- Waaree Energies rebounds 0.5% despite a 10% dip yesterday.
- Premier Energies steadies above Rs 730, signaling limited tariff exposure.
- US counter‑vailing duties target only modules with India‑made cells – not assembled panels.
- Brokerages keep buy calls, with target prices ranging Rs 2,709‑3,867 for Waaree.
- Sector‑wide solar pack shows 1‑3% gains, hinting at a broader recovery.
You thought the US tariff scare would cripple Indian solar stocks—think again.
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Why Waaree Energies' US Capacity Expansion Offsets Tariff Risks
Waaree’s strategic push to build 4.2 GW of manufacturing capacity in the United States by mid‑2026 is the centerpiece of broker optimism. The US counter‑vailing duty of roughly 126 % applies only to modules that embed domestically produced solar cells. Waaree’s export pipeline to the US relies primarily on panels assembled with imported cells, meaning the duty’s hit on revenue is limited to a niche product line.
Nomura’s buy call with a Rs 2,709 target price assumes the US expansion will not only shield earnings but also create a “local content” advantage if the duty regime tightens further. Motilal Oswal’s higher Rs 3,514 target reflects confidence in the company’s diversified revenue mix, including green‑hydrogen projects that are unrelated to solar cell sourcing.
Premier Energies: Low Export Dependence as a Defensive Moat
Premier’s modest export ratio—roughly 20 % of total sales—means the firm is less vulnerable to the US tariff shock. Motilal Oswal’s Rs 1,000 target price hinges on the expectation that domestic demand, buoyed by government rooftop subsidies and utility‑scale contracts, will compensate for any export‑related headwinds.
Nomura’s neutral stance (target Rs 729) reflects a cautious view on near‑term volatility, especially with a second US ruling on alleged dumping slated for next month. Still, the consensus is that the market has already priced in the worst‑case scenario.
Sector‑Wide Implications: Solar Pack Stabilisation and Momentum
Beyond the headline names, the broader Indian solar pack—Borosil Renewables, Solex Energy, Sterling & Wilson Renewable Energy, Servotech Renewable Power System, and Websol Energy System—recorded 1‑3 % gains. This collective bounce suggests investors are discounting the tariff’s macro impact and refocusing on fundamentals: robust domestic demand, falling balance‑sheet costs, and the “greenium” premium for renewable projects.
Historically, the Indian solar sector has weathered external shocks. In 2020, a sudden GST increase on solar components caused a brief dip, yet the sector rebounded within three months as policy incentives and falling capex restored confidence. The current episode mirrors that pattern: an initial knee‑jerk sell‑off followed by rapid price correction once the duty’s scope was clarified.
Competitive Landscape: How Tata Power Solar and Adani Green Position Themselves
Tata Power Solar, a heavyweight with integrated cell‑to‑module capabilities, already sources a significant share of its cells from domestic manufacturers. Consequently, any future escalation of duties could impact Tata more than Waaree, which relies on imported cells for its US‑bound modules. Adani Green, meanwhile, is accelerating its own solar module fabrication lines, aiming for self‑sufficiency. Both firms are watching Waaree’s US capacity rollout as a benchmark for mitigating export‑related tariff exposure.
Technical Corner: Counter‑vailing Duties Explained
A counter‑vailing duty (CVD) is a trade remedy levied to offset subsidies provided by a foreign government to its exporters. In this case, the US Commerce Department concluded that Indian manufacturers receive subsidies that could harm US producers, prompting the provisional 126 % duty. Crucially, the duty applies only when the subsidised component—here, the solar cell—is part of the imported product. Modules assembled with foreign‑origin cells escape the charge, creating a nuanced risk profile for exporters.
Historical Context: Tariff Shocks and Market Resilience
When the US imposed anti‑dumping duties on Chinese solar panels in 2012, Indian exporters saw a temporary advantage, but the broader market adjusted as global supply chains diversified. The key lesson: tariffs often reshape, rather than eradicate, trade flows. Companies that can pivot sourcing strategies or localise production tend to emerge stronger.
Investor Playbook: Bull vs. Bear Cases
Bull Case
- Waaree’s US capacity reaches 4.2 GW on schedule, unlocking a tariff‑free revenue stream.
- Domestic solar demand accelerates due to higher renewable targets and attractive financing.
- Green‑hydrogen and electrolyser contracts add a high‑margin, non‑tariff‑exposed revenue line.
- Valuation gaps close as analysts raise target prices, driving share price upside of 15‑25 %.
Bear Case
- US imposes a second, broader CVD covering assembled modules, eroding export margins.
- Domestic policy delays or subsidy rollbacks curb new rooftop and utility projects.
- Execution risk on Waaree’s US plant leads to cost overruns and delayed capacity.
- Share price corrects 10‑15 % as earnings forecasts are revised downward.
Investors should monitor the US Commerce Department’s next ruling, Waaree’s construction milestones, and domestic solar policy announcements to calibrate exposure. Position sizing that reflects the asymmetric risk—favoring firms with diversified cell sourcing and strong domestic pipelines—can capture upside while limiting downside.