Sterling & Wilson Renewable Energy 's subsidiary SWSS has initiated a new arbitration proceeding against OEG Inc to pursue undetermined counterclaims.

Arbitration details

The arbitration was filed by SWSS, a wholly owned step-down subsidiary of Sterling & Wilson Renewable Energy, against OEG Inc. The dispute concerns certain undetermined counterclaims that were reserved in terms of the arbitration order dated March 13, 2025.

A three-member arbitration panel has been constituted under the American Arbitration Association (AAA) rules. This development follows a previous disclosure by the company dated December 20, 2025.

Background

The development reflects an ongoing legal matter between SWSS and OEG Inc. No financial quantum or timeline for resolution has been disclosed in connection with this arbitration filing. The update was issued in accordance with Regulation 30 read with Para B of Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Sterling & Wilson Renewable Energy Limited reported a 36% year-on-year increase in Profit After Tax (PAT) to ₹53 crore for the quarter ended June 30, 2026, driven primarily by lower effective taxation rates. Despite the profit growth, revenue from operations declined by approximately 10% year-on-year to ₹1,590 crore, reflecting slower execution in the international EPC segment. The company achieved its highest-ever Unexecuted Order Value (UOV) of ~₹13,000 crore post-COVID, providing strong visibility for future revenue growth. Management reaffirmed a full-year revenue growth guidance of 10–15%, excluding potential contributions from the Reliance Group partnership.

Financial Performance

The company’s operational EBITDA stood at ₹78 crore with a margin of 4.9%. Reported quarterly EBITDA was higher at ₹96 crore, positively impacted by forex gains. Gross margins for Q1FY27 were around 9.9%, down from 10.5% in FY26. Management expects EPC gross margins to range between 8% and 10% depending on the project mix of turnkey and Balance of System (BoS) contracts. The O&M segment showed robust performance, with top-line growth of 40% year-on-year.

Term debt decreased sequentially by ~₹160 crore due to scheduled repayments, while gross borrowings declined by approximately ₹130 crore. Net working capital improved to negative ₹260 crore from negative ₹329 crore in the previous quarter. The company has secured fresh credit lines exceeding ₹3,200 crore to support growth momentum.

Operational Highlights

The standout development was the award of a letter of intent for the West Minya Solar Power Project in Egypt, valued at approximately USD 560 million. This 1,000 MW-AC solar PV plant, integrated with a 600 MWh battery energy storage system (BESS), will be executed via a 50-50 joint venture with Hassan Allam Construction. National Technical Permit (NTP) is expected in September 2026, with revenue contribution anticipated in the last quarter of FY27.

The domestic EPC market remained sluggish for a second consecutive quarter due to volatile commodity prices and high domestic module costs. However, the bid pipeline remains robust at 27.7 GW, with nearly 90% focused on India. The O&M portfolio expanded to a record 18.3 GW peak capacity, with full contribution expected from Q3FY27 onwards.

What the Numbers Show

The divergence between rising PAT and falling revenue highlights the impact of non-operational factors on profitability. While operational EBITDA margins contracted to 4.9% from higher levels in prior periods, the PAT surge was largely aided by favorable tax rates rather than operational leverage. This suggests that core operating efficiency faced headwinds, likely due to the delayed execution of international projects in South Africa, Spain, and Italy. The significant improvement in net working capital indicates better cash management, but the reliance on forex gains to boost reported EBITDA underscores exposure to currency fluctuations.

Management Outlook

Chandra Kishore Thakur, Global CEO, emphasized that the current UOV comprises six turnkey projects worth ~₹9,000 crore yet to commence execution. He noted that while Q2FY27 might remain slow due to monsoon effects and delayed Letter of Awards (LOA), Q3 and Q4 are expected to see a bright pickup. Ajit Pratap Singh, CFO, stated that the company is well-prepared for the heavy execution targets in H2FY27, including potential large-scale orders from the Reliance Group’s renewable energy hub in Gujarat. The company continues to pursue margin-accretive projects and maintains a negative working capital model to mitigate financial risks.