Dear shareholders,
Humankind stands at a decisive moment when, for the first time in
recorded history, it enjoys access to affordable sustainable renewable energy. This
indicates that this limitless resource can be harnessed affordably, opening up infinite
possibilities for enhancing well- being and prosperity. This reality places a premium on
speed and sustainability for companies engaged in manufacturing renewable energy
generation equipment.
The objective is not merely to build and market more, in order to
generate higher revenues or surplus, but to manufacture competitively, service a rapidly
growing market and ensure that the benefits of this landmark technological development
accrue to all.
At Waaree Energies, we went into business with this missionary
objective, recognising the importance of being engaged in a business that could change
lives, combat climate change and create a safer world for humankind.
The company took this priority more seriously than one would expect, by
responding with the urgency that it warranted. The company was not just committed to
building, but to building with speed. The company was not merely committed to scaling, but
to building one of the world's largest solar panel capacities. The company was not merely
committed to marketing solar panels, but in creating a competitive advantage that
translated into superior capital efficiency.
We believed that this differentiated approach - the ability to seek
specific outcomes beyond the generalised - would accelerate us towards a larger scale,
strengthen economies, generate superior margins, enhance reinvestment, increase the role
of net worth over debt, strengthen our credit rating and create a growth engine that would
be safe, secure and sustainable.
I am pleased to report that this strategic clarity has helped Waaree
Energies emerge as arguably the world's largest solar panel company outside of China. This
positioning empowers us to play a decisive role in offsetting climate change, moderating
the role of fossil fuels, catalyzing India towards its stated goal of achieving 500 GW in
renewable energy capacity by 2030 and creating a competitive advantage for India in the
global community of nations.
At Waaree Energies, we are proud to play a distinctive role in helping
India transition its energy landscape. During the last couple of decades, India's per
capita consumption of energy has increased sharper than in most countries. This has raised
the apprehension that, if left unaddressed, an increase in the consumption of fossil fuels
could accelerate greenhouse gas emissions. By the virtue of scaling our manufacturing
capacity with speed, we are playing a critical role in moderating India's emissions,
transitioning the country with speed to a clean energy alternative.
There is a second contribution to the Indian growth story that we are
proud of. Historically, Indian manufacturers lacked scale and technology. This compelled
India to import products and technologies, remaining restricted in freedom and capability.
The result was that most Indian players, dependent on imported technology, remained
sub-optimal when it came to their manufacturing capacities and these capacities being
small, were not taken seriously at a global level.
At Waaree Energies, we have emerged as a game-changer for good reasons.
First, we have increased our manufacturing capacity significantly
in the past three years, which is considerably higher than the Indian renewable energy
sector's average growth. The result is that we are bringing to our space a corresponding
seriousness.
Second, we manufactured solar panels within India, creating an
ecosystem within the country for components, one of the first such instances being
attempted within the country.
Third, we exported products to more than 20 countries. In FY 2022-
23, Waaree Energies generated an aggregate of H46,165.39 million from exports, validating
Indian quality in a technologically complex space.
Fourth, by the virtue of being able to manufacture a product that
compared well with the best in the world, the company was empowering customers - in India
and outside - to switch to a cleaner and cheaper energy source, enhancing their downstream
competitiveness.
The bottomline is that Waaree Energies is not merely engaged in
building a larger and more profitable company; it is engaged in building a competitively
modern India and world.
At Waaree Energies, we believe that our operating headroom is vast and
perpetual. Our opportunity is large enough to provide multi-year revenue visibility, which
is reflected in our order book of H4,31,129.40 million as of March, 2023. We grew our
revenues 51.21% in the three years ending FY 2022-23 and we expect to sustain our growth
percentage even on a larger base moving forward.
At Waaree Energies, we have responded to this opportunity with a robust
business model. We have expanded our manufacturing capacities to 12 GW recently, aiming
for an estimated 20 GW by FY 2024- 25. This expansion is expected to consolidate our
leadership in India, where our nearest competitor is only a fraction of our size.
We will grow our business through net worth, from the surpluses we
generate and timely infusions of external capital. We believe that each dilution will be
value-accretive for the company without excessive equity dilution that could have
otherwise impacted earnings per share or the promoter's ownership.
We have prioritised capital efficiency to counter the possibility of
operational slackness during a phase of rapid growth. In view of this, the company engaged
a leading international management consultancy to propose improvements, including
digitalisation, that can enhance our systemic efficiency. This is expected to keep us lean
even as we grow rapidly, enabling us to generate incremental margins and reinvest
surpluses to satisfy our growing appetite for capital.
We are expanding the frontiers of our value chain through backward and
forward linkages. Over the next two years, we intend to manufacture silicon ingots and
wafers, which will make it possible to produce panels at competitively a lower cost. We
are in the process of setting up one-megawatt green hydrogen manufacturing capacity, as
well as exploring opportunities in electrolyze production. This will empower the entire
value chain, tapping into emerging downstream renewable energy forms that could strengthen
our position as a one-stop clean energy solutions provider.
We will continue benchmarking our solar panel technology against
cutting-edge standards, aiming for a capacity utilisation factor (CUF) higher than the
prevailing average and reporting solar panel degradation slower than the industry average
- the foundation of our operational sustainability. Besides, a portfolio of
certifications, in terms of their number and stringency, is expected to open larger
markets and attract more marquee clients, catalyzing our growth.
We will keep deepening our governance through a Board of Directors
comprising professional individuals of standing. Our company consists of a responsible
convergence of family members with specific responsibilities, coupled with professionals.
We are a process- driven organisation, guided by modern management practices and
certifications. We are delving deeper into digitalisation, automating processes and
enhancing operational efficiency. As a validation of our governance, Waaree Energies has
been rated as a Bloomberg Tier One company, the only Indian company to receive this
recognition for more than eight successive years.
At Waaree Energies, we believe that the confluence of these realities
will help us retain our sectorial leadership, translating into enhanced value for all our
stakeholders.
Hitesh Chimanlal Doshi
Chairman & MD