126% US tariffs won't hit Waaree earnings, says mgt; analysts stay bullish

Waaree Energies gains after management clarifies 126% US tariff does not apply.

Waaree Energies share price today: Analysts have retained their ratings and earnings estimates for solar module manufacturer, Waaree Energies, after the company's management reassured investors of no impact from the US' 126-per cent tariff order.

 

The order, which stated that duties are contingent upon the country of origin of the solar cells used in modules supplied to the US, is not applicable on Waaree Energies as the company does not use solar cells manufactured in India for its US supplies.

 

"Therefore, the preliminary 126 per cent CVD is unlikely to have a material impact on WEL's earnings," the company said.

 

On the BSE, Waaree Energies share price gained 1.9 per cent in the intraday trade (₹2,759.95) on Thursday, recouping marginally from its 10-5 per cent decline on Wednesday.

 

'No impact on earnings'

Addressing the panic among investors, Waaree Energies management hosted a conference call and clarified that since 2019, WEL has been sourcing cells from non-Chinese source and continues to explore options like the Middle East, and Africa.

 

For US sales, the company sources cells from countries where the tariffs are 10-15 per cent. Besides, modules are either manufactured and shipped from India or manufactured in WEL's US facility, it added.

 

"As WEL does not use India-made cells for sales in the US, the 126-per cent rate does not apply to the company," the management said.

 

Moreover, the management added that even with a 50-per cent tariff on India in the last 6-8 months, nothing changed for Waaree Energies with respect to commercial numbers.

 

In this backdrop, analysts at Emkay Global noted that 2-3 gigawatt (Gw) of Indian module production is exported by Waaree to the US, and said that including US local production, the company is well placed to meet US module demand and order book.

 

US is a long-term focus area for Waaree, and is growing fast given annual solar installations over CY25-26 increasing to 70-80 Gw versus 50 Gw in the 4 years (average) prior, driven by data centers, AI adoption, etc, the brokerage noted.

 

"The US is a tough geography, in terms of regulatory formalities, leading to minimal exports from India, except Waaree. That said, even Waaree is not able to meet demand adequately, and is striving to quickly ramp up US capacities," Emkay said.

 

'US remains an important market'

According to the management, US module manufacturing capacity currently stands at 2.6 Gw and is expected to reach 4.2 Gw over the next 1-2 quarters, which will be sufficient to cater to the current US order book.

 

That apart, the US has a total module manufacturing capacity of 50-55 Gw, though it lacks sufficient cell and wafer capacity. Accordingly, it continues to import cells from alternate markets.

 

"Further, even polysilicon sourcing is not allowed in the US from companies where Chinese holding is more than 30 per cent. Apart from China, the largest cell manufacturing capacity exists in India, so as of now, India seems to be the only possible solution for the US market," the management highlighted.

 

This dependence has also helped Waaree Energies sign US orders with module costs in the range of 35-38 cents/Wp as against an average module prices of 30-31 cents/Wp in the US market.

 

"WEL has been exporting 2-3 Gw of modules to the US every year on a consistent basis. The company continues to receive ongoing order inflows from US customers," WEL management said.

 

Overall, Waaree Energies' order book has risen to ₹60,000 crore by Q3FY26-end (net of despatches), from ₹40,000 crore at the start of FY26.

 

Waaree's revenue mix is diversified with 20-25 per cent from retail and 30-35 per cent from exports, which are premium segments (1-1.5 cent higher margins than the average).

 

"The company's Retail and US verticals took a decade or more to reach the current levels. Around 30-35 per cent of Waaree's revenue is price sensitive. 

 

Overseas revenue share is currently ~30 per cent, adjusted for quarterly variations, while the orderbook share is 50-60 per cent," Emkay Global noted.

 

Waaree Energies share price targets

As Waaree Energies has ramped up its US supplies, supported by diversified, FEOC-compliant sourcing while expanding its US capabilities, including 1 Gw in Arizona (acquired) and 1.6 Gw expansion in Texas, WEL's total US capacity stands at ~4.2 Gw by mid-CY26, sufficient to meet its current order book.

 

"With its diversified non-China sourcing (right from polysilicon), Waaree is well placed in the US, which is a key long-term focus market. We retain our estimates and reiterate 'Buy' with a target price of ₹4,260," Emkay said.

 

Motilal Oswal Financial Services, meanwhile, has a share price target of ₹3,514 on the stock.