Release Date: January 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 a significant revenue growth of 85.87% for the first 9 months of FY25, amounting to INR1,121.17 crores.
- The company's EBITDA for the 9 months FY25 stood at INR184.57 crores, reflecting a year-on-year growth of 39.95%.
- Waaree Renewable Technologies Ltd (BOM:534618) successfully executed EPC orders totaling 319 megawatt peak for the 9 months FY25.
- The company has a strong unexecuted order book of 3.4 gigawatt peak, indicating a robust pipeline for future growth.
- Waaree Renewable Technologies Ltd (BOM:534618) is exploring diversification into data centers, leveraging synergies with its existing solar EPC business.
Negative Points
- The company's margins have come under pressure, with a noted variability across quarters, although they have maintained a target of 15%.
- There is increased competition in the renewable energy sector, which could impact pricing power and profitability.
- Execution delays were noted in Q3 FY25, with lower invoicing compared to previous quarters.
- The company faces challenges in maintaining consistent execution timelines due to the dynamic nature of EPC projects.
- Waaree Renewable Technologies Ltd (BOM:534618) does not currently have a land bank for potential solar park opportunities, which could limit immediate expansion in this area.
Q & A Highlights
Q: What has been Waaree's per megawatt revenue for this quarter and the 9 months as a whole? Also, comments on the margin pressure year-over-year this quarter.
A: Normally, we operate under INR1 crore to INR1.1 crore per megawatt. Our margins have been guided to be around 15%, but they turned out to be 19.96% this quarter. For the 9 months ended, margins are at 16.50%, which aligns with our previous guidance.
Q: How does Waaree plan to complete the pending order book, and what are the timelines?
A: We have communicated a timeline of 9 to 15 months for completion. However, this is a moving goalpost as new orders keep coming in. We have completed 1 gigawatt in the first 9 months, and the biggest order of 2 gigawatts has just started.
Q: Has increased competition in the sector resulted in any loss of pricing power for Waaree?
A: While there is competitive intensity, we have not lost pricing power. Our order book and turnover have grown significantly. We do not undertake projects that are not profitable, maintaining our pricing strategy.
Q: What is Waaree's current cash position, and are there plans to raise debt for future projects?
A: Our cash position is comfortable at around INR200 to INR220 crores. We have an outstanding loan of INR28 crores and are not looking to raise funded debt, though we are exploring non-fund-based limits for bank guarantees.
Q: How does Waaree approach bidding for PSU orders compared to private orders, and is there a difference in margins?
A: Private orders are largely bilateral, while PSUs follow L1, L2 bidding. Both have similar margins, but PSUs have higher competitive intensity. We focus more on utility-scale IPP players for quicker order wins.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
