Waaree Renewable Technologies Share Fundamental Analysis

Introduction to Waaree Renewable Technologies

Hello everyone, how are you all doing? Today, let's dive into one of your favorite companies in the renewable energy sector, Waaree Renewable Technologies. The share price has been experiencing a lower circuit, dropping from 3100 to approximately 1800. We'll explore whether this is a trap, what the company does, its fundamentals, and what the charts are saying.

Stay tuned till the end as I'll reveal a financial score that we've never discussed before, which attempts to detect any discrepancies in a company's financials.

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Waaree Renewable Technologies: Business Overview

Before diving into the share price movements, it’s essential to understand the business and fundamentals of Waaree Renewable Technologies. The company operates in the renewable energy sector, specifically in solar modules. With 32 years of experience, they are recognized as a Tier 1 solar module manufacturer.

Waaree has completed projects totaling over 1.5 gigawatts and has shown a 22% CAGR year-on-year growth. Globally, they have supplied 6 gigawatts of modules. The company's achievements are impressive and highlight its significant role in the renewable energy sector.

 

Detailed Video:

 

Financial Overview of Waaree Renewable Technologies

On an annual basis, Waaree's financial results show a year-on-year revenue growth of 149%, with a 147% increase in EBITDA and a 167% growth in PAT. Their unexecuted order book stands at 2365 MW, while they have successfully executed 704 MW. Revenue from O&M services amounts to ₹10.42 crore.

It's crucial to understand the real game behind order books. While it sounds good to hear about large orders, the critical factor is whether the company can execute these orders within the given deadlines. If not, orders may get canceled, affecting revenue generation.

 

Order Book Realities

Currently, the trend is to focus on the size of the order book. However, the actual game lies in the execution of these orders. If a company fails to deliver within the stipulated time, orders may be canceled, impacting the company's financials. This is an essential aspect to consider when evaluating a company's performance.

Looking at ongoing projects, Waaree has various projects across different cities with specific megawatt capacities. This detailed information helps in understanding the company's operational scale.

 

Revenue Breakdown

Breaking down the revenue, 54% comes from EPC contracts, 45% from O&M services, and the rest from electricity generation from solar plants. Major clients include prominent names like L&T and BPCL.

Post-COVID, Waaree has seen significant growth, with revenue reaching ₹125 crore. While the financials look impressive, it’s vital to keep an eye on the valuation.

 

Valuation Concerns

Waaree's current PE ratio stands at 132, compared to the industry PE of 41.8. The stock is trading at a significant premium to its book value. While the company shows excellent ROC and ROE, the high valuation is a concern.

Quarterly results show a slight decline in net profit as of March 2024. Interestingly, the stock started declining on May 10th, even though the poor results were announced on May 12th. This suggests that some market participants might have anticipated the results.

 

Market Manipulation Indicators

Stocks with frequent upper and lower circuits often indicate manipulation. For Waaree, the absence of interest from FIIs and DIIs, and the high involvement of promoters and public shareholders, raises concerns.

The declining volumes add to the suspicion of manipulation, as low volume stocks are easier to manipulate. While this doesn’t necessarily mean the stock is manipulated, it’s crucial to be cautious.

 

Technical Levels of Waaree Technologies

Technically, Waaree's stock has support levels at 1640 and 1720. These levels are essential to watch for potential rebounds. However, the frequent upper and lower circuits make it unpredictable.

 

Modified C-Score

For the first time, we're discussing the Modified C-Score, a parameter used to detect potential manipulation in a company's financials. Waaree has a score of five, indicating possible financial manipulation. This is a critical aspect to consider when evaluating the company.

 

Conclusion

In conclusion, Waaree Renewable Technologies is a company with impressive achievements and significant growth. However, the high valuation, potential market manipulation, and financial concerns cannot be ignored. While the company shows promise, it’s essential to be cautious and consider all factors before investing.

We hope this analysis provides valuable insights. Please share your thoughts in the comments and share this blog with others. Thank you for reading!

 

Disclaimer: This stock analysis is only for informational purposes and should not be considered as investment advice. Always do your research and consult with a financial advisor.