Rs 6,543.12 crore (57.14%), Rs 4,555 crore (67.47%), and Rs 646.64 crore (22.96%) in FY24, FY23, and FY22, respectively, to the revenue from operations. Any adverse developments in the economic and political environments of international markets, particularly the US, or a failure to sustain such large export volumes can adversely affect the company’s operations and financial performance.

The company’s revenue from operations also relies on retail sales from its franchises, which contributed Rs 1,157.08 crore (10.15%), Rs 672.49 crore (9.96%), and Rs 582.52 crore (20.41%) in FY24, FY23, and FY22, respectively. Any inability to maintain franchisee relations or expand the company’s retail network can negatively impact the company's business.

A portion of Waaree Energies' raw materials is sourced from China. Any restrictions or import duties on these materials, or on the company’s products in its export markets, can negatively impact its business prospects and financial stability.

Four of the company’s five manufacturing facilities are located in Gujarat. Any adverse changes in the business environment of the region could harm its operational capabilities.

A substantial portion of the company's retail sales come from Gujarat. The state contributed Rs 429.47 crore (37.12%), Rs 295.90 crore (44.00%), and Rs 193.05 crore (33.14%) to the total retail sales in FY24, FY23, and FY22, respectively. Any adverse developments in the region could hurt the company’s finances and operations.

The company, its subsidiaries, promoters, and directors are involved in certain legal proceedings. Any adverse judgments in any of these cases could be detrimental to the company’s business prospects.

As of August 31, 2024, Waaree Energies had significant outstanding borrowings amounting to Rs 1,270.19 crore on a consolidated basis. Any inability to service or repay these loans can negatively impact the company’s financial standing.