Energy Stocks: Waaree Energies and Premier Energies share prices nosedived on Friday, May 23rd, after US President Donald Trump's 'one big, beautiful tax' bill was narrowly passed. The trend in renewable energy shares nosedived on Wall Street, and a similar performance is seen in Indian stocks as well.
Renewable Energy Stocks:
Overnight, largest renewable energy stocks like Sunrun nosedived by 37%, followed by 20.5% decline in SunPower. The largest renewable energy company is Nextera Energy with m-cap of nearly $138 billion, and this stock plunged by 6.4%. XPLR Infrastructure, Brookfield Renewable and First Solar stocks also tumbled by 4-5%.
Other energy stocks in the world crumbled too. For instance, Israel-based Solar Edge stock dropped by 25%, while South Korea's Hanwha Solutions dipped 11.4%. Canada-based Canadian Solar also plummeted by 6.5%. Other Israeli energy stocks like Energix Renewable Energies, Zephyrus Wing Energies and Enlight Renewable Energy dropped 5.5% to 7%.
On Indian stock exchanges, Waaree Energies dropped by at least 11% to hit an intraday low of Rs 2,790.30 apiece. Also, Premier Energies' share price declined by 6.2% to hit an intraday low of Rs 1017.55 apiece.
These stocks are bearish trend after the new tax bill of Donald Trump was passed in the US House of Representatives with 215-214 margin.
Also, the bill revoked grants that are intended for cutting air pollution, and greenhouse gas emissions or purchase electric heavy-duty vehicles. Additionally, the bill has abolished a 30% federal tax credit for taxpayers, installing solar rooftop systems.
"The House bill comes to more than 1,100 pages, but there are key items that will be of note to investors, including a continuation of 2017 tax cuts, higher estate-tax exemptions, tax breaks for tips, tax-advantaged accounts for children under 8, and an increase in state and local tax deductions," Vikram Kasat, Head - Advisory, PL Capital said.
National Electrical Contractors Association CEO David Long said, "These provisions recognize the real-world needs of the electrical construction industry. Whether it's power generation, grid modernization, cutting-edge data centre projects, or clean energy installations, electrical contractors are at the forefront of America's infrastructure evolution. This legislation gives our contractors the certainty they need to plan, invest, and grow," reported the White House.
"By preserving competitive tax policies, beginning to reverse the 'methane fee,' opening lease sales and advancing important progress on permitting, this historic legislation is a win for our nation's energy future. We look forward to working with the Senate to strengthen pro-investment provisions and keep America at the forefront of energy innovation," American Petroleum Institute President and CEO Mike Sommers said.
So Why Renewable Energy Stocks Are Falling?
The bill aims at eliminating funding that some of these companies received during the Biden Administration's Inflation Reduction Act. Waaree and Premier Energies have exposure to this market, and their order book is expected to be impacted.
Prior to tax bill, in its latest conference call, Vinay Rustagi, the Director Of Premier Energies said, "From a company point of view that is something which is more conducive to us more attractive for our business. So, we are deliberately keeping more of a focus on the domestic market, but as and when the market evolves and the US market grows and the pricing is more attractive, we will be ready to effectively tap into that market and supply more volume there."
On the tariff impact, Rustagi said during the conference on May 22nd, "I think what is missing is a long-term predictability of the tariff regime, right? So I think the problem is that these changes have been coming so thick and fast that everybody is kind of really sitting back a little bit and just trying to make sure they understand the market landscape. Of course, there is also a trade treaty with the US in under negotiation. So I think both from the customer side in the US, as well as the supplier side for us, I think it is better to wait a little bit before we fully understand the market landscape and start discussing order book."
By the end of Q4FY25, Premier Energies' order book stood at 5.3 GW worth of Rs 8,400 crore. From the total, 73% is dedicated to modules, 27% to cells, and a small portion to EPC.
Meanwhile, Waaree Energies has an order book worth Rs 27,265 crore. Also, the company's board recently approved establishment of an additional 1.6 GW module manufacturing line at the company's facility in Brookshire, Texas, USA. Its 1.6 GW module manufacturing facility is operational in Brookshire, Texas, USA, reinforcing its commitment to the US market.
Amit Paithankar, Whole Time Director & CEO, Waaree Energies revealed that the company aims to achieve EBITDA of Rs 5,500 crore to Rs 6,000 crore in FY26.
Click it and Unblock the Notifications
Sign in with Google