Waaree Energies shares: Why stock fell 5% today after US ruling; JM cuts target price, 3 things to watch

Shares of Waaree Energies Ltd fell 5 per cent in Monday's trade after US Customs and Border Protection (CBP) found that Waaree Energies evaded tariffs placed on solar cells from Vietnam and Malaysia between 2021 and 2026. Waaree Energies in a filing to stock exchanges characterised the determination as limited to "a narrow subset of certain historical import entries" and stressed it is not a final adjudication, noting its right to seek de novo administrative and subsequent judicial review. 

JM Financial, however, feels that the US CBP saying that Waaree had a "four-year history of reporting the wrong country of origin" does carry reputational weight and may impact significant part of 65-70 per cent of Waaree's total order book of Rs 53,000 crore. he domestic brokefrage maintained 'ADD' on the stock but cut its target price to Rs 3,185 from Rs 3,009.65 earlier. It valued  the stock at 9 times estimated FY28 Ebitda.

Following the development, Waaree Energies shares fell 4.89 per cent to hit a low of Rs 2,862.50 on BSE, with the stock erasing its 2026 gains fully. 

Of Waaree's total order book of Rs 53,000 crore (excluding retail business), 65–70 per cent is tied to overseas long-term contracts to be executed over the next 3-4 years. Waaree has 1.6 GW capacity in US, which is expected to be 4.2 GW in the next 6 months of time, JM Financial said. 

"While company would be manufacturing and delivering in US, some will continue as exports from India (exact share of exports not known). The finding that Waaree had a "four-year history of reporting the wrong country of origin" does carry reputational weight, and the new 271.28% deposit requirement adds near-term cost on the specific entries flagged as non-compliant," JM said.

That said, the downside looks limited as CBP confirmed Waaree had enough non-Chinese-cell production to cover its US shipments, chose not to apply a blanket adverse-inference ruling, and restricted the finding to certain historical entries linked to Vietnam and Malaysia. 

"This is far short of the worst-case scenario where all of Waaree's imports would have been treated as tainted. Key monitorable going forward: (1) the quantum of retroactive duties once liquidation is finalized, (2) outcome of Waaree's de novo administrative/judicial appeal, if any and (3) any spillover effect on the pending 123.04% preliminary AD/CVD determination covering India-origin solar imports," JM said.

While the determination in EAPA case number 8163 applies only to those materials imported by Waaree found to have circumvented tariffs on solar cells from Vietnam and Malaysia, separate, non-circumventing Waaree products are subject to 123.04 per cent tariffs the U.S. Department of Commerce has levied under a preliminary anti-dumping determination on solar imports from India, Indonesia, and Laos.