Emkay Projects 48% Upside for Waaree Energies: A Renewable Energy Investment Analysis

Emkay Global initiated coverage on Waaree Energies with a ‘Buy’ rating and a March 2027 target price of Rs 4,260, implying about 48 per cent upside. The brokerage valued the company’s core photovoltaic manufacturing business at 14 times March 2028 enterprise value-to-Ebitda.

Emkay Global said India’s solar-manufacturing ecosystem had been supported by regulatory measures such as the Approved List of Models and Manufacturers, basic customs duty and domestic-content requirements. Although module capacity currently exceeds demand, the integration of cell and wafer-ingot production, along with forthcoming Approved List of Models and Manufacturers frameworks for these upstream components, is expected to benefit early movers such as Waaree Energies.

Emkay said its target price of Rs 4,260 on Waaree Energies is based on a sum-of-the-parts valuation, comprising 14 times March 2028 enterprise value-to-Ebitda for the core business and one times enterprise value-to-invested-capital for the battery-storage segment. Key risks cited by Emkay Global included heightened competition, technology shifts, regulatory changes and commodity-price volatility.

The brokerage noted that sector profitability would gradually migrate from module manufacturing to cells and further to wafer-ingot production. Even so, book margins and returns were expected to remain broadly stable. For financial years 2025 to 2028, revenue, Ebitda and adjusted profit after tax were projected to grow at compound annual rates of 36 per cent, 48 per cent and 40 per cent respectively. These forecasts reflect significant integrated expansion in financial years 2026 and 2027, which is expected to drive 33 per cent compound annual growth in module volumes while maintaining an Ebitda margin of roughly 23–24 per cent.

Waaree Energies is also diversifying into battery-energy-storage systems, transformers, inverters and electrolyser manufacturing, in addition to its existing engineering, procurement and construction and operations-and-maintenance businesses. This broader portfolio is expected to increase the company’s share of customer spending. Emkay Global incorporated capital expenditure for 3.5 gigawatt-hours of battery-storage capacity, valuing the business at one times enterprise value-to-invested capital, although it did not build in financial year 2028 earnings for the segment.

India’s installed solar capacity is expected to grow by roughly 30 gigawatts alternating-current annually in financial years 2026 to 2028, consistent with the government’s target of about 300 gigawatts alternating-current by calendar year 2030. This implies demand for more than 45 gigawatts direct-current of modules and cells each year, based on a loading factor of 1.4 times.

Domestic module capacity exceeded 70 gigawatts in financial year 2025 and is projected to rise to around 200 gigawatts by financial year 2028. However, the forthcoming second Approved List of Models and Manufacturers covering solar cells, together with domestic-content requirements, makes integrated cell manufacturing critical. Industry checks cited by Emkay Global indicated that domestic cell capacity could reach 40 gigawatts, 60 gigawatts and 80 gigawatts by the end of financial years 2026, 2027 and 2028 respectively.

Waaree Energies’ core order book, estimated at about Rs 44,000 crore at the end of the second quarter of financial year 2026, was assessed to provide revenue visibility until the middle of financial year 2028, even after incorporating planned growth. Beyond that period, a proposed third Approved List of Models and Manufacturers covering wafer-ingot production could create further protection for integrated producers, with domestic wafer-ingot capacity potentially reaching around 60 gigawatts by financial year 2030.

Waaree Energies is expanding module capacity from 18.7 gigawatts per annum at the end of the second quarter to 26.7 gigawatts by the end of financial year 2026. Cell capacity is planned to rise from 5.4 gigawatts to 15.4 gigawatts by the end of financial year 2027. The company is also setting up 10 gigawatts of wafer-ingot capacity by the end of financial year 2027. Total capital expenditure on these projects is estimated at Rs 11,800 crore, including 6 gigawatts of integrated capacity under the government’s production-linked-incentive programme.

Module-cell integration is expected to add roughly three percentage points to margins, while wafer-ingot integration could contribute a further one to two percentage points, excluding any uplift from higher capacity utilisation. The second Approved List of Models and Manufacturers for cells, effective June 2026, is also expected to increase the share of domestic-content-requirement orders, where margins exceed blended levels by about five to six percentage points.

The company guided for a sustainable Ebitda margin of 22–24 per cent. Emkay Global viewed this as achievable, even after allowing for rising domestic supply and short-term uncertainty in the United States market.