Why Waaree Energies Share Price falling? Check key Reasons

Why Waaree Energies Share Price falling? 

India is among the few export countries shipping solar modules to the USA while Waaree Energy is the number one for solar export from India, especially to the US market. Any freeze or slowdown on renewable energy projects in the US would very likely affect Waaree Energy's revenue and growth opportunities.  Retail investors' choice, Waaree Energy, made an impression with a 68% listing gain. Many investors, particularly those who purchased at the highs, are concerned about the Waaree Energies Share Price is currently trading at 30% below its peak.

Waaree Energies Ltd share price bse is Rs.2,666.55 on 30 November 2024.

Waaree Energies Ltd share price nse is Rs.2,692 on 30 November 2024

Let's examine the causes of this Waaree energy share price decline and what to do if you find yourself stuck at a higher level.

 

Detailed Video

1. "The Trump Effect"

Following the delivery of Donald Trump's victory speech, the stock started to decline. He expressed fears about the future of the renewable energy industry in his address by mentioning plans to halt renewable energy projects on his first day in office.

 

How does “The Trump Effect” impact Waaree Energy?  

Here are these data points to understand better:
 

• India forms a significant part of its renewable energy commerce through solar module exports to the USA. 

• Companies like Waaree will be those that suffer the most from such extreme slowdown in demand from the US.  

• This ambiguity over any future exports is hitting market sentiment and causing the stock to go downhill.

• The market is reactive to this uncertainty concerning future exports by the leading company.

You can Read Waaree Energies IPO here.

India Exports with USA

 

Waaree Energies Revenue from the USA

Over the last couple of years, and increasingly with the growing solar export business, Waaree Energies has been able to attain a sizable share of 44% in the Indian solar export market, especially in regions like the USA. In fiscal 2024, Waaree Energies' export sales amounted to Rs.6,569 crores; of this, Rs.6,543 crores came from its largest jurisdiction, the USA, representing 57.14% of the total revenue.

This says that Waaree Energies has a significant presence in the USA for revenue.

Now, if Trump's remark on stopping renewable energy projects from Day 1 is eventually translated into action, this would be an immediate direct hit on Waaree Energies revenue. And it is well known that the market tends to react first before an actual happening occurs.

 

2. Poor Q2 results 

Financial results for the company in Q2 were disappointing. The market expected a stellar performance by Waaree with demand booming for renewables, but the results fell flat. 

Consolidated Revenue: Consolidated revenue for Quarter 2 was Rs.3,574 crore, which was the same as Rs.3,537 crore for the same quarter last year.  

Performance Impact: Higher expenses and lower realizations led performance to be somewhat slower.  

EBITDA Growth: However, EBITDA grew by 12% to Rs.525 crore, with EBITDA margins at 14.7% as against 14% in the same quarter last year. By quarter-on-quarter, it decreased, though, as EBITDA in June this year was standing at Rs.552 crore.  

Export Share: Segment-wise, Waaree has an export share of 27% for the quarter-almost down from 60% during the same quarter in the previous year.  

 

Sub-optimal Revenue Growth

Reduced margins due to increased cost inputs. Investor-human emotions have therefore entered concern about the company's near-term dividends, applying increasing pressure on the stock.

 

Future Plans

• An expansion to the world market with the eyes on the EU and the Middle East is the next big thing for Waaree Energies. 

• The utility and enterprise module sales market will strengthen its established leadership in the country through Waaree. The company is developing an entirely integrated facility for a 6 GW manufacturing facility of ingots, wafers, cells, and PV modules, which is expected to become fully operational by FY27.

• This means that Waaree Energy will venture beyond the US market for business. The real question is how soon this moves into high gear and that, surely, is where the action for rising stock prices will be focused.

 

What Should You Do?

If you are stuck at higher levels, here's a strategy to consider:

1. Assess Your Investment Horizon:

You need to realize that for long-term investors, this will be a time when primary consideration will have to be given to Waaree Energy's growth potential in renewable energy within India and in a larger sense, worldwide. Any short-term damage such as that caused by the Trump Effect would just ultimately be placed aside.

Short-term investors have time to book some partial losses if the stock shows no recovery patterns in the months ahead. 

2. Observe Some Key Triggers:

• Change in US Policy: These are all the updates to watch regarding renewable energy policies in the US. Trump may bring back growth opportunities for Waaree Energy when he suddenly reverses course. 

• Future Earnings Reports: Strong performances in the several quarters ahead might tend to restore investor confidence. 

 

3. Diversify Your Portfolio:

Be well diversified in not too much concentration because this is the way to minimize risk in stock market uncertainty. 

Final Thoughts

Investor trust in Waaree Energy has been eroded by the decline in export earnings as well as Trump's remarks. The market therefore thinks that Waaree's US revenue may continue to be harmed in the future. The company may find it difficult to expand if revenues are impacted, which has caused a stock sell-off. Profit booking was also anticipated following a huge 68% bumper listing gain. The Waaree Share Price is under pressure from all of these factors.

Waaree Energies Limited has already made plans to lessen its reliance on the US market, which may eventually spur business expansion. Waaree's PE ratio is still greater than the industry average despite the recent drop. It appears that before the stock exhibits noticeable upward movement, the valuation may need to be adjusted further.

Disclaimer: No buy or sell recommendation. No trading or investment advice is given. The content is purely for educational and information purposes only. Always consult your eligible financial advisor for investment-related decisions.