Sterling & Wilson Renewable Energy Ltd Q2 FY26 – Reliance’s Solar Rescue Mission Meets Global Audit Nightmare: ₹7 867 Cr Sales, ₹204 Cr Profit, ₹637 Cr Write-Off
1 – At a Glance – “Sunlight with a Side of Losses”
Once upon a solar panel, Sterling & Wilson Renewable Energy Ltd was the shining jewel of the Shapoorji Pallonji empire. Then the balance sheet caught sunburn. Reliance Industries stepped in (because Mukesh Bhai collects distressed assets the way others collect NFTs).
One exceptional item later, the company reminded everyone that “exceptional” doesn’t always mean good.
2 – Introduction – Audit of a Comeback
Let’s call this case “The Return of the Burnt Balance Sheet.” After years of overseas misadventures and delayed payments, Sterling & Wilson finally seemed to stabilise—until a fat arbitration loss turned the quarter into a Netflix special titled How to Lose ₹500 Crore in 90 Days.
Reliance New Energy bought a 40 % stake in 2022, trimmed it to 32.5 %, and now basically runs the show. Under its solar-suit, SWREL is a global EPC contractor pretending to be asset-light while carrying emotional baggage from twenty countries.
Margins finally touched 4 % in FY25—after –56 % in FY23. Progress! But profitability remains allergic to sunlight.
3 – Business Model – WTF Do They Even Do?
They’re the solar plumbers of the world — designing, procuring, constructing, and maintaining megawatt-scale projects. Two main gigs:
1️ EPC (96 % of FY25 revenue): Concept-to-commissioning for utility-scale, rooftop, floating, hybrid & storage solar. • Domestic 80 % (boom!) • International 16 % (shrinking, thankfully). Asset-light = assets belong to clients, losses belong to shareholders.
2️ O&M (4 %): They babysit 8.7 GWp of solar plants globally — reliable recurring income with recurring audits.
Now flirting with battery energy storage (BESS) and wind EPC, because nothing says diversification like adding another loss-making segment.
4 – Financials Overview
Source table
Metric
Latest Qtr (Q2 FY26)
YoY Qtr (Q2 FY25)
Prev Qtr (Q1 FY26)
YoY %
QoQ %
Revenue (₹ Cr)
1 749
1 030
1 762
+70 %
–1 %
EBITDA (₹ Cr)
4
18
85
–78 %
–95 %
PAT (₹ Cr)
–478
9
39
n/m
n/m
EPS (₹)
–20.3
0.30
1.37
n/m
n/m
Without the write-off, profit ≈ ₹150 Cr; with it, auditors ran for SPF 50.
5 – Valuation Discussion – Fair Value Range (educational only)
A | P/E method Annual EPS ≈ ₹8 (normalised). Industry avg ≈ 22× → Fair ₹175–₹225.
B | EV/EBITDA FY25 EBITDA ₹293 Cr; EV ₹6 073 Cr → 20.7×. At industry 10–12× → EV ₹2 930–₹3 500 Cr → ₹140–₹170 per share.
