Motilal Oswal gives 'Buy' to Waaree Energies, calls it a sector bellwether

With operational cell/module capacity of 5.4 GW/16.1 GW in India, WEL, analysts believe, towers domestic competitors and enjoys a formidable India capacity market share of 21.6 per cent/13.3 per cent

Domestic brokerage firm Motilal Oswal Financial Services (MOFSL) has initiated coverage on solar cell and module manufacturer Waaree Energies (WEL), citing the company’s “unmatched scale” and its position as a bellwether in the Indian cell/module manufacturing sector.

 

The brokerage has set a target price of ₹4,000 per share, implying an upside of 18.69 per cent from WEL’s previous close of ₹3,370 on the NSE on Tuesday, November 4.

Scale and market leadership

Abhishek Nigam and Preksha Daga, research analysts at MOFSL, believes that with operational cell/module capacity of 5.4 GW/16.1 GW in India, WEL towers domestic competitors and enjoys a formidable India capacity market share of 21.6 per cent/13.3 per cent.

 

“WEL has responded swiftly to regulatory and macroeconomic changes, as evidenced by its move to set up domestic cell capacity ahead of competitors in response to the government’s Approved List of Cell Manufacturers (ALCM) and the planned expansion of its US capacity from 2.6 GW to 4.2 GW (by 4QFY26) in response to the changing tariff landscape,” analysts wrote in a research note.   Track Stock Market Live Updates

Integrated operations across the solar value chain

Highlighting WEL’s breadth, the analysts said, “WEL’s presence across the solar value chain—including EPC, BESS, inverters, and green hydrogen—makes it an integrated player and places it well to pursue growth relentlessly.”

 

On the domestic opportunity, they noted, “WEL encapsulates the India module story, with national installed solar capacity set to rise from 100 GW in 1QFY26 to 160 GW by FY28. A strong pickup in utility-scale bids (from 20 GW in FY23 to 69 GW in FY24) and accelerating demand from PM Kusum/Suryaghar Yojana will drive growth for the bread-and-butter domestic module business in FY26-27. The Union government has displayed strong intent to indigense India’s green power generation via regulations mandating domestically manufactured modules/cells.”

Valuations and target price

On valuations, the analysts said, “The valuation of WEL has been derived through a sum-of-the-parts (SoTP) methodology, resulting in a target price of ₹4,000/share. The domestic module business is valued at 15x FY28E Ebitda, representing a premium to global peers. The US module business is valued at 12x FY28E Ebitda, which is in line with global peers.  The new business segments, of which over 74 per cent of the contribution, analysts said, is attributed to the EPC and O&M businesses, is valued at 11x FY28E Ebitda, consistent with domestic peer valuations. The sum of these segment valuations (adjusting for net debt) captures the comprehensive value of WEL’s diversified operations.” 

Risks and cautions

The analysts also highlighted potential upside and downside risks for WEL. “Upside risks include a faster-than-expected ramp-up of industry cell capacity in FY27-28 and the government formalising the localisation directive for wafers and ingots, similar to the Approved List of Cell Manufacturers (ALCM),” they said.

 

On the downside, they noted, “WEL faces several risks, including intensifying competition from large domestic players, which may put pressure on pricing and margins. Its heavy reliance on the US market increases sensitivity to policy, tariff, and geopolitical shifts."  Furthermore, if backward integration initiatives—covering cells, ingot-wafer, and other upstream operations—fail to scale effectively, both profitability and competitivenes, analysts believe, could be undermined.  "The company’s aggressive expansion into capital-intensive cell and ingot/wafer manufacturing also heightens exposure to execution and stabilisation risks, potentially impacting timelines, costs, and near- to medium-term financial performance," they added.