In October 2024, two big names—Waaree Energies and Hyundai Motor—hit the Indian stock market with contrasting responses. Waaree Energies, a leading renewable energy firm, entered the market with a strong listing, while Hyundai Motor, well-known in the auto industry, faced a muted response. Here’s a closer look at each company’s market entry, performance, and outlook to help investors make informed decisions.
Waaree Energies IPO: A Robust Entry
Waaree Energies shares opened on October 28 at a significant premium, listed on the BSE at Rs.2,550, a sharp rise of 70% over its issue price of Rs.1,503. This promising listing reflects investor confidence in the renewable energy sector, driven by strong demand for green energy and government incentives.
Since the government is focusing on promoting renewable energy, including solar, Waaree Energies is in a prime position to capitalize on this trend. The company also benefits from the Production-Linked Incentive (PLI) scheme, which encourages local manufacturing and boosts domestic industry. Experts see long-term potential for Waaree, given the growing global and domestic demand for solar solutions.
Hyundai Motor Listing: A Weak Start but Potential Ahead
In contrast, Hyundai Motor’s stock listing was less impressive. Listed a week before Waaree, Hyundai’s shares began at a slight discount, opening at Rs.1,931 against an issue price and then closing lower on October 28 at Rs.1,809, a drop of 1.88%. Despite its strong foothold in the Indian auto market, Hyundai’s stock faced a lukewarm reception, indicating investor caution around the current state of the auto sector.
Auto sales have slowed down slightly, with Hyundai’s sales from April to September showing a 2.6% year-on-year decline. The company has been a reliable performer, but the auto industry’s growth is closely tied to the overall economy, which can make it susceptible to fluctuations.
Market Valuation: A Quick Comparison
Upon listing, Waaree Energies reached a market capitalization of Rs.67,866 crore, whereas Hyundai Motor currently holds a market cap of Rs.1,47,914.98 crore. The higher valuation of Hyundai points to its established presence in the auto sector. However, Waaree’s smaller size relative to Hyundai could be seen as offering greater growth potential, especially if renewable energy trends continue to surge.
Financial Performance and Growth
Waaree Energies has displayed impressive growth in recent years. Between FY22 and FY24, its compound annual growth rate (CAGR) reached nearly 99.8%. The company’s profit grew from Rs.79.6 crore to Rs.1,274.3 crore, showcasing significant expansion.
On the other hand, Hyundai Motor’s financials indicate steady growth. In FY24, Hyundai’s profit reached Rs.6,060 crore, representing a 28.7% increase compared to the previous year. Revenues also rose by 15.8% to Rs.69,829 crore, underlining Hyundai’s strong presence in the automotive sector.
Expert Recommendations
Given Waaree Energies’ premium listing and strong growth projections, experts have mixed opinions on the stock’s outlook. Narendra Solanki, Head of Fundamental Research at Anandrathi, believes that Waaree has strong long-term potential due to its focus on renewable energy. He sees the company benefiting from increasing demand for sustainable solutions and government support for the sector.
However, Prashant Tapse, VP of Research at Mehta Equities, advises caution. He points out that Waaree’s valuation has surged post-listing, which could prompt some investors to book profits in the short term.
For Hyundai, Sagar Shetty, a research analyst at Stoxbox, suggests that investors remain invested for the long term, as the company holds potential for gradual growth. Shivani Nyati of Swastik Investmart concurs, noting that Hyundai is suited for investors willing to hold and wait, as the automotive market may see renewed momentum.
Which Stock is Better for You?
Both Waaree Energies and Hyundai Motor present distinct opportunities for investors, depending on individual goals:
- Long-term growth potential: Waaree Energies is a promising choice for investors interested in the renewable energy sector, particularly those looking for exposure to sustainable energy. The company’s listing and growth rate indicate a strong future, although short-term fluctuations may lead some to consider profit-taking.
- Steady returns in a stable sector: Hyundai Motor may suit conservative investors who prioritize stability in their portfolios. Hyundai’s presence in the auto industry offers a solid foundation, but the company’s performance will be closely linked to economic conditions and the auto sector’s recovery.
Final Insights for Investors
If you’re looking for high-growth potential in an emerging sector, Waaree Energies might be a fit, though it may come with short-term volatility. On the other hand, Hyundai provides a steady investment in the established auto industry, suited for those with a longer time horizon.
