Unlisted Shares

Revenue Growth:​

• Explosive Revenue Growth: In FY23, Revenue is up 137% year-over-year (y-o-y) (driven by a sales boost).
• Modules Drive Revenue, But Diversification Begins:
  • Module sales are still dominant (86% of revenue, growing 125% y-o-y).
  • But, services (O&M, consultation) and EPC services see booming growth: 355% and 124% year-over-year respectively.
• Global Leader in Solar Exports:
  • The company is the #1 non-China supplier of modules to the US (70% market share).
  • Exports contribute heavily to revenue (70% in FY23).
  • Apart from the US, the company also exports to Vietnam, UAE, Germany and other European countries. 

Profitability & Returns:

• Profits Sky-rocket: 500%+ y-o-y growth in net profit, marking FY23 as the first year where net profit margin exceeds 7% of revenue
• Perfect Storm for Success: Increased sales and lower raw material costs led to economies of scale and margin expansion.
• Strongest Margins in Years: Gross margin hits a seven-year high of 24%.
• Shareholder Value Booms: ROE and ROCE soar, reflecting both revenue and profit surge.
• Shifting Life Cycle: Increased profitability marks a generational shift in the company's business trajectory.
• Growth Across Metrics: ROE, ROCE witnessed a massive rise even though book value has inflated yoy aided by premiums from private issues. ROA rises, albeit slower than profitability due to an expanding asset base (cash influx and capacity addition).

Investment Thesis:

Expansion:

• 2 GW capacity in 2022 to 12 GW currently (Oct 2023), making them India's largest module manufacturer.
• 5.4 GW solar cell plant under construction in Chikhli, operational by FY24 end.
• ₹45,000 Crore order book (~17,500 MW).
• ₹2,000 Crore raised through private placements, ₹2,800 Crore via IPO by FY24 end, for wafer-to-module expansion (6 GW).
• Entry into electrolyzer business and established listed battery business.
• Secured 1 MW green hydrogen production tender.

Financials:

• EPS expected to grow >40% CAGR for next 2 years.
• Current P/E 60x, undervalued considering growth, estimated forward P/E 15x.
• Potential multi-bagger opportunity. 
• Waaree Energies IPO presents a lucrative exit opportunity.
• In contrast to Adani Green, a primary competitor with a trailing twelve months (TTM) return on equity (ROE) of 23% and a TTM price-to-earnings (P/E) ratio of 174, WEL is significantly undervalued, boasting a TTM P/E of 64. Furthermore, it anticipates a robust fiscal year in 2024 after delivering ROE of 43.6% in FY23.

India's Solar Power Play Q4FY24 Update:
China dominates the global solar module market, but India is rising fast. Falling Chinese costs threaten competitors, but India benefits from reduced imports and potential import restrictions on Chinese modules in the US. Indian manufacturers are scaling up and becoming cost-competitive, aided by government policies and US tax credits. Though near-term margins may be squeezed, rising demand and cost-effectiveness bode well for the future. Short-term investors should be cautious, but mid-to-long-term prospects are promising, with an IPO on the horizon in FY24.

Key Person: Hitesh Chimanlal Doshi has been affiliated with the company since 1999 and currently holds a pivotal role overseeing the financial performance, investments, and strategic initiatives. He provides strategic counsel to the Board, executes business strategies, and establishes policies. The company is the parent of the well-known solar EPC player Waaree Renewable Technologies Ltd (WRTL), which achieved an impressive 117% year-on-year growth in FY24, maintaining a remarkable five-year CAGR of 180%. Additionally, Hitesh Chimanlal Doshi is a promoter of the reputable battery manufacturing business, Waaree Technologies Ltd (WTL), which is listed on NSE.​