Sterling & Wilson Renewable Energy Limited (SWREL) has reported a robust performance in the first quarter, with revenue surging 93% year-on-year to INR 1,762.00 crores. The company's strong growth comes despite facing challenges due to cross-border conflicts affecting projects in Rajasthan and Gujarat for 40-45 days during the quarter.

Financial Highlights

The company's gross margins saw improvement, benefiting from softening input costs, particularly module prices. The domestic EPC gross margin stood at 10.8%, while the international EPC gross margin was approximately 12.3%.

Order Book and Pipeline

SWREL's unexecuted order book stood at INR 8,348.00 crores as of June, with 88% comprising domestic Indian projects. The company's bid pipeline has grown significantly to over 30 gigawatts, including 26 gigawatts for India alone. The majority of this domestic pipeline is expected to be awarded before December.

Focus on Battery Energy Storage Systems (BESS)

The company is eyeing opportunities in the growing Battery Energy Storage Systems (BESS) market. Key points include:

• 3 gigawatts of BESS projects are already lined up in India
• Another 12.5 gigawatts is under various stages of tendering
• New government policy mandates 20% battery storage capacity for all new solar tenders
• SWREL expects 10% of revenue streams to come from battery and other storage solutions in the near future

International Expansion and Challenges

SWREL is targeting $250 million to $300 million in international orders this fiscal year, primarily in European and African markets. However, the company faces some challenges in its international operations:

• Procedural delays in the Nigeria project
• Ongoing legal expenses in some international subsidiaries
• Write-offs of around INR 21.00 crores for one international project

Management Commentary

C.K. Thakur, Global CEO of SWREL, stated, "This year is setting up to be a very good year for the domestic solar EPC market from the strong bid pipeline that we are seeing buildup." He also mentioned that the company is well-placed to follow the guidance of 15-20% year-on-year growth in order booking.

Future Outlook

• Maintaining operational EBITDA margin guidance of around 7%
• Expecting 20% growth in order booking year-on-year
• Focusing on strategic third-party O&M contracts in India and overseas
• Anticipating growth in the BESS segment, with EPC costs ranging between INR 2.50 crores to INR 4.00 crores per megawatt

Sterling & Wilson Renewable Energy Limited continues to position itself as a key player in the renewable energy sector, with a strong focus on solar EPC and emerging opportunities in battery storage systems. The company's improved financial performance and growing order pipeline indicate positive momentum for the future, despite some challenges in international markets.

Sterling & Wilson Renewable Energy , a leading player in the renewable energy sector, has announced robust financial results for the first quarter of the fiscal year, showcasing significant growth across key financial metrics.

Impressive Revenue Growth

The company reported a substantial increase in revenue, which grew to ₹1,761.60 crore in Q1, up from ₹915.00 crore in the corresponding quarter of the previous year. This remarkable 92.5% year-over-year growth underscores Sterling & Wilson Renewable Energy's strong market position and increasing demand for its renewable energy solutions.

EBITDA Soars

Sterling & Wilson Renewable Energy's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) witnessed a dramatic rise, reaching ₹85.40 crore, compared to ₹26.40 crore in the same period last year. This represents a significant increase, reflecting the company's improved operational efficiency and cost management.

Enhanced Profitability

The company's profitability saw a significant boost, with the gross profit doubling and margins rising to 11.7%. This expansion in margin indicates the company's ability to generate higher profits from its operations.

Sharp Rise in Net Profit

Sterling & Wilson Renewable Energy's consolidated net profit surged to ₹38.70 crore, up from ₹4.20 crore in the previous year's corresponding quarter, marking a nearly eightfold increase. This substantial growth in net profit demonstrates the company's effective strategy execution and improved bottom-line performance.

Market Implications

The company's impressive Q1 results are likely to be well-received by investors and stakeholders, potentially strengthening confidence in Sterling & Wilson Renewable Energy's growth trajectory and market position in the renewable energy sector.

Despite facing challenges in the domestic market, the company cited improved project execution as a key factor contributing to its strong performance.

As the renewable energy industry continues to expand globally, Sterling & Wilson Renewable Energy's strong financial performance positions it favorably to capitalize on emerging opportunities and drive sustainable growth in the coming quarters.

Financial Summary

Note: The financial results discussed in this article are based on the consolidated financial results for the quarter ended June 30, as reported by the company.