1. At a Glance
Waa Solar is a Gujarat-based SME solar power company under Madhav Power Pvt. Ltd. It’s got land, panels, and potential… but also contingent liabilities, pledged shares, and profitability that flickers like a dying CFL.
2. Introduction with Hook
Picture a solar panel during monsoon — full of potential but constantly battling clouds. That’s Waa Solar for you. With a ₹98 Cr market cap and EPS of ₹5+, it’s technically profitable. But this solar player’s fundamentals are like its sunlight — occasionally blocked by debt, working capital issues, and promoter pledges.
- P/E: 14.1 — reasonable for SME space
- Book Value: ₹141 — stock trades at just 0.53x BV
- Promoter pledge: 75.2% — wait, what?!
3. Business Model (WTF Do They Even Do?)
Waa Solar isn’t just putting up panels — it’s setting up a web of SPVs:
- Owns and operates solar power plants
- Develops and invests in SPVs for renewable projects
- Recently started EPC (Engineering, Procurement, Construction)
- Power off-take primarily through state & central schemes (e.g. PM-KUSUM)
But…
- EPC just started — no financial impact yet
- Disinvestment in some subsidiaries = course correction?
4. Financials Overview
| Metric (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Sales | 48.7 | 26.4 | 28.3 |
| Operating Profit | 35.4 | 18.3 | 10.4 |
| OPM % | 72.7% | 69.3% | 36.6% |
| Net Profit | 10.4 | 6.6 | 7.0 |
| EPS (₹) | 7.42 | 5.00 | 5.25 |
Highlights:
- Margins compressed, but still solid
- Consistent (if modest) profitability
- No dividend despite profits
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹74.3 |
| P/E | 14.1 |
| Book Value | ₹141 |
| P/B | 0.53x |
| Dividend Yield | 0.00% |
Fair Value Range:
Considering its asset base, earnings, and SME risk premium:
₹70 – ₹120
Below ₹75? Possibly undervalued. Above ₹120? Needs major operational ramp-up to justify.
6. What’s Cooking – News, Triggers, Drama
- PM-KUSUM Project: 14.96 MW approved — execution awaited
- Rights Issue: ₹49 Cr raise approved in FY25
- Migration to Main Board: In the pipeline
- IT Department Search (May 2024): Red flag raised
- Heavy SPV disinvestment activity in 2024
Upcoming triggers
- Execution of Gujarat solar plant
- Results post-rights issue deployment
- Main board listing = liquidity boost
7. Balance Sheet
| Metric (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 13.27 | 13.27 | 13.27 |
| Reserves | 166.94 | 168.9 | 173.8 |
| Borrowings | 93.5 | 50.8 | 142.3 |
| Total Liabilities | 298.5 | 234.6 | 333.3 |
| Fixed Assets | 106.6 | 44.4 | 98.4 |
Key Points:
- Borrowing dipped in FY24, but jumped again in FY25
- Net worth positive, but asset-heavy model
- ₹190 Cr contingent liabilities = headache waiting to happen
8. Cash Flow – Sab Number Game Hai
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Cash from Ops | ₹36.86 | ₹16.54 | -₹4.55 |
| Cash from Investing | -₹1.29 | ₹49.87 | -₹62.95 |
| Cash from Financing | -₹30.9 | -₹66.9 | ₹86.3 |
| Net Cash Flow | ₹4.65 | -₹0.53 | ₹18.8 |
Insights:
- FY25 cash from investing = likely asset purchase or SPV exits
- FY25 financing cash = rights issue effect
- Volatile but not bankrupting — yet
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 6.7% | 3.8% | 3.2% |
| ROE | 6.2% | 4.0% | 3.8% |
| Debtor Days | 91 | 179 | 215 |
| CCC (Days) | 91 | 385 | 215 |
| Promoter Pledge | High | High | 75.2% |
Verdict:
- Profitability = meh
- Collection = slow
- Pledge = burn-the-roof-off level risky
10. P&L Breakdown – Show Me the Money
| Period | Sales | OPM % | Net Profit | EPS |
|---|---|---|---|---|
| Sep ’24 | ₹14.4 | 32.7% | ₹-0.29 | -₹0.22 |
| Mar ’25 | ₹13.9 | 40.8% | ₹7.26 | ₹5.47 |
Hmm…
- March was great, but September loss = volatile earnings
- Solar tariffs and SPV accounting likely play a role
11. Peer Comparison
| Company | CMP | P/E | ROCE | ROE |
|---|---|---|---|---|
| NTPC | ₹342 | 14.1 | 10.8% | 13.6% |
| Adani Green | ₹1,030 | 100.5 | 8.7% | 14.6% |
| JSW Energy | ₹530 | 51.9 | 6.5% | 7.4% |
| Waa Solar | ₹74.3 | 14.1 | 3.2% | 3.8% |
Conclusion:
- Cheap on valuation
- Weak on returns
- Not comparable in scale or balance sheet strength
12. Miscellaneous – Shareholding, Promoters
| Category | Mar ’25 |
|---|---|
| Promoters | 67.86% (75.2% pledged) |
| Public | 32.14% |
| FII / DII | Nil |
Observations:
- No institutions onboard
- Massive promoter pledge = governance flag
- Retail interest rising — potentially speculative
13. EduInvesting Verdict™
Waa Solar is your typical SME story — dramatic price swings, decent revenue, and a “maybe someday” dream of becoming a smallcap darling. Right now?
It’s undervalued on book, but over-leveraged on paper.
Great for:
✅ Deep value contrarians
✅ Those betting on main-board migration
Avoid if you:
❌ Don’t enjoy pledging anxiety
❌ Need consistent FCF or dividend
Bottomline:
Cheap for a reason. Buy only if you’re ready to babysit.
Metadata
– Written by EduInvesting Analyst | July 21, 2025
– Tags: Waa Solar, SME Stock, Solar Energy, SPVs, Green Power India, Rights Issue, PM-KUSUM Yojana, Promoter Pledge Risk
