Within a span of less than six months, shares of Sterling & Wilson Renewable Energy have surged by 114%, rising from ₹263.85 per share to the current value of ₹566.
Strong parentageSterling & Wilson Renewable Energy is a leading global provider of end-to-end solar engineering, procurement, and construction (EPC) solutions, specialising in utility-scale solar power projects.
Notably, its strategic partnership with Reliance Industries, which acquired a 40% stake during FY 2021–22, positions it well to advance Reliance's renewable energy vision.
Leveraging its engineering prowess, extensive domain knowledge, global footprint, and track record of executing complex projects worldwide, Sterling & Wilson Renewable Energy plays a pivotal role in Reliance's solar value chain.
India's solar energy landscape has also experienced significant growth, expanding from 3.7 GW in 2015 to approximately 81 GW in FY2024.
Within a span of less than six months, shares of Sterling & Wilson Renewable Energy have surged by 114%, rising from ₹263.85 per share to the current value of ₹566. This notable increase in the stock's value can be attributed to a robust improvement in its financial performance and successful order acquisitions.
From its April 2020 low of ₹69.75 apiece, the stock is currently trading 705% higher than that level.
The company released its financial performance for the March-ending quarter and the full fiscal year of FY24 on Sunday.
The company witnessed a strong recovery in financial performance in the March quarter (Q4FY24) with a net profit of ₹1.40 crore on account of increased income.
This contrasts with a net loss of ₹421.11 crore reported in the January-March period of the preceding financial year 2022–23, according to the company's exchange filing.
During the fourth quarter of FY24, the company's total income surged to ₹1,211.40 crore from ₹86.36 crore in the previous year.
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The company reported a narrowing of its net loss for the entire FY24 to ₹210.79 crore from ₹1,174.96 crore in FY23. On the EBITDA front, it turned positive at ₹54 crore in FY24, driven by robust growth in the domestic EPC business.
The income rose to ₹3,120.79 crore in FY24 from ₹2,125.87 crore in the preceding fiscal.
In FY24, the company made significant strides in deleveraging its balance sheet, with total net debt reduced to ₹116 crore from ₹1,966 crore in FY23. Moreover, there are no upcoming debt repayments until the third quarter of FY25, as per the company.
"There was a strong rebound in financials both sequentially and YoY, with the significant strengthening of the FY24 balance sheet and a net debt reduction of over 90% that well positions the company to secure a larger portion of industry growth. The company attained substantial growth of 64% in its unexecuted order value in FY24, reiterating trust from its clients and the market," the company said.
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As per the company's investor presentation, the unexecuted order value stood at ₹8,084 crore as of March 2024, compared to ₹4,913 crore in March 2023. In FY24, the company received total orders/LOIs for 13 projects worth ₹6,023 crore, marking an increase from the new order inflow of ₹4,387 crore in FY23.
Strong parentage
Sterling & Wilson Renewable Energy is a leading global provider of end-to-end solar engineering, procurement, and construction (EPC) solutions, specialising in utility-scale solar power projects. The company manages all phases of project execution, from design and engineering to commissioning.
Additionally, it offers operations and maintenance (O&M) services, extending its expertise to projects constructed by third parties. Notably, its strategic partnership with Reliance Industries, which acquired a 40% stake during FY 2021–22, positions it well to advance Reliance's renewable energy vision.
Leveraging its engineering prowess, extensive domain knowledge, global footprint, and track record of executing complex projects worldwide, Sterling & Wilson Renewable Energy plays a pivotal role in Reliance's solar value chain.
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As the global solar installed capacity is projected to reach 2.2 terawatts by 2030, the solar O&M sector anticipates rapid growth, with Wood Mackenzie estimating a market opportunity of US$15 billion by 2030, nearly quadrupling 2020 figures.
India's solar energy landscape has also experienced significant growth, expanding from 3.7 GW in 2015 to approximately 81 GW in FY2024. This surge has led to the emergence of a distinct domestic solar O&M market, presenting lucrative opportunities as more solar plants stabilise and require ongoing maintenance.
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As the industry witnesses an uptick in re-tendering of O&M contracts, Sterling & Wilson Renewable Energy is poised to capitalise on this growing market, supported by its global presence, strong customer and lender relationships, and established track record in project execution.
Disclaimer: We advise investors to check with certified experts before taking any investment decisions.
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