Stocks To Buy: Motilal Oswal 'bull case' projects 75% upside for this renewable energy stock

Shares of Waaree Energies Ltd. are in focus on Thursday, November 6, as brokerage firm Motilal Oswal Financial Services has initiated coverage on the solar cell and manufacturing sector with a 19% upside projection on the stock.

The brokerage initiated coverage with a "buy" rating on Waaree Energies with a price target of ₹4,000 per share. However, its bull case price target of ₹5,895, implies a potential upside of 75% from Tuesday's closing levels.

Waaree Energies has a  5.4 giga watt (GW) cell and 16.1 GW module capacity, along with a 2.6 GW plant in the US. It also towers over its domestic competitors and enjoys a formidable India capacity market share of 21.6% / 13.3%, Motilal Oswal's note said.

Waaree Energies has also responded swiftly to the regulatory and macroeconomic changes as evidenced by its move to set up domestic cell capacity ahead of competitors, in response to the Centre's approved list of cell manufacturers, Motilal Oswal said. The company's planned expansion of its US capacity from 2.8 GW to 4.2 GW by the fourth quarter of this fiscal year, in response to the changing tariff landscape, is also a positive for the brokerage.

Also, the company's presence across the solar value chain makes it an integrated player and places it well to pursue growth relentlessly, the brokerage said.

Waaree Energies has a current order book of ₹47,000 crore and its earnings visibility remains high. Its management has guided for its earnings before interest, tax, depreciation and amortisation (EBITDA) to be between ₹5,500 crore to ₹6,000 crore for this fiscal.

As the company expands, Motilal Oswal has estimated a compound annual growth rate (CAGR) of 43% for its EBITDA and 40% for its profit after tax (PAT) over FY25-28. Also, by FY28, the earnings contribution from the new business is estimated to rise to 15% of EBITDA, it added.

The brokerage sees the following upside and downside risks for the stock and industry:

Upside risk

• Slower-than-expected ramp-up of cell capacity in FY27-28.


• The government formalising the localisation directive for wafers and ingots,

Downside risks

• Intensifying competition from large domestic players may pressure pricing and margins.


• Heavy US market reliance heightens sensitivity to policy, tariff and geopolitical shifts.


• If backward integration initiates fail to scale effectively, profitability and competitiveness may be undermined.


• The company's aggressive foray into capital-intensive cell and ingot/wafer manufacturing increases exposure to execution and stabilisation risks, potentially impacting timelines, costs and near-to medium-term financial performance.

In its bull case scenario, Motilal Oswal is projecting a 5% higher average realization for both the domestic and US module business between financial year 2026-2028.

Waaree Energies' effective capacity utilization is also likely to be higher by 5% from the base case during the same period, Motilal Oswal said.

10 analysts have coverage on Waaree Industries, of which, seven of them have a "buy" rating, while three have a 'sell" rating.

Shares of Waaree Energies ended the previous session 1.8% lower at ₹3,370 apiece. The stock has gained 30.5% in the last six months. Th stock is up over 130% from its IPO price of ₹1,503 per share.