Release Date: April 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Waaree Renewable Technologies Ltd (BOM:534618, Financial) reported an impressive revenue growth of 82.29% for FY25, significantly surpassing the growth rate of the Indian solar sector.
- The company successfully executed 1,524 megawatts of EPC projects, with a strong unexecuted order book standing at 3.2 gigawatts.
- EBITDA for FY25 increased by 50.06% year-on-year, reflecting improved operational efficiency and cost management.
- The company is actively tracking a 30-gigawatt order pipeline, indicating strong future growth potential.
- Waaree Renewable Technologies Ltd (BOM:534618) is expanding its capabilities into data centers, aligning with the growing demand for energy-intensive infrastructure.
Negative Points
- The working capital cycle is complex, with significant retention money affecting cash flow, which may impact liquidity.
- There is a noted mismatch between sales growth and cash flow from operations, raising concerns about cash management.
- The company faces increasing competition in the renewable energy sector, which could pressure margins.
- Waaree Renewable Technologies Ltd (BOM:534618) does not provide specific future guidance, which may lead to uncertainty among investors.
- The company has not yet secured orders for data centers, indicating potential delays in diversifying its project portfolio.
Q & A Highlights
Q: Can you explain the working capital cycle for a typical 100 megawatt project and how cash is managed?
A: The cycle varies by project. Typically, we receive 5-15% as an advance, 65-70% within 45-60 days of supply, and the remaining 25-35% upon project completion. Retention money, about 5%, is received 3-4 months post-execution. Payments are milestone-based, ensuring healthy cash flows. (CFO, Mr. Manmohan Sharma)
Q: What is the current status and execution timeline for your order book?
A: Our current order book stands at 3.2 gigawatts, expected to be executed over the next 12-15 months. This includes a mix of EPC projects and a 40 megawatt BESS project. (Executive Director, Mr. Hidesh Mehta)
Q: How do you view the competitive landscape and margin pressures in the renewable energy sector?
A: Competition is healthy and necessary for industry growth. We maintain a margin range of 14-15% and are confident in sustaining this despite increased competition. (CFO, Mr. Manmohan Sharma)
Q: What is your strategy for expanding into data centers, and do you have any orders in this segment?
A: We are building capabilities to enter the data center market, which aligns with our expertise in handling large-scale projects. Currently, we are tracking potential projects but have not secured any orders yet. (Executive Director, Mr. Hidesh Mehta)
Q: How is the transmission network in India scaling to accommodate increased renewable energy capacity?
A: Significant investments are being made in transmission infrastructure to support renewable energy growth. Battery energy storage systems are also helping optimize existing transmission capacity, ensuring we meet the government's renewable energy targets. (CFO, Mr. Manmohan Sharma)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
