Sterling & Wilson Renewable Energy

Sterling & Wilson Renewable Energy Ltd – Q3 Result January 2025

Value Picks Best Shares for long term investment

sterlingandwilsonre.com BSE: 542760 NSE: SWSOLAR

Key Metrics

Market Cap:

₹7,906 Cr.

Current Price:

₹339

52W High/Low:

₹828 / ₹338

Stock P/E:

288

Book Value:

₹41.4

Dividend Yield:

0.00%

ROCE:

3.77%

ROE:

-56.7%

Financial Highlights

Debt: ₹907 Cr.

Reserves: ₹942 Cr.

Sales Growth (YoY): 155%

Profit Growth (YoY): 104%

Investment Thesis

Sterling & Wilson Renewable Energy Ltd (SWREL) is a global leader in solar EPC (Engineering, Procurement, and Construction) services, with significant operations across India and globally. Despite weak financial performance, including a negative ROE and high valuation multiples, SWREL is backed by a robust order pipeline, strong industry tailwinds, and operational improvements. These factors position it as a speculative growth investment in the renewable energy sector.

Future Growth Drivers

Strong Order Book

Unexecuted order value of ₹10,167 Cr as of December 2024
26% increase compared to March 2024
Recent domestic orders:
- BOS package (625 MW DC) in Gujarat
- BOS project (396 MW DC) in Rajasthan

Product Diversification

Portfolio expansion into hybrid energy
Energy storage projects
Floating solar initiatives
Waste-to-energy projects
Focus on solar-plus-storage solutions

Geographic Reach

Operational presence in 28 countries
Active projects in 20 countries
Key international markets:
- South Africa
- MENA Region
- Southeast Asia

Sectoral Tailwinds

India’s ambitious renewable energy goals driving market demand
Accelerating global adoption of green energy technologies
Strategic alignment with government renewable energy initiatives
Favorable policy landscape supporting solar energy adoption

Competitive Landscape

Domestic Competitors

Tata Power Solar
Adani Renewable Energy

Global Competitors

First Solar
JinkoSolar
Trina Solar

Risks and Considerations

Financial Risks

Negative ROE of -56.7%
Low ROCE at 3.77%
High receivables (₹2,422 Cr)
Potential liquidity challenges

Operational Risks

Legacy international project impacts
Seasonal and cyclical order inflows
Dependence on government policies
Foreign exchange fluctuation risks

Valuation and Investment Outlook

Valuation Metrics

Current P/E Ratio: 288
Intrinsic Value Range: ₹375-₹400/share
Basis: Forward earnings projection
Estimated execution ramp-up potential

Investment Recommendations

Suitable for high-risk investors
Long-term investment horizon recommended
Speculative growth opportunity
Potential in renewable energy sector transition

Green Energy Disruptor: Sterling & Wilson’s Renewable Revolution – Future of Solar Infrastructure Unveiled