Waaree Energies Reports Stellar Q2, But SEBI Analysts Caution On Cash Flow And Debt Build-Up

Shares of Waaree Energies fell over 1% on Friday even after the company reported a 130% year-on-year rise in net profit to ₹871 crore for the quarter ended Sept. 30, 2025. 

The company’s profit margin stood at 14.1%, supported by a sharp improvement in operating profitability and total income growth. 

Production during the quarter reached 2.64 GW, while the company’s order book stood at about 24 GW, valued at roughly ₹47,000 crore. The board also declared an interim dividend of ₹2 per share.

Strong Growth In Solar And Margin Expansion

According to Front Wave Research, Waaree Energies delivered a robust second quarter, with consolidated revenue rising nearly 70% year-on-year and earnings before interest, tax, depreciation and amortisation (EBITDA) margins expanding by 866 basis points. 

The growth was driven by solid execution in the solar photovoltaic (PV) modules segment and benefited from the U.S. Inflation Reduction Act (IRA).

The Solar PV Modules division led performance, posting over 75% revenue growth and more than doubling profit, with segment margins improving significantly. The firm noted that ₹162.22 crore in Advanced Manufacturing Production Credits contributed to the results. Waaree’s first-half EBITDA now accounts for nearly half of its annual guidance, indicating the company is comfortably on track to meet targets.

Cash Flow Pressures And Higher Leverage

Despite strong earnings, Front Wave Research pointed to a decline in operating cash flow, which fell to ₹574.73 crore in the first half of FY26 from ₹1,493.17 crore a year earlier. The drop was attributed to a 74.9% surge in inventory levels, locking up profit in working capital.

The report also highlighted that total borrowings more than doubled to ₹2,390.42 crore, reflecting higher leverage to fund expansion and working capital needs. The firm said that the ongoing U.S. Customs and Border Protection (CBP) investigation into the sourcing of certain components remains a potential risk factor.

Aggressive Capex And Expansion Strategy

Waaree Energies continued to scale its integrated energy business during the quarter. The company commissioned an additional 3 GW of solar module manufacturing capacity at Chikhli, Gujarat, and approved a fresh ₹8,175 crore capital expenditure plan for its next phase of expansion.

According to SEBI-registered analyst Equity Insights Elite, the new capex plan includes increasing storage cell and battery energy storage system (BESS) capacity from 3.5 GWh to 20 GWh, expanding electrolyser capacity from 0.3 GW to 1 GW, and raising inverter manufacturing capacity from 3 GW to 4 GW.

Strategic Acquisitions Strengthen Portfolio

Equity Insights Elite noted that Waaree also undertook a series of strategic acquisitions aimed at broadening its clean energy ecosystem. 

These included acquiring a 64% stake in Kotsons Private Ltd to expand its transformer business, purchasing the U.S. assets of Meyer Burger for $18.5 million, and acquiring a 76% stake in Racemosa Energy India to strengthen its smart metering portfolio.

Outlook

Front Wave Research concluded that Waaree’s performance remains fundamentally strong, supported by diversified expansion and steady order inflows. However, it said cash flow strain, higher leverage, and regulatory uncertainties will be key factors to watch in the coming quarters.

What Is The Retail Mood On Stocktwits?

On Stocktwits, retail sentiment was ‘bullish’ amid ‘extremely high’ message volume.

Waaree Energies stock has risen 25% so far in 2025.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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