Waaree Energies Q2: PAT Soars 133% To ₹842 Crore: Is The Rally Built On Sustained Demand?

Waaree Energies, a manufacturer of solar PV modules, registered a glaring increase in consolidated net profit in the September quarter as PAT shot up to ₹842 crores as compared to ₹362 crores last year, a growth of 133%. The sharp increase in topline and margins registered by the company also indicated a strong operational momentum within the company's manufacturing and project businesses. Investors are confronted with the question: Does this signal the beginning of some structural outperformance, or is it a one-time spike in performance related to short-run demand?

What Drove The Sharp Profit Growth This Quarter?

• Strong Increase in Revenue: The consolidated income of the September quarter of Waaree Energies increased significantly compared to the same period in the previous year by around ₹6,000-6,226 crore, with solid demand for solar PV modules and EPC services.

• EBITDA Surge: Operating profit increased more than two times to approximately ₹1,400-₹1,567 crore, and the EBITDA margins began to be in the low-mid 20% range, indicating superior pricing and operation leverage.
  

• Premium Product Mix: A higher contribution from value-added, premium solar modules and project execution boosted realisations and supported profit expansion.
  

• Volume and Scale Effects: The higher the production volumes, the more the per-unit costs were, and the better the verticals were operating in terms of profitability.
  

Such drivers were evident in driving up an exceptional quarter. But what was the contribution of the various business segments to this performance?

How Did Different Parts Of The Group Perform?

• PV Module Manufacturing: The main business recorded significant uptake because domestic demand increased and capacity build-ups continued.
  

• Project & EPC Segment: Waaree Renewable Technologies, the EPC segment of the group reported the highest-ever quarterly revenue and doubled PAT as it streamlined the project implementation processes and entered the new verticals of the business: battery energy storage systems (BESS) and data centre power solutions.
  

• Diversified Growth: Manufacturing and EPC divisions demonstrated good growth, which is directed towards a more balanced business model as opposed to overdependence on a single business segment.
  

• 1H FY26 Momentum: Inconsistently recorded half-yearly figures of growing revenues and EBITDA which shows that the trend could not be limited to a single quarter.
  

The expansion in the verticals is impressive, but let’s see what the margin and cash performance say about the sustainability of such performance.

What Do The Margins And Cash Metrics Tell Us?

• EBITDA expansion: EBITDA rose sharply, implying operating leverage as volumes increased.
  

• PAT margin lift: PAT margin improved by double digits versus the prior year’s quarter.
  

• Cash flow & capex: The company has been investing to scale capacity; if funded sensibly, capacity expansion could sustain revenue growth; however, higher inventories and receivables could weigh on free cash flow in the near term.
  

Now the question arises - Will cash conversion keep pace with profit growth, or will working-capital needs erode returns? Let’s discuss it further.

Where Does Waaree Stand Versus Peers And Policy Tailwinds?

India’s solar manufacturing and installation markets are benefiting from policy support, domestic manufacturing incentives, GST rationalisation in the consumer durables/renewables supply chain and an expanding renewable pipeline. Waaree, as one of India’s largest module manufacturers, is well-placed to capture this tailwind. Markets have noticed: the stock moved strongly on the results, reflecting heightened investor interest. Waaree’s recent scale-up and improving margins make it a favourable play relative to module peers, though valuation discipline versus future earnings is crucial.

What Investors Should Watch Next

• Quarterly revenue trajectory for Q3 and FY26 guidance.

• Gross and EBITDA margin progression as commodity prices change.

• Working capital and inventory days, to assess cash conversion.

• Order book quality (module orders vs. EPC contracts) and realisation trends.

• Any one-offs or exceptional items in Q2 that might have inflated PAT.

Conclusion

Waaree’s Q2 performance is impressive on both top-line and bottom-line metrics, and the company appears to be capitalising on demand and scale. Yet, as with any high-growth manufacturing story, the sustainability of margins, cash-flow conversion and execution on capex remain the decisive variables for investors. So, will Waaree translate this quarterly surge into consistent, long-term value creation, or will the next market cycle test whether these gains are repeatable?

References

The Economic Times
Goodreturns
Mercomindia.com
NDTV Profit
mint
PV Magazine India