Waaree Renewable Technologies Ltd Q2 FY27 Results

Waaree Renewable Technologies' consolidated (primary) results for Q2 FY27 show profitability declining even as the topline grew: revenue rose 36.5% YoY to ₹1,057.84 Cr, but consolidated PBT fell 32.7% YoY to ₹105.36 Cr and net profit for the period fell 30.0% YoY to ₹81.48 Cr (owners' share ₹73.89 Cr after ₹7.59 Cr minority interest); EPS came in at ₹7.07 against ₹11.16 a year ago. Both PBT and PAT also fell sequentially (-35.5% and -31.5% QoQ) off a strong Q1. Against the pre-result Street preview, revenue landed just above the ₹950–1,050 Cr expected range, but EBITDA margin (~15.1%) came in well below the 18–20% range flagged, and PAT missed the ₹110–130 Cr band by a wide margin — a clear miss on profitability despite a topline beat.

The revenue growth itself is not organic: the core EPC-Solar Power Plants segment — the business that has driven Waaree RTL's scale-up — saw revenue fall 42.1% YoY and 44.6% QoQ to ₹444.98 Cr. Every rupee of the quarter's growth came from the EPC-Transmission & Distribution segment (₹606.13 Cr this quarter vs nil a year ago), consolidated following the 18-June-2026 acquisition of a 55% stake in Associated Power Structures (APSPL) for ₹1,225 Cr. That segment carries a thinner ~4.8% result margin versus ~22.9% for legacy Solar-EPC, and the blended mix shift — combined with finance costs that jumped more than 10x YoY to ₹36.83 Cr (from ₹3.62 Cr) on acquisition-related borrowings, and depreciation that rose to ₹26.97 Cr (from ₹2.18 Cr) as ₹464.02 Cr of goodwill and new PP&E were added — is what compressed EBITDA margin to ~15.1% (from 20.4% YoY, 18.8% QoQ) and net margin to 7.6% (from 14.9% YoY). Standalone (parent-only) figures confirm the underlying weakness: standalone revenue fell 41.7% YoY to ₹451.64 Cr and standalone PAT fell 43.5% YoY to ₹68.13 Cr.

The stock went into the print at ₹826.2, up 1.9% over the past month of trading.

Against management's own framing, the ~15.1% EBITDA margin is essentially in line with the ~15% FY27 margin target flagged on the prior concall (down from 19%+ historically) — so this quarter effectively confirms, rather than contradicts, that guided step-down, even as it undercuts the bulls' hope (per the pre-result Street read) that Q1's 20%+ margin was the new normal. No management press release accompanied this filing, so there is no fresh quarter-specific commentary to weigh against the numbers. Alongside the results, the Board approved capex for a 35 MWp/25 MWac IPP solar plant at Wardha, Maharashtra, and the quarter saw incremental EPC order additions (a ₹22 Cr scope enhancement on 15 October, a 5 MWp solar EPC win on 8 October, and a ₹14.79 Cr revised-scope order on 28 September) — none large enough to offset the core segment's revenue decline. Consolidated borrowings rose to ₹1,412.99 Cr from ₹81.67 Cr at FY26-end, funding the APSPL and newly incorporated data-centre subsidiaries (Sunstar and Aurovault, consolidated from September 2026), setting up finance-cost drag as a recurring theme to track into H2.

Waaree delivers 36.5% revenue growth anchored in a large order book (₹5,500 Cr), but PAT collapsed 30% YoY as margins compressed and ASPSL financing costs exploded to ₹36.83 Cr. Execution risk is acute: 456 MW executed in Q2 vs 922 MW prior quarter (50% drop), blamed on land/connectivity delays. Management maintains 15% EBITDA margin guidance but profitability deteriorating.

Moderate pressure from analysts on execution slowdown and margin compression. Ninad Sarpotdar (InCred), Disha (Sapphire), and Saksham Tyagi (Desvelado) directly questioned land delays, PAT collapse, and T&D margin drag. Management acknowledged delays, cited external factors, maintained 15% margin target without conceding risk. Evasive on quantified near-term execution targets.

Score 6/10. Evasive on quantified execution targets and near-term headwinds. Repeatedly deferred margin improvement to 'next quarter' or synergies without specifics. Transparent on order book and segments but hedged on timeline and risk. Track record deteriorating. Promised FY26 execution capacity (~₹3,300 Cr / ~1,500 MW); Q2 delivered 456 MW, a 50% miss. Blamed external factors (land delays) but execution risk evident.

The centrepiece: Can Waaree repeat Q1 FY27's 20.4% EBITDA margin, or does it revert to management's 14–16% guidance? That gap — between delivered reality (20%+) and promised guidance (14–16%) — defines both the bull case and the Street's hesitation. With ₹5,300+ crore in unexecuted solar EPC orders and 800+ MWac of fresh inflows since late July, execution visibility is solid. But margin compression from lower-priced orders, T&D business dilution, and anticipated data centre capex weigh on near-term profitability. Q2 results will tell us whether Q1 was a one-off or a new baseline.

What a strong Q2 looks like: Revenue in line with Q1 or modest growth; EBITDA margin intact at 18%+ (signalling Q1 was repeatable, not an outlier); PAT growth sustained above 80% YoY; no guidance cut; order inflows continue at recent pace (₹200+ Cr/month run-rate). What a weak Q2 looks like: Revenue disappoints vs Q1 run-rate; margins compress to 14–16% guidance band (raising questions on order mix and pricing power); execution slips or order inflows slow (risk to full-year 3,200 MW target); management cuts medium-term margin guidance due to T&D drag and capex-heavy data centre ramp.

Waaree is executing on its 3.48 GWp backlog with H1 FY27 delivery of 1,621 MW — outpacing full FY2025's 1,300 MW in just six months. Large awards in August–September (800 MWac, 291 MWp BESS, 124 MWp) show no slowdown in inflows. Revenue growth at 53% YoY in Q1 is tracking well ahead of implied FY-guidance. However, management's persistent 14–16% EBITDA guidance — now two quarters old and contradicted by actual deliveries — raises questions about either conservative communication or shifting mix (new T&D contracts, data centre capex, or pricing pressure). Full-year guidance was not updated post-Q1; Q2 results will clarify whether management is ready to raise the bar or reset expectations downward.

Headline: Q2 saw no material governance risk or insider activity. Bulk deal in April (₹1,160+ per share) was routing block trades through NK Securities — no insider concern flagged. The major story post-Q1 is order inflow momentum (800+ MWac in two months) and the strategic pivot to data centres. New subsidiaries are a long-term play but drain near-term capex and distract from core solar EPC. No management guidance update since Q1, despite 20.4% margin beat — this silence is the Street's reading as either overconfidence or impending caution.