Waaree Q2 Revenue Jumps 37% as EPC Falls, Borrowings Soar

Waaree Renewable Technologies Ltd released its financial results for the second quarter of fiscal year 2027, marking a significant shift in its revenue composition. The company reported that consolidated revenue increased by 36.5% year-on-year, reaching ₹1,057.84 crore for the quarter ending September 30, 2026. This performance contrasts with the prior year’s Q2 revenue, which stood at ₹774.78 crore.

According to Saur Energy, the growth reflects a broader diversification strategy rather than expansion in the company’s traditional solar engineering, procurement, and construction (EPC) business. While the top line expanded, the underlying drivers of that growth have moved away from solar project execution toward transmission and distribution infrastructure.

The financial filing indicates that the company is leveraging its balance sheet to support this transition, with revenue figures suggesting a heavy reliance on new business verticals to offset declines in core solar operations.

EPC Decline and Profitability

The core solar engineering, procurement, and construction segment saw a sharp contraction, with revenue dropping 42.2% to ₹444.98 crore in the second quarter of fiscal year 2027. This figure is down from ₹769.19 crore recorded in the same period last year.

The reduction in high-volume EPC activity directly impacted the bottom line. Profit after tax fell nearly 30% to ₹81.48 crore, compared to ₹116.36 crore in the prior year period. When a significant portion of revenue comes from project execution, a drop in that segment usually compresses overall profitability, even if other business lines are growing. Investors often view EPC margins as a key indicator of a company’s ability to manage construction costs and supply chain logistics, making this quarter’s decline a notable data point for assessing operational efficiency.

This divergence between total revenue growth and EPC shrinkage highlights a structural change in how the company generates income. Instead of relying on the cyclical nature of solar project installation, the financial profile now leans more heavily on other verticals. For stakeholders, understanding this shift is vital because EPC businesses often carry different risk profiles and capital requirements compared to manufacturing or transmission assets, influencing how the market values the firm’s future cash flows.

Margins and Cost Structure

While top-line revenue surged, the underlying profitability metrics reveal a starkly different picture for Waaree Renewable Technologies in the second quarter of fiscal year 2027. The company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) edged up slightly, yet the margin compressed significantly, indicating that the additional revenue carried higher associated costs or lower relative profitability. This contraction is largely attributable to a substantial increase in fixed and financial burdens, specifically depreciation and finance costs, which absorbed a larger share of operating income.

Metric	Q2 FY27 (₹ Cr)	Q2 FY26 (₹ Cr)
EBITDA	159.98	157.95
EBITDA Margin	15.12%	20.39%
Finance Costs	36.83	3.62
Depreciation & Amortisation	26.97	2.18

The jump in depreciation and amortization from ₹2.18 crore to ₹26.97 crore suggests a significant expansion in the asset base, likely tied to the new business verticals driving revenue growth. Similarly, finance costs ballooned to ₹36.83 crore from ₹3.62 crore, reflecting the heavy borrowing mentioned in the company’s filings. For investors, this shift highlights that while revenue is growing, the capital intensity of the new operations is diluting margins. High leverage increases financial risk, as interest payments become a fixed obligation regardless of project performance, potentially squeezing cash flow available for dividends or reinvestment.

T&D Growth and Acquisition

• Waaree Renewable acquired a 55% stake in Associated Power Structures Pvt Ltd (APSPL) during fiscal year 2027.
• The transmission and distribution (T&D) segment contributed ₹606.13 crore to consolidated revenue in the second quarter.
• Cumulative rooftop solar projects commissioned by the company reached 59.26 MWp.

The acquisition of APSPL represents a strategic pivot toward infrastructure, a sector that often provides more stable, long-term cash flows compared to the project-based volatility of solar construction. By securing a majority stake, Waaree integrates APSPL’s operations into its consolidated financials, allowing the parent entity to capture the revenue from these grid connectivity and structural works directly. This move aligns with broader industry trends where solar developers diversify into ancillary infrastructure to mitigate the lumpy nature of EPC contracts and ensure consistent income streams.

The T&D segment’s contribution of ₹606.13 crore in the second quarter underscores the immediate impact of this diversification on the company’s top line. This figure significantly exceeds the total revenue reported in the same period of the prior year, highlighting how the new verticals are now the primary engine of growth. Alongside this, the accumulation of 59.26 MWp in commissioned rooftop solar projects demonstrates continued activity in the distributed generation space. While rooftop solar typically involves smaller, fragmented contracts, its steady commissioning supports a diversified portfolio that balances large-scale infrastructure investments with decentralized energy assets.

What to watch

The most immediate metric to monitor is the trajectory of the company’s debt load. Total borrowings stood at ₹1,412.99 crore as of September 30, 2026, a massive increase from ₹81.67 crore at the end of March 2026. This rapid accumulation of leverage reflects the capital intensity of the recent expansion, particularly in the transmission and distribution vertical. For lenders and equity holders, the key question is how quickly operating cash flows from the newly integrated infrastructure assets can service this debt. High borrowing levels increase sensitivity to interest rate fluctuations, meaning any rise in financing costs could further compress the already thin margins observed this quarter.

Investors should also track whether the debt-funded expansion translates into sustained revenue growth beyond the initial integration period. The jump in borrowings suggests significant capital expenditure has been deployed, likely for acquiring stakes or building capacity. The upcoming quarters will reveal if these investments generate the expected cash inflows to offset the heavy finance costs. Without a clear path to deleveraging or improved operational efficiency, the high debt-to-equity ratio could limit the company’s financial flexibility. Watch for any announcements regarding debt restructuring or new equity funding that might provide a cushion against the current leverage levels.