SWSOLAR - Sterling & Wils.

📊 NSE: SWSOLAR 🏢 Engineering - Turnkey Services 📅 Last Updated: 12/14/2025 13:44

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 108% YoY to INR 6,301.86 Cr in FY25. The EPC segment grew 114.7% to INR 6,064 Cr, while the O&M segment grew 12.2% to INR 236.1 Cr. 1H FY26 revenue reached INR 3,510 Cr, up 80% YoY from INR 1,946 Cr.

Geographic Revenue Split

The company has shifted focus primarily to the domestic Indian market, which now constitutes the majority of the INR 9,096 Cr order book. International operations span 25 countries including Africa, USA, Australia, and the Middle East, but domestic EPC projects are the primary growth driver.

Profitability Margins

Gross margins were 10.1% in FY25 but dipped to 8.9% in Q2 FY26. Net profit margin was 1.36% in FY25 (INR 85.55 Cr) compared to -6.94% in FY24. Q2 FY26 reported a PAT loss of INR 478 Cr due to exceptional write-offs.

EBITDA Margin

EBITDA margin was 3.92% (INR 246.73 Cr) in FY25, a significant improvement from -0.74% in FY24. However, Q2 FY26 saw an EBITDA loss of INR 470 Cr due to a one-time INR 580 Cr write-off related to US arbitration.

Capital Expenditure

Not explicitly disclosed in INR Cr, but the company availed a new term loan of INR 700 Cr in FY25 to meet working capital and project requirements for its expanding order book.

Credit Rating & Borrowing

Ratings for working capital and term loans were upgraded to BBB+ with a Stable Outlook in June 2025 by Infomerics. Interest coverage ratio improved to 2.62x in FY25 from 0.29x in FY24.

⚙️ Operational Drivers

Raw Materials

Solar modules represent the most significant cost component for turnkey EPC projects; other materials include steel structures, copper cables, and inverters.

Import Sources

Not specifically detailed by country, but the company manages module price volatility through fixed-price arrangements and customer-borne cost contracts.

Key Suppliers

Not disclosed in available documents; however, the company uses fixed-price arrangements with various global and domestic suppliers to mitigate volatility.

Capacity Expansion

The O&M portfolio grew to 9.1 GW as of September 2025, up from 8.7 GW in March 2025. The company has a total project portfolio of over 22.6 GWp commissioned or under construction.

Raw Material Costs

Raw material costs are highly volatile; module-inclusive turnkey projects led to a gross margin dip from 11.7% in Q1 FY26 to 8.9% in Q2 FY26 as module supply carries lower margins than Balance of System (BoS) work.

Manufacturing Efficiency

Not applicable as the company is an EPC/O&M service provider; efficiency is measured by project execution speed and O&M margins (targeted at 20-23%).

Logistics & Distribution

Not disclosed as a specific percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth will be achieved by focusing on the domestic Indian EPC market, expanding the high-margin O&M portfolio (targeting 20-23% margins), and leveraging the strong parentage of Reliance New Energy Ltd to secure large-scale projects.

Products & Services

Solar EPC services (turnkey and BoS), Operation and Maintenance (O&M) services for solar power plants, and hybrid energy solutions including battery storage.

Brand Portfolio

Sterling and Wilson Renewable Energy (SWREL).

New Products/Services

Expansion into hybrid solar-wind projects and battery energy storage systems (BESS) within the O&M and EPC segments.

Market Expansion

Aggressive expansion in the Indian domestic market with a bid pipeline for FY26 and a focus on third-party O&M contracts.

Market Share & Ranking

Established leader in solar EPC with a 22.6 GWp portfolio; specific market share percentage not disclosed.

Strategic Alliances

Strong linkage with Reliance Group (Reliance New Energy Ltd holds 32.50%) and indemnity agreements with Shapoorji Pallonji Group.

🌍 External Factors

Industry Trends

The industry is shifting toward large-scale domestic tenders and hybrid renewable projects. SWREL is positioning itself by moving away from risky international EPC toward stable domestic BoS and O&M.

Competitive Landscape

Operates in a highly competitive tender-based environment against other global and domestic solar EPC players.

Competitive Moat

Moat is built on strong promoter backing (Reliance Group), a massive 22.6 GWp execution track record, and an indemnity agreement that protects the balance sheet from legacy liabilities exceeding INR 300 Cr.

Macro Economic Sensitivity

Highly sensitive to global solar module price trends and interest rate fluctuations affecting project viability for clients.

Consumer Behavior

Increased demand from public sector and large corporate entities for green energy to meet ESG goals.

Geopolitical Risks

Legal and arbitration risks in international markets, as evidenced by the INR 580 Cr write-off from a US-based subcontractor dispute.

⚖️ Regulatory & Governance

Industry Regulations

Subject to solar import duties (BCD/ALMM) in India and local regulatory standards in 25 operating countries.

Environmental Compliance

Business is inherently ESG-positive as a renewable energy provider; no specific compliance cost in INR disclosed.

Taxation Policy Impact

Not specifically detailed beyond standard corporate tax rates.

Legal Contingencies

Significant legal issues include a US subcontractor arbitration award resulting in an INR 580.1 Cr write-off and an OEG Inc settlement of INR 19.95 Cr. Total contingent liabilities stood at INR 1,054.89 Cr as of March 2024.