Check out the detailed note:
Key takeaways from Q1 / FY2025 results:
(1) Commissioned 217 MW in Q1FY2025.
Y-o-Y growth in execution looks great optically however there was a shortfall in execution of 170-200 MW in Q4FY2024 (compared to the guidance)
So IMO the execution numbers are not as stellar as they look. However, it was the election quarter and hence this miss may be an aberration only.
Updated order-book bridge
(2) The unexecuted order book is around 2200 MW…hence visibility for the next 1-2 years
(3) The order wins were sluggish.
Less than 50MW !! again this may be due to the election quarter. They had sluggish wins in Q3 FY2024 followed by out-of-the-park order wins in Q4 FY2024.
The point I want to make is that order wins and executions are all lumpy.
What next from here?
(Not a recommendation)
(1) My entry /exit will be guided by Technical Analysis however I am mindful that it will take a small catalyst like an order win or a partnership etc to change sentiments. The long-term tailwinds are intact.
(2) The sector viability is increasing. Case in Point the decreasing BESS costs. BESS addresses the main challenge in renewables like solar energy, which is the intermittency problem.
(3) There are many players but very few at the size of orders WAAREE is working at.
(4) Has corrected ~50% from peak and is now available at 16550 cr Market capitalization. If over the next 1 year, they execute 1 GW translating to revenue of over 1250 cr (without modules) at 15% PAT margin they will make 187 cr i.e forward PE of 90x.
(This is a conservative estimate of execution)
(5) Hence, aggressive order wins need to be seen. A large order won today will take 1.5-2 years for execution justifying the valuation.
Market reaction post results
Market so far has reacted negatively to the results. It continues downward movement.
Technically EMA 200 is not yet breached. Could be a potential reversal candidate from these levels. As I alluded to earlier, given the tailwinds in the sector...positivity can come in unexpected ways...so don't ignore it.
It is not a momentum play even if it bounces from EMA 200. It has to pass the first filter of EMA 50>EMA 200.
Will update the post in case something interesting comes up in the concall.
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Or there only govt orders