Waaree Energies shares: America has decided to impose 126 percent tariff on solar imports from India. Despite this, brokerages are bullish on the shares of Waaree Energies, a company related to the energy sector. On one hand, the condition of solar stocks is bad due to the decision of the US Commerce Department to impose countervailing duty on the import of solar panels. At the same time, Vaari Energies is unaware of all this. In fact, the management of Vari Energies has said that there is no possibility of this tariff imposed by America having any impact on the company.
Brokerage has confidence in Vaari’s shares
Motilal Oswal Financial Services Limited (MOSFL) said that concerns regarding initial 126 percent countervailing duty (CVD) are not expected to have any significant impact on the company. The brokerage said, “Waari Energies (WEL), which earns about one-third of its earnings from the US, does not use solar cells made in India for its US supplies, hence the initial 126% CVD (countervailing duty) is not expected to have any significant impact on WEL’s earnings. Motilal has set a target price of Rs 3514 for it. Currently the share price is Rs 2709.60.
Wari signs its first electrolyzer/GH2 supply order, invests $30 million in polysilicon supply in Oman to move away from just module/cell play, Nuwama said. Its 70 per cent revenue share from retail (20–25 per cent), export/US manufacturing (30–35 per cent) and EPC/O&M (18–20 per cent) provides a strategic moat that can last for a decade. Apart from this, it has also entered into new green business to achieve rapid growth in the next 3–5 years. Nuvama has also given it a ‘BUY’ rating and a target price of Rs 3867.
Vaari’s position is better in America
Brokerage firm Emkay Global says, Vari does not use cells from India or any affected country for its supplies in America. Instead, it sources from other countries where US duty is less – i.e. 10 percent.
The company has increased its supply to the US, supported by multiple, FEOC-compliant sourcing. It has also increased its capabilities in America. The brokerage said the company is well positioned in the US with its diverse non-China sourcing (from polysilicon). The brokerage has advised to buy its shares with a target price of Rs 4260.
Why did America impose tariffs?
On February 24, America has imposed an initial countervailing duty of about 126 percent on shipments coming from India. This duty was announced after its trade authority made initial estimates that manufacturers in India were being unfairly subsidized. America believes that with the help of the Indian government (by providing cheap loans, tax exemption or concession on electricity), panels made in India are being sold cheaply in America. Due to this, American companies are facing difficulties in competing with them and they are incurring losses. Countervailing duty is imposed to compensate for subsidies provided by foreign governments, which allegedly give unfair price advantages to exporters in the importing country.
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