Waaree's H1 is a reality check

The half-year (H1FY25) earnings of recently listed Waaree Energies Ltd, the largest solar module manufacturer in India, came as a rude shock to investors.

- Manish Joshi

The stock fell 13% since results were announced on 18 November.

Its maiden result post listing showed that in H1FY25, consolidated revenue grew a mere 2% year-on-year (y-o-y) to ₹6,983 crore, hurt by lower export volumes. In the earnings call, the management said export realization fell from 28-30 cents per watt-peak a year ago to 24 cents in H1FY25, while the same in the domestic market fell from 21 cents to 17 cents. Considering that price realization fell about 20% and sales still grew 2% y-o-y in this span, sales volume growth must have been about 22%.

In the case of Waaree, sales in value terms may not be a critical metric because the selling price of solar modules or finished goods fluctuates in tandem with the procurement price of solar cells, a key raw material. Therefore, sales volume and gross margin are better indicators of earnings performance.