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Waaree Renewables Technologies Ltd : Stock Analysis December 2023

Waaree - balajiarcade.com

 

Disclaimer:

The analysis and opinions provided above are for educational and informational purposes only. They should not be construed as specific investment, accounting, legal or tax advice. Individual situations and current events may differ from case to case, so readers and viewers are advised to consider analysis that aligns with their portfolio risk, investment goals, and unique situation before making any investment or financial decision.


Company Overview

Listing Details

KeyValue
BSE534618
IndustryPower Generation
ISININE299N01013
FreeFloat25.00%
FnONo
LotSizeN/A
As OfIntrinsic ValueMarket Price
30 Sep 2023831.171,277.10
1 Dec 20231,448.90
KeyValue
Fundamental – QualityVery Bullish
Technical – Daily Price actionBullish
Near-term OutlookVery Bullish
EVA > 0Yes
KB > 50%Yes
10 DMA1,388.92
50 DMA1,347.08
Vol-Price trendRising

Based on the information, I would consider Waaree Renewables Technologies Ltd. The company has a strong track record of growth and profitability, and it is well-positioned to benefit from the growing demand for renewable energy in India. Additionally, the company has a low debt-to-equity ratio, a strong promoter holding, and a high ROE.

Here is a table summarising the key financial metrics of Waaree Renewables Technologies Ltd:

MetricValue
Current price₹1,449
Debt-to-equity ratio0.34
Promoter holding74.5%
Pledged percentage0%
OPM24.6%
PE45.3
Book value₹54.2
Dividend yield0.07%
CMP/50DMA1.15
CMP/200DMA1.17
ROE95.8%
ROA83.8%
Debt₹38.7 Cr.
Sales₹414 Cr.
Profit after tax₹66.6 Cr.
EPS₹32.1
Cash equivalents₹62.9 Cr.

Of course, no investment is without risk. The stock market is volatile, and there is always the possibility that Waaree Renewables Technologies Ltd could experience setbacks in the future. However, I believe that the company’s strong fundamentals outweigh the risks.

I would recommend doing your own research before making any investment decisions. However, I believe that Waaree Renewables Technologies Ltd is a worthy company to consider.

Vital company ratios for a layman:

RatioValue
Debt-to-equity ratio0.34
Promoter holding74.5%
Pledged percentage0%
OPM24.6%
PE45.3
Book value₹54.2
Dividend yield0.07%
CMP/50DMA1.15
CMP/200DMA1.17
ROE95.8%
ROA83.8%
  • Debt-to-equity ratio: This ratio measures a company’s financial leverage. A high debt-to-equity ratio means that a company is financing its operations with a lot of debt, which can be risky if the company is unable to repay its debts. A low debt-to-equity ratio means that a company is financing its operations with more equity, which is less risky.
  • Promoter holding: This ratio measures the percentage of a company’s shares that are owned by the company’s promoters. A high promoter holding means that the promoters have a strong vested interest in the company’s success, which can be a good thing. A low promoter holding means that the promoters have less control over the company, which can be a bad thing.
  • Pledged percentage: This ratio measures the percentage of a company’s shares that are pledged as collateral for loans. A high pledged percentage means that the company’s lenders have a lot of control over the company’s shares, which can be a bad thing. A low pledged percentage means that the company’s lenders have less control over the company’s shares, which can be a good thing.
  • OPM: This ratio measures a company’s profitability. A high OPM means that a company is keeping a lot of the revenue it generates, which is a good thing. A low OPM means that a company is not keeping much of the revenue it generates, which is a bad thing.
  • PE: This ratio measures a company’s valuation. A high PE means that investors are willing to pay a lot of money for each rupee of a company’s earnings, which can be a good thing or a bad thing. A low PE means that investors are not willing to pay much money for each rupee of a company’s earnings, which can be a good thing or a bad thing.
  • Book value: This ratio measures the value of a company’s assets minus its liabilities. A high book value means that a company’s assets are worth more than its liabilities, which is a good thing. A low book value means that a company’s assets are worth less than its liabilities, which is a bad thing.
  • Dividend yield: This ratio measures the percentage of a company’s share price that is paid out to shareholders as dividends. A high dividend yield means that a company is paying out a lot of its earnings to shareholders, which can be a good thing. A low dividend yield means that a company is not paying out much of its earnings to shareholders, which can be a bad thing.
  • CMP/50DMA: This ratio compares a company’s current share price to its 50-day moving average. A high CMP/50DMA means that a company’s share price is currently trading above its 50-day moving average, which can be a sign that the stock is overbought. A low CMP/50DMA means that a company’s share price is currently trading below its 50-day moving average, which can be a sign that the stock is oversold.
  • CMP/200DMA: This ratio compares a company’s current share price to its 200-day moving average. A high CMP/200DMA means that a company’s share price is currently trading above its 200-day moving average, which can be a sign that the stock is in a long-term uptrend. A low CMP/200DMA means that a company’s share price is currently trading below its 200-day moving average, which can be a sign that the stock is in a long-term downtrend.
  • ROE: This ratio measures a company’s profitability relative to its equity. A high ROE means that a company is generating a lot of profit for each rupee of equity, which is a good thing. A low ROE means that a company is not generating much profit for each rupee of equity, which is a bad thing.

Here is a comparison of Waaree Renewables Technologies Ltd to its competitors:

MetricWaaree Renewables Technologies LtdLarsen & ToubroGMR Airports InfRitesHFCLEngineers IndiaReliance Infra.Techno Elec.EnggMedian
Current price (₹)1,4493,190.6560.90467.8566.75151.55194.05705.65321.9
P/E45.335.9636746.6123.3931.2318.00-190.3555.0226.76
Market Cap (₹ Cr.)3,016438,22536,74711,2589,5398,5067,6877,60919,998
EPS (₹)32.1457.48-190.35110.1770.17127.46-182.0873.785.76
Sales Qtr (₹ Cr.)15051,0242,0635821,1117897,136462348
OPM (%)24.614.604.4929.7115.1723.698.958.1811.16
Debt/Eq0.341.5600.000.250.011.130.000.34

Overall, I believe that Waaree Renewables Technologies Ltd can be a good investment. The company has a strong competitive advantage, and it is well-positioned to benefit from the growing demand for renewable energy in India.

How Is the Industry of This Company Growing?

The renewable energy industry in India is growing at a rapid pace. According to a report by the International Energy Agency (IEA), India is expected to add more renewable energy capacity than any other country in the world between now and 2030. This growth is being driven by a number of factors, including:

  • Government support: The Indian government has set ambitious targets for renewable energy deployment, and it is providing a number of incentives to encourage investment in this sector.
  • Falling costs: The cost of renewable energy technologies has been falling in recent years, making them more competitive with fossil fuels.
  • Rising demand for energy: India’s energy demand is growing rapidly, and renewable energy is seen as a way to meet this demand without increasing greenhouse gas emissions.

As a result of these factors, the renewable energy industry in India is expected to grow at a compound annual growth rate (CAGR) of 14.2% between 2023 and 2030. This will make India the world’s third-largest renewable energy market by 2030.

Here are some of the key trends that are driving the growth of the renewable energy industry in India:

  • Solar: Solar energy is the most popular renewable energy source in India, and it is expected to account for the majority of new renewable energy capacity additions in the coming years.
  • Wind: Wind energy is another important renewable energy source in India, and it is expected to play a growing role in the country’s energy mix.
  • Hydropower: Hydropower is the largest source of renewable energy in India, and it is expected to continue to play a significant role in the country’s energy mix.

The growth of the renewable energy industry in India is having a number of positive benefits, including:

  • Reducing greenhouse gas emissions: Renewable energy is a clean energy source, and it can help to reduce India’s carbon footprint.
  • Improving air quality: Renewable energy helps to improve air quality by reducing emissions of pollutants such as sulfur dioxide and nitrogen oxides.
  • Creating jobs: The renewable energy industry is creating jobs in India, and this is helping to boost the economy.

How This Company Is Going to Perform Long Term, why and how?

Waaree Renewables Technologies Ltd is a well-positioned company with strong fundamentals and a bright future. The company is expected to benefit from the following long-term growth drivers:

  • Growing demand for renewable energy: India is committed to expanding its renewable energy capacity to meet its ambitious climate goals. This will create a significant opportunity for Waaree, as the company is one of the leading providers of solar energy solutions in India.
  • Falling costs of renewable energy: The cost of solar energy technologies has been declining rapidly in recent years, making them increasingly affordable. This trend is expected to continue, further boosting the demand for Waaree’s products and services.
  • Expanding into new markets: Waaree is expanding its presence beyond India, exploring opportunities in other emerging markets such as Southeast Asia and Africa. This diversification will help the company mitigate risks and tap into new growth opportunities.
  • Strong focus on innovation: Waaree is committed to innovation, investing heavily in research and development to bring new and more efficient solar energy solutions to the market. This focus on innovation will help the company maintain its competitive edge in the long run.

Here are some additional factors that support Waaree’s long-term growth prospects:

  • Strong financial position: Waaree has a strong financial position with low debt levels and healthy cash flows. This will give the company the flexibility to invest in growth opportunities and weather any economic downturns.
  • Experienced management team: Waaree has an experienced management team with a proven track record of success. The team is committed to executing the company’s long-term growth strategy.
  • Strong brand reputation: Waaree has a strong brand reputation for quality and reliability. This will help the company attract new customers and command premium pricing for its products.

How This Company Is Going to Perform Short Term? Why and how?

Based on the available information and analysis, Waaree Renewables Technologies Ltd is expected to perform well in the short term. The company’s strong fundamentals, including its healthy financial position, experienced management team, and strong brand reputation, will continue to support its growth. Additionally, the following factors are expected to contribute to the company’s short-term performance:

  • Continued growth in the renewable energy sector: The global renewable energy sector is expected to continue to grow at a strong pace in the coming years, driven by government policies, falling technology costs, and increasing demand for clean energy. This will provide Waaree with a favourable operating environment.
  • Execution of growth strategy: Waaree has a well-defined growth strategy that focuses on expanding its manufacturing capacity, diversifying its product offerings, and expanding into new markets. The successful execution of this strategy will be key to the company’s short-term performance.
  • New product launches: Waaree is continuously developing and launching new products to meet the evolving needs of its customers. These new products are expected to boost the company’s revenue and profitability.

Of course, there are also some risks that could impact Waaree’s short-term performance. These risks include:

  • Economic slowdown: A global economic slowdown could reduce demand for renewable energy products and services.
  • Regulatory changes: Changes in government regulations could increase the cost of doing business for renewable energy companies.
  • Increased competition: The renewable energy sector is becoming increasingly competitive, and Waaree could face increased competition from new entrants and existing players.

Despite these risks, I believe that Waaree Renewables Technologies Ltd is well-positioned to perform well in the short term. The company’s strong fundamentals, growth strategy, and new product launches are expected to outweigh the risks.

Here are some specific financial metrics that suggest Waaree is well-positioned for short-term growth:

  • Revenue growth: Waaree’s revenue has grown at a CAGR of 25% over the past three years.
  • Profitability: Waaree’s profit margins have been expanding in recent years.
  • Debt levels: Waaree’s debt levels are low, giving the company the flexibility to invest in growth opportunities.

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