Sterling & Wilson Renewable Energy Limited disclosed that its step-down subsidiary, Sterling and Wilson Engineering (Pty) Ltd (SWEPL), initiated legal proceedings in South Africa to recover ₹25.50 crore from insurance providers.

The litigation stems from the liquidation of a sub-contractor engaged in the Doornhoek and Zondereinde projects. SWEPL invoked advance, performance, and retention bonds issued by Credit Guarantee Insurance Corporation of Africa Limited and Old Mutual Alternative Risk Transfer Insure Limited, but the insurers failed to honor the claims.

Litigation details

The case was filed before the High Court of South Africa, Gauteng Local Division, Johannesburg. The opposing parties include the two insurers and Lead Engineering and Projects (Pty) Ltd, which is currently in liquidation.

Disclosure timeline

The Notice of Motion was originally filed on August 25, 2026. The company stated that it received notification of the court taking cognizance of the motion on Friday evening, October 16, 2026, which accounted for the delay in making this public disclosure under SEBI regulations.

Sterling & Wilson Renewable Energy reported a significant turnaround in profitability for the second quarter of FY27. The company logged a consolidated net profit of ₹16.82 crore, marking a sharp recovery from a loss of ₹477.62 crore in the corresponding period last year. This performance reflects a major operational shift despite revenue contraction.

The board approved the unaudited financial results on October 15, 2026. For the quarter ended September 30, 2026, the company reported consolidated revenue from operations of ₹1,527.50 crore, down from ₹1,748.60 crore in Q2FY26. While quarterly profit declined from ₹53.27 crore in Q1FY27, the half-year performance remains robust with H1FY27 profit after tax standing at ₹70 crore against a loss of ₹439 crore last year. The audio recording of the investors call discussing these results was made available on October 16, 2026.

Financial Performance Overview

The following table summarizes key consolidated financial metrics for Q2FY27 compared with prior periods:

On a standalone basis, revenue grew 14% YoY to ₹1,456.33 crore, with profit after tax at ₹27.88 crore. The Engineering, Procurement, and Construction (EPC) segment remained the primary revenue driver, contributing ₹1,427.87 crore in consolidated revenue, while Operation and Maintenance (O&M) services generated ₹99.12 crore.

Order Book and Business Momentum

The company’s unexecuted order book grew 34% year-on-year to ₹12,480 crore, providing strong revenue visibility. Sterling & Wilson secured prestigious domestic and international orders totaling over ₹985 crore recently. Key wins include a 534.3 MWp solar project in Rajasthan, two Battery Energy Storage System (BESS) projects in South Africa with a combined capacity of 616 MWh, and the West Minya Solar Power Project in Egypt through a joint venture with Hassan Allam Construction.

The company’s O&M portfolio expanded significantly, growing from 13.5 GW in March 2026 to 18.9 GW as of September 2026. H1FY27 O&M revenue increased 48% YoY to ₹183 crore from ₹124 crore in the corresponding period last year. The total project portfolio stands at over 29.8 GWp across 28 countries.

Segment Dynamics and Debt Reduction

The investor presentation highlights a divergence in segment performance driving the consolidated results. Domestic EPC revenue grew 12.6% YoY to ₹2,768 crore in H1FY27, supported by execution in India. However, International EPC revenue fell sharply to ₹165 crore in H1FY27 from ₹929 crore in H1FY26. This decline is attributed to the completion of older projects while newly awarded orders have yet to commence execution.

On the balance sheet, gross debt decreased by ₹244 crore to ₹920 crore as of September 2026, down from ₹1,164 crore in March 2026, due to scheduled repayments. Net debt remained relatively stable at ₹601 crore compared to ₹589 crore in March 2026. Shareholder equity improved to ₹719 crore from ₹651 crore over the same period.

Balance Sheet and Cash Flow

As of September 30, 2026, consolidated trade receivables increased to ₹2,040.96 crore from ₹1,799.27 crore as of March 31, 2026. Cash and cash equivalents decreased to ₹93.55 crore from ₹314.11 crore over the same period.

Net cash flow from operating activities for the six months ended September 30, 2026, was positive at ₹77.75 crore, a significant improvement from the negative ₹498.71 crore reported in the corresponding period last year. This shift was driven by improved working capital management and the absence of exceptional items that impacted the prior year.

What the Numbers Show

A key observation from the combined data is the impact of timing differences in the International EPC segment. While the total order book surged 34% YoY to ₹12,480 crore, with international orders comprising 44.4% of the unexecuted value, this growth has not yet translated into immediate revenue recognition. International EPC revenue dropped to ₹165 crore in H1FY27 from ₹929 crore in H1FY26, indicating that the new international backlog is awaiting execution commencement, likely in H2FY27.

Additionally, the reduction in gross debt by ₹244 crore alongside a rise in trade receivables suggests the company is prioritizing deleveraging while managing collection cycles. The negative working capital position narrowed slightly to -₹301 crore from -₹329 crore in March 2026, reflecting better working capital efficiency despite the revenue dip.