1. At a Glance
Sterling & Wilson Renewable Energy Ltd (SWSOLAR) once flirted with bankruptcy. Now? It’s dating Mukesh Ambani. After years of losses and balance sheet fire drills, the company is swinging back with a ₹39 Cr PAT in Q1FY26, a 680% YoY rise. Reliance holds the leash—and maybe, the solar future.
2. Introduction with Hook
Imagine a failed student suddenly landing a Tesla internship. That’s Sterling & Wilson. Once known for delayed projects, debt overload, and -60% OPMs, the company is now putting up green numbers—literally and financially—under the blazing halo of Reliance New Energy.
- Q1 FY26 PAT: ₹39 Cr (YoY up 680%)
- Sales Growth TTM: +108%
- ROCE: 16%, OPM finally back in green
- Market Cap: ₹7,824 Cr, P/E: 71.9 (but LOL-worthy due to base effect)
From solar villain to climate comeback kid?
3. Business Model (WTF Do They Even Do?)
SWSOLAR is not a solar product company. They’re the guys who build and manage solar parks for others.
- Core biz: Solar EPC (Engineering, Procurement, and Construction)
- Side gig: O&M services for already built projects
- Geography: India + Global (Middle East, Africa, Australia)
- Clients: Governments, PSUs, corporates, and private utility companies
- Reliance angle: Strategic alignment with future giga solar parks
Think of them as the “L&T of Solar” minus the balance sheet discipline. Well, that’s changing.
4. Financials Overview
| Metric (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 2,015 | 3,035 | 6,302 |
| Net Profit | -1,175 | -211 | 86 |
| OPM % | -56% | -0% | 4% |
| ROE | -65% | -9% | 8% |
| EPS | -61.65 | -9.09 | 3.49 |
Yo, that’s a Lazarus chart. From flaming -₹1,175 Cr loss to black ink in two years? Epic.
5. Valuation
Let’s not get too excited—this is a turnaround story with debt still lurking.
Method 1: P/E-Based Valuation
- EPS (FY25): ₹4.68
- Fair P/E: 25–40 (Turnaround + Green energy premium)
- FV Range = ₹117 – ₹187
Method 2: P/S Based (Since profits are volatile)
- Sales TTM: ₹7,148 Cr
- Sector P/S: 1.5x – 2.0x
- FV Range = ₹250 – ₹350
EduInvesting FV Range: ₹230 – ₹350
At CMP ₹335, it’s already pricing in the comeback. Anything beyond this needs consistent profit delivery.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26: ₹1,762 Cr revenue, ₹39 Cr PAT.
- Order book healthy: Strong pipeline in Middle East + India
- Indemnity agreement: ₹300 Cr of past liabilities covered (Shapoorji hangover fading)
- Reliance New Energy stake: Now 32.5%
- Triggers:
- Reliance green energy push = more EPC work
- Debt restructuring = lower interest burden
- Policy push for solar = tailwind
Also, let’s not forget that… Promoter pledging has dropped, public holding is rising, and interest costs are coming down.
7. Balance Sheet
| Item (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 19 | 23 | 23 |
| Reserves | -244 | 946 | 984 |
| Borrowings | 2,030 | 516 | 936 |
| Total Liabilities | 3,190 | 4,301 | 5,630 |
| Total Assets | 3,190 | 4,301 | 5,630 |
Highlights:
- Massive turnaround in reserves
- Debt reduced in FY24, slightly up again in FY25
- Overall, capital structure stabilizing
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash Flow |
|---|---|---|---|---|
| FY23 | -1,829 | -12 | 1,431 | -410 |
| FY24 | 538 | -5 | -286 | 248 |
| FY25 | 38 | -75 | 317 | 280 |
Takeaway:
- Cash burn phase is ending
- Positive cash flow in FY25—finally
- CFO still needs to sustain for another 2–3 quarters to inspire confidence
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | -65% | -9% | 8% |
| ROCE | -65% | 4% | 16% |
| OPM | -56% | -0% | 4% |
| Debtor Days | 143 | 100 | 73 |
| Working Capital Days | 271 | 117 | 47 |
Verdict:
CFO, ROCE, debtor cycle—all improving. This is the financial equivalent of a blood pressure stabilizing after a triple bypass.
10. P&L Breakdown – Show Me the Money
| Metric (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 2,015 | 3,035 | 6,302 |
| Operating Profit | -1,124 | -7 | 247 |
| Net Profit | -1,175 | -211 | 86 |
| OPM % | -56% | -0% | 4% |
| EPS | -61.65 | -9.09 | 3.49 |
This is not about what they made. It’s about how they stopped burning cash and finally charged some profit on their solar panels.
11. Peer Comparison
| Company | CMP (₹) | P/E | ROE | OPM % | Mcap (₹ Cr) |
|---|---|---|---|---|---|
| L&T | 3,474 | 31.4 | 16.55% | 13.43 | 4,78,086 |
| KEC Intl | 879 | 41.0 | 12.09% | 6.88 | 23,415 |
| Kalpataru | 1,190 | 36.2 | 9.64% | 9.10 | 20,325 |
| SWSOLAR | 335 | 71.9 | 8.24% | 4.30 | 7,824 |
Reality check: Still expensive on P/E but attractive on turnaround and EV/Sales.
12. Miscellaneous – Shareholding, Promoters
| Quarter | Promoters | FIIs | DIIs | Public |
|---|---|---|---|---|
| Jun 2022 | 78.56% | 2.05% | 3.38% | 16.00% |
| Mar 2025 | 45.74% | 8.43% | 7.50% | 38.33% |
- Promoter reduction: Reliance acquiring stake while Shapoorji exiting
- Public float increase: Confidence or exit liquidity? TBD.
- Pledge: 27.6% promoter holding still pledged. Yellow flag, not red.
13. EduInvesting Verdict™
Sterling & Wilson is like that reality show contestant everyone wrote off in Episode 1—until they started winning all immunity challenges.
From a -₹1,175 Cr bloodbath to ₹86 Cr net profit. From 143 debtor days to 73. From Shapoorji’s dumpster to Mukesh’s Giga plans.
But… this isn’t a free lunch. The stock is up 50%+ in 6 months, P/E is absurd, and the OPM is still fragile. Debt remains. One or two bad quarters, and the sentiment solar-eclipses again.
If the sun keeps shining—Sterling might just become Reliance’s first renewable blockbuster.
Metadata
– Written by EduInvesting Analyst | 18 July 2025
– Tags: Sterling & Wilson, Solar EPC, Turnaround Stocks, Reliance Green Energy, Renewable Power, Q1FY26
