From ₹268 to ₹1,494: This renewable stock has given 450% returns in a year

Given the growing need for a more sustainable source of energy and India’s ambitious targets of net-zero carbon emissions by 2070, renewable energy stocks are being seen as a good investment opportunity to potentially grow wealth. As India plans to transition to greener energy sources to meet rising energy demands, the renewable energy stocks are gaining significant traction in the market. One such stock is Waaree Renewable Technologies (WRTL), a solar power generation company, which has seen a strong rally in the last one year, driven by strong investor sentiment toward the renewable energy sector. Adding to it, the company’s healthy profitability margins as well as debt metrics and robust order book boosted demand for the stock.

On Wednesday, Waaree Renewable Technologies shares were locked in its 5% upper circuit limit at ₹1,494.45 on the BSE, with a market capitalisation of ₹15,579 crore. The sentiment got lifted after the company bagged an order worth ₹1,233.47 crore to set up a ground-mount solar PV project of 2,012.47 MWp DC capacity. Earlier this month, the company secured an order worth ₹146.77 crore to set up a 41.6 MW solar project in Tamil Nadu.

WRTL, a subsidiary of Waaree Energies, has delivered more than 450% returns to its shareholders in the last one year, with the stock price zooming from ₹268.10 on November 29, 2023, to ₹1,494.45 today. What is even more astonishing is that even at this level the stock is trading at 50% discount to its all-time high level of ₹3,037.75 touched on April 26 this year. In the calendar year 2024, the midcap stock has risen 240%, while it has corrected 28% in the past six months. In the last one month, the counter has added over 3%.

Early this month, India Ratings and Research (Ind-Ra) assigned ‘IND A-’ rating to WRTL’s bank loan, with a stable outlook.  The rating factored in the company’s strong growth in the consolidated revenue in FY24, largely from the engineering procurement and construction (EPC) segment, and the comfortable profitability margins as well as debt metrics. WRTL's strong order book of around 2.36GW at end-March 2024, amounting to ₹3,335 crore, provides comfortable near-term revenue visibility, the rating agency said in its report. 

The rating also factored in WRTL’s strong linkages with Waaree Energies Limited, which owns 74.46% stake in the company. Waaree Energies, which recently made its debut on the stock market, is a leading module manufacturing company in India with around 13.5GW of installed manufacturing capacity at end-October 2024.

For the September quarter of the current fiscal, WRTL’s consolidated net profit nearly tripled to ₹53.51 crore from ₹20.54 crore a year ago. Total income surged over 3-fold to ₹527.86 crore from ₹150.93 crore in Q2 FY24.

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