Waaree Energies (WAAREEENER)

FairStock Score: 65/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• ROE of 34.49% and ROCE of 34.94% show exceptional capital efficiency
• Low leverage with Debt/Equity of 0.26 and Altman Z-Score of 4.84
• Strong growth: 91.18% profit growth, 64.92% sales growth, 49.21% 5-year revenue CAGR
• Piotroski F-Score of 8/9 indicates solid financial health
• Promoter holding of 64.22% aligns management with shareholders

Concerns

• Price of ₹3,413 is far above Graham Number of ₹1,050.89, giving a margin of safety of -157.81%
• Free cash flow is deeply negative at -₹3,648 Cr despite reported profits
• P/B of 10.36 and P/E of 22.39 leave little room for growth disappointment
• Dividend yield of only 0.07% offers no income cushion for shareholders

AI Analysis

At ₹3,413, Waaree Energies is being priced for excellence — and in many ways it has delivered excellence. A 34.49% return on equity and 34.94% ROCE with debt/equity of only 0.26 would make any capital allocator pause and take notice. Sales have compounded at 49.21% over five years, the latest quarter shows sales of ₹7,565 Cr and net profit of ₹1,107 Cr, and profit growth of 91.18% has outpaced sales growth of 64.92%. The Piotroski score of 8/9 and Altman Z-score of 4.84 also suggest a financially sound business with low bankruptcy risk. But I buy at a price, not just a story. At ₹3,413, I am paying 10.36 times book value for a company with a book value of ₹329.55. Graham's number is ₹1,050.89, so my margin of safety is deeply negative at -157.81%. A P/E of 22.39 looks acceptable only if very high double-digit growth continues; the PEG of 0.14 assumes the 91% profit growth is durable. The larger flaw is free cash flow of minus ₹3,648 Cr. Profits are being reported, but cash is not appearing at the owner level. That bothers me enormously. Low debt buys time, but growth is consuming capital, and the dividend yield of 0.07% means shareholders are entirely dependent on continued reinvestment success. This is a fast grower with excellent fundamentals, but the price leaves no room for error. A wonderful business can still be a bad investment if you overpay. At this price, I would watch and wait, not commit. I need to see free cash flow turn positive and a price closer to intrinsic value before this becomes a Graham-style bargain.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer