Waaree Renewab. Q1 FY26 Results (NSE: WAAREERTL)
Signal: Margin pressure
The read
Q1FY26 marks the first full-quarter consolidation of APSPL, turning Waaree Renewable into a diversified EPC player (solar + T&D). Revenue grew 53% YoY but margins contracted due to the lower-margin T&D contribution; all growth is organic — no exceptional items. The core solar EPC business (standalone) continues to deliver 34.5% revenue growth with stable 19.3% operating margins. The PAT-to-EPS divergence due to minority interest is a key concern for minority holders.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹924.25 Cr | 53.2% | -16.1% |
| EBIT | ₹163.39 Cr | 40.2% | |
| Net profit | ₹111.98 Cr | 37.9% | |
| EPS | ₹11.11 | 34.0% | |
| EBIT margin | 18.1% |
P&L walk
Revenue grew 53% YoY but fell 16% QoQ; EBITDA margin contracted 120bps YoY to 18.1% due to inclusion of the newly-acquired T&D segment which operates at lower margins; PAT grew 38% YoY but EPS growth lagged PAT due to dilution from subsidiary's minority interest and ESOP charge.
Segments
Consolidated revenue was boosted by ₹11,281 lakh from the new T&D segment (APSPL, consolidated only 13 days), which contributed an EBIT margin of ~9.2% vs solar EPC's 19.0%, lowering group margins; the solar EPC standalone segment showed 34.5% revenue growth with stable margins.
Key positives
- Consolidated revenue grew 53.2% YoY to ₹92,425 lakh, driven by strong execution in solar EPC and initial contribution from T&D.
- Core standalone solar EPC revenue grew 34.5% YoY with operating margin of 19.3%, demonstrating pricing discipline and steady demand.
- Gross margin expanded 140bps YoY (cost of EPC contracts as % of revenue improved) due to better project mix.
Key concerns
- Consolidated EBITDA margin contracted 120bps YoY to 18.1% due to lower-margin T&D segment (9.2% EBIT margin vs solar's 19.0%) and higher employee/finance costs.
- PAT growth (37.9%) lags revenue growth (53.2%) as margins compress; sequential revenue fell 16.1% QoQ.
- EPS growth of 34.0% trails PAT growth due to minority interest of ₹307.61 lakh (45% of APSPL's profits accruing to non-controlling holders) and ESOP dilution.
- Finance costs surged 169% YoY to ₹958.62 lakh, reflecting debt taken for the APSPL acquisition.
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