Waaree Energies Ltd (WAAREEENER) Q2 FY27 Results Analysis: EBITDA Margin Compresses 543 bps, PAT Falls 14.2%

Waaree Energies Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 7,517.74 Cr (+23.90% YoY) and PAT growth of -14.20% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Waaree delivered 23.9% YoY revenue growth to Rs.7,517.74 Cr, but Operating EBITDA fell 5.1% YoY to Rs.1,335.20 Cr with margin at 17.76% vs 23.19% a year ago, and PAT declined 14.2%. Q2 EBITDA came in below the run-rate implied by management's reaffirmed FY27 guidance of Rs.7,000–7,700 Cr, leaving H2 requiring a 58–84% quarterly step-up; results also include a one-time Rs.360.40 Cr IEEPA duty refund. Cash conversion was strong (CFO/PAT 2.11x) and the balance sheet remains net cash, but the guided margin levers — cell integration from Q3 and the 10 GW cell facility by December — are not yet evidenced in this filing.

Key Investment Insights

Key Positives

• Revenue grew 23.9% YoY to Rs.7,517.74 Cr, driven by Solar PV Modules (Rs.6,571.01 vs Rs.5,369.34) and first-time APSPL T&D consolidation (Rs.606.13 Cr)
• H1 operating cash flow of Rs.3,477.06 Cr was 2.11x PAT, up from Rs.574.73 Cr a year ago
• Effective tax rate improved to 26.81% from 28.69% YoY
• Group remains net cash at Rs.2,435.55 Cr with net worth rising to Rs.17,300.35 Cr from Rs.15,010.89 Cr
• Module segment margin held roughly flat QoQ at 13.87% vs 13.54% in Q1
• No incremental EAPA provision taken; Rs.294.78 Cr provision stands with administrative review filed

Risk Factors

• Operating EBITDA declined 5.1% YoY and 7.3% QoQ to Rs.1,335.20 Cr with margin at 17.76% vs 23.19% a year ago
• Q2 EBITDA of Rs.1,335.20 Cr is below the implied Rs.1,853–2,087 Cr/quarter run-rate needed to track the FY27 guidance of Rs.7,000–7,700 Cr; H2 requires a +58% to +84% quarterly step-up
• Raw-material intensity rose to 68.69% of revenue from 61.41% a year ago
• New T&D segment margin fell to 4.76% from 9.24% in Q1, diluting mix; EPC revenue fell ~41% YoY
• US CBP EAPA notice of evasion determination received; Rs.294.78 Cr provision stands with auditor emphasis-of-matter
• Finance costs rose 49.6% QoQ to Rs.105.26 Cr and D&A rose 44.8% YoY on the capex build