Waaree’s gross margins are much higher than last quarter and even on a H1 basis: CFO

Sonal Shrivastava, CFO, Waaree Energies, says gross margins have come up much higher than the last quarter and even on the H1 basis. Waaree’s focus is on the margin to manage this current environment. They are watching closely for signs of stabilisation.

Shrivastava said their core strategy is to expand the portfolio of offerings to include batteries and electrolysers.

Let us talk about your volume and value growth because your revenue growth has been a little bit flattish, only 3% higher. What is the outlook?
Sonal Shrivastava: I will talk about the results. Basically, the volumes have grown quite a bit. It is about 39%. As we know, the prices have really softened from last year, so we see the impact in the total revenues. But still, we have managed to maintain our revenues as well as the margins.

Do you expect realisations to go down further?
Sonal Shrivastava: We have seen this decline in the last year or so. However, we do see a little bit of stabilisation at the moment and we are watching how it will pan out in the coming quarters. However, I also want to point out that we see a similar trend in the input costs, the main input costs that we use for the modules. So, if you see the margins, our gross margins, they have come up in fact much higher than the last quarter and even on the H1 basis. Our focus is on the margin to manage this current environment. However, do we see some stabilisation? We are watching closely.

Will margin levers expand further or do you see margins remaining range bound in the near term?
Sonal Shrivastava: No, we have announced earlier during our IPO roadshows that we have many levers which are going to come up. First of all, we will have additional capacity coming on, which also gives us cost dilution. We have our first cell plant, which is expected to go on stream by the end of this fiscal year and that is going to add to the margins. All our cost programmes are also in place in terms of the efficiency in the manufacturing processes.

Your order booking has been flat sequentially. Is there a challenge in winning new orders?
Sonal Shrivastava: Not really, we are just looking at how to book our orders for next year. Like you said, we are also fulfilling those orders and taking new, so it is a pretty stable situation. And as we will increase our capacity for next year, we will ramp up that as well.

Give us details of the capacity expansion timeline and what is getting commissioned over the next 12 to 18 months?
Sonal Shrivastava: The current capacity is about 13.3 gigawatts. We will soon be commissioning our US plant, which is 1.6 gigawatt by the end of this fiscal and thereafter, we have announced 6 gigawatt of integrated capacity as you know as part of our IPO process, which is 6 gigawatt of modules, 6 gigawatt of cells, and 6 gigawatt of ingot wafers. 5.4 gigawatt cell capacity is coming on stream by the end of this fiscal year.

Any initial implications of Trump 2.0, anything your shareholders need to know?
Sonal Shrivastava: First of all, we have a long-term view on the US market and as far as renewables are concerned, it is the cheapest and solar is the cheapest form of energy even in the US today. So, we expect some kind of fillip to continue. We are watching it very closely and we have an advantage that we have already put up our capacity there. We are very much a local player in the US market.

Finally, you are also looking at foraying into green hydrogen and battery storage. Can you tell us a little bit more about these plans? What is the strategy and the capex lined up?
Sonal Shrivastava: The board has just announced that we will be entering into the electrolyser business for green hydrogen, as well as the energy storage system. We have also announced about Rs 600-crore funding for our subsidiaries for development of infrastructure for land and connectivity for solar projects. This is, again, very much part of our energy transition that we have always spoken about.

It is our core strategy to expand our portfolio of offerings and it is a basket that we want to go with to the customers. So, we are looking at all of it. For the battery, as well as the electrolyser, we have had discussions with the board and will come back on the details in the coming months.