Waaree Renewables Technologies Ltd Management Discussions

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2024

GLOBAL ECONOMY

Despite facing significant challenges, the global economy has demonstrated remarkable tenacity, driven by steady growth and a rapid decrease in inflation. The journey has been marked by events such as post-pandemic supply-chain disruptions, an energy and food crisis triggered by the Russia- Ukraine conflict, and a surge in inflation, followed by synchronised monetary policy tightening.

Global growth, which reached 3.2% in CY 2023, is forecasted to remain steady through CY 2024 and CY 2025. However, this falls short of the 3.8%Global Economic Growth (in %)historical average, due to restrained monetary policies, diminished fiscal aid, and sluggish productivity growth. Global headline inflation is expected to moderate considerably, falling from an annual average of 6.8% in 2023 to 5.9% in 2024 and further to 4.5% in 2025. This decline is primarily due to a sharper reduction in inflation within advanced economies, which are projected to return to pre-pandemic levels more quickly than emerging markets and developing economies.

Outlook

The global economic outlook is marked by balanced risks and ongoing uncertainties. Geopolitical tensions and conflicts, such as those in Ukraine and the Middle East, could spike prices and weaken asset values. Varied rates of disinflation among major economies may cause currency fluctuations, impacting financial sectors. High interest rates, household debt, and mortgage adjustments pose financial stability risks.

Chinas growth is threatened by its trade war with major economies like the US and geopolitical tensions which have begun to turn into domestic issues of unresolved property sector issues, potentially affecting trading partners. High government debt levels may require disruptive fiscal adjustments, undermining investor confidence and climate change efforts. Geo-economic fragmentation could further hinder supply dynamics. Conversely, quantitative4/04/16/world-economic-outlook-apnl-2024)easing as measure of fiscal policy might boost shortterm economic activity but necessitate significant future adjustments. Rapid inflation decline could lead central banks to ease policies sooner. Interest rates are beginning to decline in Europe, accompanied by dovish statements from Western economists. Central banks will be crucial in managing inflation to achieve a soft economic landing. Medium-term fiscal consolidation is needed to ensure debt sustainability and maintain vital investments. Tailored policies and supply-enhancing reforms are essential for addressing inflation, reducing debt, fostering growth, and narrowing income disparities. Additionally, multilateral cooperation is vital to tackle global challenges such as geo-economic fragmentation, climate change, and debt restructuring, promoting a sustainable and inclusive recovery.

INDIAN ECONOMY

Since the Covid-19 pandemic in 2020, Indias economy has shown remarkable resilience and sustained growth over the past three years, despite facing global economic challenges. This robust trajectory is supported by stringent policy measures and the resurgence of the private sector. Looking ahead, the country is poised for further economic advancement. This can be attributed to substantial investments in emerging sectors, continued government spending, policy reforms, and efficiency gains from digitalisation and infrastructure upgrades.

In FY 2023-24, Indias economy grew impressively at 8.2%, surpassing previous forecasts. However, GDP growth is expected to moderate to 7.2% in the next fiscal year due to elevated interest rates and constrained fiscal policy aimed at reducing the deficit to 5.1% of the GDP. Despite these challenges, Indias economy remains vibrant, bolstered by strengthened consumer purchasing power through disinflation, robust agricultural outputs, and a revival in private capital expenditure. Government initiatives to boost rural incomes and enhance infrastructure spending have solidified Indias status as the fastest-growing major economy globally.

Outlook

Indias economic future appears promising, with projections suggesting it will reach a USD 7 trillion milestone by 2031, becoming the worlds third- largest economy. This growth will be driven by capital and productivity enhancements through the integration of digital and physical infrastructure. The manufacturing sector is expected to revive, benefitting from global opportunities, domestic policy support, and a focus on green energy transition.

Robust growth in capital expenditure will be driven by industrial vigour and efficient infrastructure development. This will be further supported by the sound financial health of Indian corporates, consistent revenue growth, and an optimistic commodity price outlook. The Governments production linked incentive (PLI) scheme aims to elevate Indias manufacturing prowess globally, complemented by a strong banking sector and innovative financing avenues. Overall, Indias economic journey is fortified by domestic reforms, competitive advancements, and a commitment to value-added growth, further strengthened by substantial infrastructure development nationwide.

GLOBAL RENEWABLE ENERGY SECTOR

Overview

The global renewable energy sector experienced significant growth in 2023, with annual capacity additions reaching nearly 507 gigawatts (GW), a 50% increase from the previous year. China led the way with extraordinary acceleration, commissioning as much solar PV in 2023 as the entire world did in 2022. Wind energy also saw substantial growth, with Chinas wind additions increasing by 66% Y-o-Y

Renewable energy now accounts for a significant portion of the global power mix, with the capacity expected to reach 7,300 GW by 2028. Solar PV and wind energy are set to dominate the expansion, constituting 95% of global renewable expansion. The sectors growth has been supported by favourable policies in over 130 countries and increasing economic attractiveness of renewable energy compared to fossil fuels.

Outlook

Looking ahead, the global renewable energy sector is poised for further expansion, driven by supportive policies and improving cost competitiveness. By 2028, almost 3,700 GW of new renewable capacity is expected to come online with a total capacity of 7,300 GW, with solar PV and wind energy continuing to lead the way. Several milestones are projected, including renewables surpassing coal as the largest source of electricity generation by 2025.

China is expected to remain a powerhouse in renewable energy, accounting for almost 60% of the new capacity globally by 2028. The US, EU, India, and Brazil are also expected to significantly increase their renewable capacity. Moreover, with the worlds vision to limit global warming to 1.5 ?C and carbon dioxide emissions to net zero by 2050, there is a need to triple almost annual additions of renewable power capacity from the current levels by 2030.

Global Key Trends

The global renewable energy sector is experiencing robust growth, driven by supportive policies and cost competitiveness. China is rapidly deploying onshore wind and solar PV, targeting the countrys 2030 goals six years early despite subsidy cuts. The US is expanding solar PV and wind capacity with support from the Inflation Reduction Act, while the EU is witnessing a surge in rooftop solar PV to lower electricity costs. India is fast-tracking wind and solar PV auctions, and Brazil leads in biofuel expansion, driving 40% of global demand growth. The Middle

East and North Africa are enhancing solar PV and wind power through policy incentives. Despite challenges in policy implementation and financing, renewables are set to play a pivotal role in the global energy transition.

INDIAN RENEWABLE ENERGY SECTOR

Overview

India has emerged as a global leader in renewable energy, ranking fourth in installed capacity worldwide.

Over the past eight years leading up to 2024, the country has seen a remarkable 396% increase in its renewable energy capacity, signalling a strong commitment to clean energy. According to the IMARC group, in 2023, the Indian renewable energy market reached USD 22.0 billion and is projected to reach USD 46.7 billion by 2032, at a CAGR of 8.71%. This growth is driven by rapid technological advancements, growing concerns about climate change, and the increasing demand for clean energy solutions. (Source: https://www.imarcgroup.com/india-renewable- energy-market)

(Source: https://www.imarcgroup.com/india-renewable- energy-market)

By July 2024, India witnessed substantial growth in renewable energy installations. The country added approximately 20,427 MW of solar capacity and 4,442 MW of wind capacity. As of July 2024, Indias cumulative renewable energy installed capacity reached 197.2 GW, underscoring its steadfast commitment to advancing the renewable energy sector.

(Source: https://mnre.gov.in/physical-progress/)

Outlook

Indias renewable energy sector is poised for significant growth, driven by government initiatives and increasing environmental concerns. The gap between installed capacity and actual electricity production highlights the need for better storage solutions to address the intermittent nature of renewables. India is committed to generating 40% of its electricity from non-fossil fuel sources by 2030. The country also aims to establish 450 GW of renewable energy by the same year, along with providing 1.7 million solar pumps to farmers under the Pradhan Mantri-Kusum Yojana. At COP26 in 2021, India updated its Nationally Determined Contributions (NDCs) to reduce the emissions intensity of GDP by 45% by 2030 from 2005 levels. Additionally, India aims to achieve 50% cumulative electric power installed capacity from non-fossil fuels by 2030 and reach net-zero emissions by 2070. These targets are set to significantly boost the renewable energy sector in India, providing a clear direction for future regulatory and governmental efforts.

(Source: Solar power market in India-CRISIL India)

GLOBAL SOLAR CAPACITY

In 2023, the global solar PV market saw significant growth, with cumulative capacity rising to 1.6 terawatts (TW) from 1.2 TW in 2022. This growth was fuelled by the commissioning of 407.3-446 GW of new PV systems and an estimated 150 GW of modules in inventories worldwide. Despite past challenges with material and transport costs, the market benefitted from a substantial decrease in module prices due to oversupply. This kept solar PV competitive evenas electricity prices stabilised post-2022 peaks. The global PV growth outside China was 30%, while its domestic market grew by over 120%. The number of countries with PV penetration rates above 10% doubled to 18, including both smaller nations like Spain and larger ones like Germany. However, the market faced challenges in aligning production with demand, resulting in record low module prices and highlighting the difficulties of maintaining balance in a volatile environment. Policy support and domestic electricity prices continue to influence the market significantly. Solar PV played a vital role in reducing CO₂ emissions, contributing to over 75% of new renewable capacity and generating nearly 60% of new renewable energy in 2023.

(Source: https://iea-pvps.org/wp-content/uploads/2024/04/Snapshot-of-Global-PV-Markets_20241.pdf)

Outlook

The outlook for solar PV remains bright, with capacity additions expected to more than double by 2028 compared to 2022. Forecasts predict nearly 710 GW of new solar PV and wind capacity additions, continuously breaking records over the forecast period. This growth is propelled by lower generation costs compared to both fossil and non-fossil alternatives and ongoing supportive policies in various countries. However, the ability of local manufacturing projects to proceed remains uncertain due to the significant increases in manufacturing capacity in China, leading to supply outstripping global demand and consequent record low module prices.

(Source: https://iea-pvps.org/wp-content/uploads/2024/04/ Snapshot-of-Global-PV-Markets_20241.pdf)

INDIAN SOLAR ENERGY MARKET

In 2023, the Indian solar energy market generated USD 10.4 billion in revenue, with projections indicating expansion at a CAGR of 13.4%, reaching USD 24.9 billion by 2030. This growth is fuelled by government policies and initiatives such as the National Solar Mission (NSM), which provide regulatory support, subsidies, and financial incentives. The Ministry of New and Renewable Energy (MNRE) aims to increase the renewable energy share in Indias total energy mix through various schemes like the CPSU Scheme, Solar Park Scheme, Defense Scheme, VGF Schemes, Bundling Scheme, Grid Connected Solar Rooftop Scheme, and Canal Bank and Canal Top Scheme. (Source: https://www.psmarketresearch.com/market- analysis/india-solar-energy-market https://jmkresearch.com/india-installed-15-gw-solar-and- 3-3-gw-wind-capacity-in-fy2024/)

(Source: https://www.psmarketresearch.com/market- analysis/india-solar-energy-market)

Advancements in solar technology, the cost- effectiveness of solar energy, and rising energy demand are also driving the market. Indias geographic advantage, receiving around 5,000 trillion kWh of energy annually, coupled with international collaborations and foreign investments in R&D, further accelerates market growth.

In 2021, India installed 10.2 GW of solar capacity, which increased to 13 GW in 2022, marking a 27% growth. In Q1 of CY 2024, the country added about 18 GW of solar capacity, the highest ever for a quarter, representing a 400% Y-o-Y increase from Q1 CY 2023, according to Mercom India Research. Over the past three years, Indias solar sector has

grown significantly, achieving a cumulative installed capacity of 82 GW by March 2024.

FY 2023-24 saw an 18% increase in utility-scale solar capacity (11.5 GW) and a 34% rise in rooftop solar capacity (2,992 MW). Rajasthan, Gujarat, and Tamil Nadu led in large-scale installations, while Gujarat also topped rooftop solar growth. This robust expansion highlights Indias commitment to solar energy and presents a promising outlook for investors in the renewable energy sector.

(Source: https://www.psmarketresearch.com/market- analysis/india-solar-energy-market

https://jmkresearch.com/india-installed-15-gw-solar-and-

3-3-gw-wind-capacity-in-fy2024/)

Outlook

In 2023, Indias solar energy market was predominantly driven by solar PV, which accounted for around 75% of the market share. Indias global standing in solar PV deployment improved significantly, reaching the 5^th place worldwide in 2022. India has set a target of achieving 500 GW of non-fossil fuel energy capacity by 2030, with solar energy accounting for 280 GW of the overall capacity. To meet this goal, robust bidding plans are in place to secure 50 GW of renewable energy each year from FY 2023-24 to FY 2027-28. Government initiatives, including the PLI scheme, aim to boost domestic solar module production, reducing reliance on imports. According to the National Electricity Plan, solar capacity is expected to reach 186 GW by FY 2026-27 and grow further to 365 GW by FY 2031-32, underscoring Indias strong commitment to advancing sustainable energy.

(Source: https://www.ireda.in/images/HTMLfiles/23.pdf)

GLOBAL SOLAR EPC MARKET Overview

The global solar engineering, procurement, and construction (EPC) market is experiencing robust growth. This is driven by increasing awareness of climate change, decreasing costs and improving efficiency of solar technology, and the rising importance of CSR. The market was valued at over USD 251 billion in 2023 and is expected to surpass USD 423.8 billion by 2036, at a CAGR exceeding 4.3% during the forecast period of 2024-2036.

(Source: https://www.researchnester.com/reports/ solar-epc-market/5177#:~:text=In%20the%20year%20 2024%2C%20the,emissions%20and%20combat%20 climate%20change.)

(Source: https://www.researchnester.com/reports/ solar-epc-market/5177#:~:text=In%20the%20year%20 2024%2C%20the,emissions%20and%20combat%20 climate%20change.)

Outlook

The outlook for the solar EPC market is highly positive, with significant growth expected in the coming years. The increasing global focus on renewable energy sources, coupled with advancements in solar technology, is driving the adoption of solar energy across various sectors. Governments, businesses, and consumers are increasingly recognising the benefits of solar energy in reducing carbon emissions and achieving sustainability goals, which is further fuelling market growth.

(Source: https://www.researchnester.com/reports/ solar-epc-market/5177#:~:text=In%20the%20year%20 2024%2C%20the,emissions%20and%20combat%20 climate%20change.)

GROWTH DRIVERS

• Awareness of Climate Change: With the growing impact of climate change, there is a heightened awareness of the need to transition to clean, renewable energy sources. Solar energy is now the cheapest source of electricity in history, leading to a surge in demand globally. The International Energy Agency predicts that solar will become the largest source of electricity generation by 2050.

• Cost Reductions and Efficiency Improvements: The cost of solar technology has significantly decreased over the past decade, making it more accessible to consumers and businesses. Advancements in solar technology have also led to increased efficiency, meaning fewer panels are needed to generate the same amount of energy. These cost reductions

and efficiency improvements are driving the adoption of solar energy.

• Corporate Social Responsibility (CSR):

Companies are increasingly turning to solar energy to meet their energy needs while demonstrating their commitment to sustainability. Corporate giants like Walmart have set ambitious goals to power a significant portion of their operations with renewable energy, driving the demand for solar energy in the corporate sector.

(Source: https://www.researchnester.com/reports/ solar-epc-market/5177#:~:text=In%20the%20year%20 2024%2C%20the,emissions%20and%20combat%20 climate%20change.)

INDIAN SOLAR EPC MARKET

Indias solar EPC market is growing rapidly, driven by government initiatives, technological advancements, and rising demand for sustainable energy. Strategic planning is essential for companies seeking to capitalise on this expanding sector.

The solar EPC market is experiencing strong growth due to increasing consumer demand for eco-friendly products and advancements in technologies like AI and blockchain. Some of the notable trends in this regard include the Indian Governments focus on utility-scale solar projects and the rise of floating solar power plants are notable trends. Improved panel efficiency and energy storage systems are further boosting market expansion, with projections indicating sustained growth until 2031.

The Indian Governments NSM aims to foster sustainable growth, address energy security challenges, and combat climate change. Various schemes such as Solar Park, VGF, and CPSU have been introduced to encourage solar power generation, facilitating the transition to solar energy.

Integration of battery storage into solar projects offers benefits like increased grid stability, enhanced selfconsumption, and improved renewables integration. This is driving the adoption of clean energy and providing round-the-clock power. Companies can tap into Indias booming solar EPC market by identifying niche markets, analysing competition, offering competitive pricing and financing options, and focussing on customer service. Staying updated on solar technologies and innovating with new business models are also crucial strategies for success in this dynamic market.

(Source: https://www.eprmagazine.com/power-talk/ state-initiatives-and-innovations-propel-the-solar-epc- market/#:~:text=The%20Solar%20EPC%20market%20 in,an%20interview%20with%20EPR%20Magazine.)

Growth Drivers Rapid Urbanisation

Indias urban population is expected to nearly double by 2050, driving up electricity demand and making solar energy an attractive solution.

Abundant Solar Resources

With around 300 sunny days annually, India receives approximately 5,000 trillion kWh of solar radiation each year, offering immense potential for solar energy generation.

Environmental Concerns

The shift to renewable energy sources like solar is driven by the need to reduce carbon emissions and address climate change, leading to increased adoption of solar energy.

Lower Tariffs

Solar tariffs have significantly decreased in recent years due to factors like falling solar panel prices, government policies, and technological advancements. This makes solar power more competitive than thermal power.

Falling Equipment Costs

Solar system prices and PV product costs have declined, making solar energy more affordable and driving market growth.

Rural Electrification

The Power for All initiative and rural electrification programmes aim to provide electricity to all households, industries, and agricultural consumers. This effort stimulates economic development and increasing electricity demand.

Foreign Direct Investment (FDI)

Rising FDI in the renewable sector is expected to drive additional investments in Indias solar energy projects.

Energy Storage

The trend towards energy storage solutions like batteries is growing, enabling the storage of excess solar energy. It is also making solar power a reliable alternative to traditional energy sources.

Make in India Initiative

The initiative aims to boost manufacturing sectors contribution to GDP, driving significant growth in electricity demand and expansion of generation capacity.

Energy Transition

The global shift towards renewable energy sources, driven by climate change concerns, is creating a favourable market environment for solar energy.

Lowest Cost of Production

Solar PV systems remain the most cost-effective energy resource, even after significant price reductions. This is leading to the expansion of solar- plus-storage projects and other innovations.

Government Incentives

Policies and incentives by the Indian Government, such as subsidies, tax incentives, and renewable energy targets, are encouraging the adoption of solar energy.

Energy Access

Solar power offers a scalable and decentralised solution to energy access challenges. This is more so in remote areas, unlocking opportunities for social impact and economic development.

Supportive Government Initiatives

New Solar Power Scheme (for PVTG

Habitations/Villages) under PM JANMAN

The New Solar Power Scheme under the PM JANMAN programme focusses on providing off-grid solar systems to electrify one Lakhs un-electrified households in particularly vulnerable tribal groups (PVTG) areas. This initiative, with an approved outlay of ? 515 Crores, also includes providing solar lighting in 1500 multi-purpose centres in PVTG areas.

Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyaan (PM KUSUM)

PM KUSUM is aimed at adding solar capacity through the installation of small solar power plants, standalone solar powered agriculture pumps, and solarisation of grid-connected agriculture pumps. This scheme ensures energy security for farmers in India, along with honouring Indias commitment to increase the share of installed capacity of electric power from nonfossil-fuel sources to 40% by 2030 as part of Intended Nationally Determined Contributions (INDCs).

PM Surya Ghar: Muft Bijli Yojana

The PM Surya Ghar Muft Bijli Yojana, launched in FY 2024-25, aims to install solar panels in one Crore homes across India, providing free solar electricity and allowing households to sell surplus power to distribution companies. This scheme offers substantive subsidies and concessional bank loans, covering up to 40% of the installation cost.

Roof Top Solar (RTS) Programme

The Grid Connected Rooftop Solar Programme aims to achieve a cumulative installed capacity of 40,000 MW from rooftop solar projects. The current Phase- II scheme is in effect until March 31, 2026.

Solar Parks Programme

This programme facilitates the development of solar projects in a plug-and-play model with a target of 40 GW. As of the end of 2022, 57 solar parks with a cumulative capacity of 39.28 GW have been approved across 13 states. The programme provides centralised infrastructure for solar projects, reducing costs and transmission losses associated with scattered projects. This approach expedites project implementation by providing ready land, transmission lines, water, and other facilities. The scheme has been instrumental in promoting large-scale solar projects and is expected to continue fostering solar energy growth in India up to FY 2025-26.

Solar Cities

At least one city in each state is developed as a solar city, where all electricity needs are met through renewable sources, primarily solar energy.

Foreign Direct Investment (FDI)

Permitting up to 100% FDI under the automatic route is attracting substantial investment into the solar EPC market. This is further enabling the development of large-scale projects and boosting industry growth.

Waiver of ISTS Charges

Exempting ISTS charges for inter-state sales of solar and wind power incentivises project commissioning by June 30, 2025. This measure fosters investor confidence and accelerates activity in the solar EPC sector.

Renewable Purchase Obligation (RPO) Trajectory

Establishing a clear RPO trajectory up to FY 2029-30, encompassing wind, hydro, and other obligations, provides a predictable demand scenario. This encourages the solar EPC market to align its offerings and expansion strategies accordingly.

Green Energy Corridor (GEC) Scheme

Developing new transmission lines and sub-stations under the GEC Scheme is crucial to efficiently evacuate renewable power. This infrastructure enhancement ensures a robust environment for the solar EPC market to flourish.

Electricity (Promoting Renewable Energy through Green Energy Open Access) Rules, 2022

Introducing rules aimed at accelerating the RE programme and ensuring accessible, reliable, sustainable, and green energy for all is essential to drive demand for solar EPC services in both residential and industrial sectors.

National Green Hydrogen Mission

The goal of developing green hydrogen production capacity and associated RE capacity addition is a significant driver for the solar EPC market. This further creates opportunities for integrated renewable energy projects.

Renewable Generation Obligation (RGO)

The obligation for new coal/lignite-based thermal power plants to establish a minimum 40% renewable energy capacity fosters a transition towards cleaner energy sources. This further creates additional demand for solar EPC services.

Transmission System Plan

There is a comprehensive plan for integrating over 500 GW of renewable energy capacity by 2030, including HVDC and AC transmission corridors, offshore wind evacuation, and cost estimates. This ensures the necessary infrastructure for solar EPC projects to thrive and meet ambitious renewable targets.

Bidding Trajectory

A steady issuance of annual bids, with a focussed aim of targeting 40 GW of solar energy capacity each year from FY 2023-24 through FY 2027-28, emphasises on a multi-year dedication to the growth of solar installations.

SEGMENT-WISE REVIEW Open Access

In Q1 of CY 2024, India added over 1.8 GW of solar open access capacity. This is a twofold increase from 909.3 MW in Q4 CY 2023, according to the newly released Mercom India Solar Open Access Market Report for Q1 CY 2024. The Y-o-Y installations increased by 152%.

As of March 2024, Indias cumulative installed solar open access capacity reached 14.3 GW. Karnataka remained the top state for cumulative installations, accounting for nearly 30% of the total. Maharashtra and Tamil Nadu followed, contributing 13% and 11%, respectively. As of March 2024, the pipeline for solar open access projects was 18 GW.

Key Factors Driving Growth

Several factors contributed to the substantial growth in solar open access installations in FY 2024-25:

• Developers benefitted from reduced prices of Chinese solar modules

• Many developers had delayed their module procurements until the end of CY 2023, anticipating lower prices, leading to a surge in project commissions in the first quarter of CY 2024

• Reduced project costs resulted in lower power purchase agreement (PPA) prices, incentivising consumers to adopt solar open access

The continued growth in solar open access capacity highlights Indias commitment to expanding its renewable energy portfolio and reducing dependence on conventional energy sources.

((Source: https://www.mercomindia.com/product/q1- 2024-mercom-india-solar-open-access-market-report)

Roof-Top

India added 367 MW of rooftop solar capacity in Q1 of CY 2024. Cumulative rooftop solar installations reached 10.8 GW as of March 2024.

Many residential consumers postponed adding capacity under the SURYA Gujarat programme, leading to a significant increase in central subsidies for systems between 1 kW and 3 kW. The high volume of applications after the programmes launch caused processing delays and installation setbacks. Additionally, higher prices for modules meeting domestic content requirements (DCR) further impacted capacity additions.

In the recent quarter, 69% of capacity additions came from the capital expenditure (CAPEX) model, with the remaining from the Operational Expenditure or Renewable Energy Service Company (OPEX/RESCO) model. The industrial segment led with 57% of installations, followed by the commercial segment at 28%, residential at 14%, and government at 1.1%.

By March 2024, Indias cumulative installed rooftop solar capacity reached 10.8 GW, with Gujarat, Maharashtra, Rajasthan, Kerala, and Karnataka leading with over 77% of total installations. The average cost of rooftop solar systems fell for the sixth consecutive quarter, decreasing by nearly 22% Y-o-Y.

Policy Changes and Market Growth

The Ministry of Powers Green Energy Open Access Rules, which now allow consumers with a total contracted demand or sanctioned load of 100 kW or above to utilise green energy through open access (down from the previous limit of 1 MW), have been pivotal. This change has opened new opportunities for small businesses seeking renewable energy for sustainability, cost reduction, and meeting investor and buyer demands for greener supply chains.

(Source: https://www.mercomindia.com/product/rooftop- solar-market-report-q1-2024)

Floating Solar Power

India boasts an estimated potential of 280-300 GW in floating solar power. However, only a small fraction of this potential has been realised, withinstallations in states such as Madhya Pradesh, West Bengal, Andhra Pradesh, Kerala, Telangana, Bihar, and Rajasthan.

The modular technology of floating solar can serve mini grids and off-grid power supplies to large-scale projects connected to the electricity grid, accessible by both urban and rural populations.

Currently, the cost of generating floating solar power in India is higher than that of ground-mounted installations due to several factors. The eligibility criteria for floating solar sites are unclear, and the manufacturing capacity for floating solar equipment is limited. Additionally, the standards and certifications required for installation are not comprehensive.

Towards the Future

As costs continue to decline and technological advancements enhance efficiency, a significant increase in floating solar projects is anticipated across India, fostering a greener future for generations to come.

Globally, deploying floating solar panels on existing hydropower reservoirs could meet 50% of the worlds total electricity demand. Recognising this potential, several countries have begun adopting this technology. However, floating solar still has a long way to go. While the global installed capacity of ground-mounted solar exceeds 1,000 GW, floating solar is less than 10 GW.

(Source: https://blogs.worldbank.org/en/energy/en/ blogs/energy/india-unlocking-potential-floating-solar- power.html)

COMPANY OVERVIEW

Waaree Renewable Technologies Limited (WRTL) operates as a subsidiary of Waaree Energies Limited, leading the solar EPC sector.

The Company functions as a renewable clean technology provider, offering financing, construction, ownership, and operation services for solar projects. Headquartered in Mumbai, WRTL operates across various geographies, focussing on long-term investments in the commercial and industrial customer segments. The subsidiary was established to capitalise on the expanding renewable energy market. As part of the Waaree Group, a prominent renewable energy company, WRTL serves individual, industrial, and commercial customers, advocating for energy solutions that reduce carbon emissions. The Company delivers clean energy through the installation of on-site solar projects (both rooftop and ground-mounted) and off-site solar farms (open-access solar plants).

Highlights of FY 2023-24 (Standalone)

• WRTL achieved record revenue growth of 153.81% Y-o-Y with revenue standing at ? 867.36 Crores in FY 2023-24, compared to ? 341.73 Crores in FY 2022-23.

• The Company recorded PAT growth of 150.71% Y-o-Y, reaching ? 148.94 Crores in FY 2023-24, up from ? 59.41 Crores in the previous fiscal year.

• WRTL reported an EBITDA of ? 198.90* Crores for FY 2023-24, reflecting a growth of 161.76% Y-o-Y compared to ? 75.98 Crores in FY 2022-23. *excluding other income

• The Company has an unexecuted order book of 2,191 MWp (as on June 30, 2024) which is scheduled to be executed within the next 9-12 months.

• Bidding pipeline remains robust at 15.5 GW.

• The Company successfully completed a stock split, reducing the face value of its equity shares in the ratio of 1:5 per share. The face value of shares now stands at ? 2/- per share.

• WRTL has successfully executed 704 MW projects and manages a portfolio of over 587+ MW in operations and maintenance (O&M).

Outlook

The Company has over 2,191 MW of projects currently in the planning and execution stages. It leverages its strong financial foundation and disciplined management to execute profitable projects that deliver superior returns. This progress highlights the Companys commitment to advancing environmental sustainability and strengthens its position in Indias expanding renewable energy sector.

FINANCIAL REVIEW

Key Financial Ratios (Standalone)

Particulars	FY 202324	FY 202223	Change (%)	Reason for Deviation
Debt-Equity Ratio (in times)	0.04	0	100	Variance due to borrowings taken in CY.
Return on Capital Employed (in %)	73.56%	72.29%	1.76
Inventory Turnover Ratio (in times)	26.41	17.88	47.67	The variation in the ratio is on account of increase in the volume of EPC Business
Current Ratio (in times)	1.39	1.16	19.92
Net Profit Ratio (in %)	17.17%	17.39%	(1.26)%

Analysis of the Balance Sheet

The return on capital employed (ROCE), a crucial metric indicating the returns generated from each rupee invested in the business, stood at 73.56% in FY 2023-2024, compared to 72.29% in FY 2022-23. This improvement highlights WRTLs effective use of capital to generate profits and deliver shareholder value.

WRTLs net worth experienced substantial growth, increasing by 132.75% from ? 111.43 Crores as of March 31, 2023, to ? 259.36 Crores as on March 31, 2024. This significant rise in net worth reflects the Companys ability to generate profits and retain earnings, bolstering its financial position and enhancing shareholder value.

RISK MANAGEMENT

WRTL recognises that operating in the dynamic solar industry involves navigating various risks to ensure sustained success and growth. The Companys comprehensive risk management framework is designed to identify, assess, and mitigate potential challenges that could impact its operations, financial performance, and strategic objectives.

Risk	Description	Mitigation
Market and Regulatory Risk	Changes in government policies, incentives, and regulations can impact demand for solar projects and affect revenue.	Diversify project portfolio to include residential, commercial, and utility-scale markets; engage with industry associations and government bodies to anticipate and adapt to policy changes.
Technological Risk	Rapid evolution of solar technology could lead to project inefficiencies and higher maintenance costs if outdated technologies are used.	Invest in continuous R&D; establish partnerships with reputable manufacturers to access reliable and advanced components.
Risk	Description	Mitigation
Supply Chain Risk	Delays or disruptions in the supply of solar components can impact project timelines and profitability.	Maintain strong relationships with multiple suppliers; establish contingency plans for alternative sources; implement inventory management practices to ensure an adequate buffer of critical components.
Project Risk	Underestimating project costs and unforeseen construction issues can erode profit margins.	Conduct thorough project feasibility assessments, including detailed cost analysis and risk assessment; implement effective project management practices to monitor progress and control costs.
Quality Risk	Poor construction or installation quality can lead to underperforming systems, warranty claims, and damage to reputation.	Develop and enforce stringent quality assurance and control protocols; invest in training and certifications for the workforce to ensure high- quality installations.
Workforce Risk	Skilled labour shortages can impact project timelines and increase labour costs.	Develop a talent pipeline by partnering with educational institutions and offering apprenticeships or training programmes; cross-train employees to handle multiple roles and maintain workforce flexibility.
Financing Risk	Securing project financing at favourable terms can be challenging, with fluctuations in interest rates impacting project undertaking.	Diversify financing sources, including equity, debt, and partnerships with financial institutions; maintain a strong financial position and build relationships with reliable financiers.
Natural Disasters Risk	Solar installations are vulnerable to extreme weather events, which can damage installations and delay projects.	Conduct thorough site assessments to identify vulnerabilities; design and construct systems with robust mounting structures and weather-resistant components.
Competition Risk	The competitive solar EPC market can lead to pricing pressure and reduced profit margins.	Differentiate by focussing on unique value propositions such as superior customer service, innovative solutions, and specialised expertise; continuously monitor competitors and adjust pricing based on market realities.
Customer Credit Risk	Offering financing options to customers can expose the Company to credit risks if customers fail to meet payment obligations.	Implement a rigorous credit evaluation process for potential customers, including credit checks and payment terms; offer financing through partnerships with reputable financial institutions with established credit assessment mechanisms.

Internal Control Systems and Their Adequacy

The Company has implemented robust internal control systems that cover all aspects of operations, financial reporting, and compliance with laws and regulations. The Management Information System acts as an effective tool for monitoring and maintaining control over various operational parameters. Regular internal audits are conducted to ensure the efficient execution of responsibilities, and the Audit Committee periodically evaluates the adequacy of these internal controls.

Human Resources

WRTL places the highest value on its human capital, recognising it as the cornerstone of the Companys success, as demonstrated by the dedication and competence of its employees. A strong commitment to nurturing, empowering, and retaining staff is realised through comprehensive learning and organisational development initiatives. WRTL acknowledges that its employees play a pivotal role in driving organisational growth and longterm sustainability. Under the Waaree RTL ESOP 2023, the Company has already granted 54050 stock options to eligible employees and plans to continue offering stock options in the future to further motivate employees, enhance retention, and attract top talent. The Company boasts a total employee strength of over 250.

Cautionary Statement

Statements made in the Management Discussion and Analysis Report, describing the Companys outlook, projections, estimates, expectations, and predictions, may be considered forward-looking statements within the meaning of applicable securities laws and regulations. The Companys performance may differ materially from those expressed or implied.

	On behalf of the Board For Waaree Renewable Technologies Limited
	Sd/-	Sd/-
	Pujan Doshi	Hitesh Mehta
Place: Mumbai	(Managing Director)	(Executive Director)
Dated: August 20, 2024	DIN: 07063863	DIN: 00207506
Registered Office 504, Western Edge-I, Off. Western Express Highway Borivali (East), Mumbai - 400 066