Waaree Technologies Limited is the energy storage division of the Waaree Group. It is the lesser discussed brother of the widely-famed “Waaree Renewable Technologies Ltd. (WRTL)”. The company was initially known as HK International Limited and got associated with Waaree Group in 2019 when it was subsequently renamed.
Waaree Group lays strong focus on renewable energy and storage of this energy. WTL as mentioned above deals with the storage of the energy generated.
Why is energy storage necessary?
Sources of energy like solar and wind don’t provide constant energy. They are intermittent. During peak hours – like say when it is windy or sunny, they provide a greater supply of energy while when it is non-peak hour, the supply might not be sufficient. So it is important to store the energy generated during peak hours so it can make up for the times in which it lags.
During peak demand hours, stored energy prevents blackouts, especially to critical infrastructure like data center and hospitals.
Stored energy also regulates power and voltage disseminated from the grid.
At the same time, it helps in EV adoption. Widespread EV charging will definitely put a strain on the grid. But with energy stored, the grid does not have to break a sweat to provide the required power as it is already taken care of by the stored energy.
How does WTL store energy?
WTL stores energy in Lithium-ion batteries.
When these batteries are charged, the ions move from the positive electrode to the negative electrode, creating potential difference. When the charging stops, the ions move back to maintain equilibrium and this movement of ions back from the negative electrode to the positive electrode generates electricity.
What is the business model of the company?
WTL as explained above primarily deals in Lithium-ion batteries, these batteries find widespread applications across various industries:
- Providing power for two-wheeler and three-wheeler electric vehicles and potentially larger vehicles in the future.
- Storing energy from renewable sources.
- Data Centers
- Telecom Equipment which has to be operational 24*7 etc.
Is the energy storage industry poised for growth?
The energy storage industry is poised for significant growth in the times to come.
- MarketsandMarkets: Projects a CAGR of 14.2% from 2023 to 2032.
- The Brainy Insights: Predicts a CAGR of 17.55% from 2023 to 2032.
- AZoM: Estimates a CAGR of around 20.3% from 2024 to 2030.
- Grand View Research: Forecasts a CAGR of 20.3% from 2024 to 2030.
These are staggering expected growth numbers and the company is expected to make the most out of this mammoth demand. Being a part of the Waaree conglomerate, it should ideally have a smooth road to profitability.
Should you invest?
It is not safe to take an outsized bet on this stock at this point of time, when it is yet to display any signs of profitability. Aggressive investors can do their own due diligence and park a small part of their portfolio in this stock for the long term, if you believe the story is playing out as expected.
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