Waaree Energies target price set at ₹4,000 in FY26

Motilal Oswal initiates coverage with a Buy

Motilal Oswal Financial Services (MOFSL) has initiated coverage on Waaree Energies Ltd (WEL), positioning the company as a bellwether play on India’s solar manufacturing scale-up. The brokerage assigned a Buy rating and set a target price (TP) of ₹4,000 per share. The report also states the TP is derived via a sum-of-the-parts (SoTP) valuation.

The coverage comes at a time when policy-led domestic manufacturing is becoming more central to India’s renewable energy buildout. WEL’s scale in cell and module manufacturing, and its expansion plans across the value chain, are central to the brokerage’s investment thesis.

A note on the two target prices cited in the source

Within the provided text, SoTP valuation is referenced with two target prices: ₹3,725 per share (in one line) and ₹4,000 per share (repeatedly across the main report excerpts). The broader coverage note and valuation section consistently describe a TP of ₹4,000 per share.

India’s solar scale-up is the core demand driver

MOFSL links its positive view on WEL to India’s expected solar capacity expansion. The report states India’s installed solar capacity is set to rise from 100 GW in 1QFY26 to 160 GW by FY28. It also highlights a sharp pickup in utility-scale bidding activity, rising from 20 GW in FY23 to 69 GW in FY24.

In addition to utility-scale projects, the brokerage flags rising demand from PM Kusum and Suryaghar Yojana as contributors to domestic module demand through FY26-27.

Policy push for indigenisation strengthens the domestic backdrop

The union government’s intent to indigenise clean power supply chains is a key element in the report. MOFSL notes regulatory measures mandating domestically manufactured modules and cells.

It points to the Approved List of Module Manufacturers (ALMM) as an existing policy lever. It also notes that an Approved List of Cell Manufacturers (ALCM) is proposed from June 2026, and that an Approved List of Wafer Manufacturers (ALWM) has been conceptualised. The report adds that industry participants expect a similarly supportive framework to extend to ancillary equipment such as batteries, inverters, and transformers.

WEL’s scale and market share in India

MOFSL describes WEL as having “unmatched scale” in the domestic cell and module manufacturing ecosystem. The report states WEL has operational cell/module capacity of 5.4 GW/16.1 GW in India.

It also provides India capacity market share estimates of 21.6% for cells and 13.3% for modules, positioning WEL ahead of domestic competitors on current operating base.

Speed and integration across the solar value chain

The brokerage highlights WEL’s responsiveness to regulatory and macro changes. It cites WEL’s move to set up domestic cell capacity ahead of peers in response to ALCM-related developments.

On international capacity, the report cites WEL’s planned US module capacity expansion from 2.6 GW to 4.2 GW by 4QFY26, in response to a changing tariff landscape.

MOFSL also notes WEL’s presence across the solar value chain, including EPC, BESS, inverters, and green hydrogen, describing the company as increasingly integrated.

Capacity expansion and earnings visibility: key numbers

MOFSL links WEL’s growth expectations to its capacity buildout and order pipeline. The report states WEL plans to expand from 5.4 GW cell and 18.7 GW module capacity in 2QFY26 to 26.7 GW module, 15.4 GW cell, and 10 GW ingot-wafer capacity by FY26/FY27 end.

It also states WEL has a current order book of ₹47,000 crore. Management guidance cited in the report includes FY26 EBITDA of ₹5,500-6,000 crore, with 1HFY26 EBITDA at ₹2,400 crore.

The brokerage estimates a 43% EBITDA CAGR and 40% PAT CAGR over FY25-28. It also estimates that by FY28E, new businesses could contribute 15% of EBITDA.

Margin view and diversification beyond modules

MOFSL expects cell margins and pricing to remain resilient through FY27, supported by limited supply additions and longer stabilisation timelines for new industry capacity. It adds that profitability is likely to stay firm in 1HFY28, while flagging potential margin pressure beyond FY28 as incremental cell capacity aligns with demand.

To offset this, the brokerage points to emerging verticals including BESS, EPC, and green hydrogen as diversification levers. The report estimates these newer segments could contribute about 15% of EBITDA by FY28E.

Valuation framework: SoTP and segment multiples

MOFSL states that WEL’s valuation is derived using a sum-of-the-parts (SoTP) approach, producing a TP of ₹4,000 per share. It values:

• Domestic module business at 15x FY28E EBITDA (a premium to global peers, per the report)
• US module business at 12x FY28E EBITDA (in line with global peers)
• New business segments at 11x FY28E EBITDA, with over 74% of this segment contribution attributed to EPC and O&M

The report adds that the sum of segment valuations, adjusted for net debt, leads to the stated TP.

Stock levels, upside cited, and key risks

The report excerpts cite CMP of ₹3,370 and TP of ₹4,000, implying about 19% upside. The text also mentions the company’s market capitalisation at ₹43,453 crore, and that the share price has risen more than 26% in the last six months.

On risks, MOFSL lists upside triggers including slower-than-expected ramp-up of industry cell capacity in FY27-28 and the government formalising localisation directives for wafers and ingots. Downside risks include intensifying competition and potential pricing pressure, reliance on the US market (policy, tariff, geopolitical sensitivity), and execution risks from capital-intensive backward integration into cells and ingot-wafer.

What to watch next

The near-term narrative for WEL is anchored in three measurable signposts from the report: capacity expansion milestones in India and the US, the demand trajectory implied by India’s solar buildout, and policy timelines such as the proposed ALCM from June 2026.

MOFSL’s initiation note frames WEL as a leveraged play on domestic solar manufacturing indigenisation, while also highlighting that profitability and execution will be closely tied to how efficiently new capacities stabilise and how margins evolve as industry supply ramps.