The news that US authorities had slapped countervailing duties on solar imports from India, citing unfair government subsidies, left investors jittery. For Waaree Energies Ltd, given 30-35% revenue-share from exports and US manufacturing, fears around export viability and margin erosion took centre stage. The stock plunged 10.4% on Wednesday, recovering less than 1% on Thursday.
But nuances paint a different picture. Waaree believes that the duties apply to imports of cells, not assembly of modules. Waaree imports solar cells from regions that attract only 10% duty on module assembly in the US.
Moreover, with a pass-through clause in contracts, margins should remain protected, even as consistent US exports despite previous 50% tariffs lend confidence.
Also, Waaree has a manufacturing base of 2.6GW in the US, with plans of expansion to 4.2GW by June. This should help hedge part of the tariff risk, while also building up incentives under the US IRA (inflation reduction act) that offered ₹80 crore incentives to Waaree in Q3FY26 for US-based solar manufacturing.
Notably, over the years, it has scaled into India’s solar manufacturing bellwether, with 21.2GW of module capacity and 22% market-share. Its expansion roadmap pencils in 30.4GW module, 18.4GW cell, and 10GW wafer and ingot capacity by FY28.
Even as Waaree’s new green businesses pave the way for robust growth, it is strategically integrating backwards to protect margins. Its margins have lagged integrated peers, Premier Energies and Websol. But with the new 5.4GW cell-manufacturing facility, Nuvama Research expects Waaree to become DCR-compliant, resulting in over 40% higher realizations and better margins. DCR refers to domestic content requirement that mandates domestic procurement of cells.
Execution has kept pace, too. Revenue more than doubled in Q3FY26 to ₹7,565 crore, Ebitda margin grew to 25.6%, and order book to ₹60,000 crore, from ₹47,000 crore in Q2.
Still, heavy capex across the solar value-chain raises execution complexity. While Waaree has been diversifying sourcing beyond China, and has provisioned ₹300 crore for any anti-China action, any escalation in US trade action could dent execution, given that 65% of its order-book is focused overseas.
The domestic competitive landscape is also set to heat up with Reliance and Adani added to the mix, increasing overcapacity risk in India post-FY27.
Still, the market reaction, which has pushed the EV/Ebitda down to 10x FY27 estimates per Bloomberg, reflects policy anxiety more than business fragility.