Sterling and Wilson RE | Welcome to FromThe

Sterling and Wilson RE | Welcome to FromThe_Notebook community

As part of my 100-Day Research & Analysis Challenge under NISM (Research Analyst), I chose to deep-dive into the Renewable Energy sector, with Sterling and Wilson RE . as my Fourth Company Study.

This note focuses on:

•Business fundamentals

•Financial performance

•Stock price behaviour

•The company was earlier a part of the Shapoorji Pallonji Group.

•Sterling and Wilson Solar Ltd is one of the leading end-to-end solar engineering, procurement and construction (EPC) solutions provider globally and is also engaged in the operation and maintenance (O&M) of solar power projects.

Company Overview:

Reliance Industries acquired a 40% stake in the Company through its subsidiary Reliance New Energy Limited, Providing:

•Utility-scale solar.

•Rooftop, floating solar.

•Hybrid and energy storage solutions.

•The company has entered the battery energy storage solutions (BESS) and wind EPC sectors.

Notable clients include:

The company has offices in 28 countries with projects in 20 countries as of March 2025.

NTPC, Sembcorp, Engie, Cleantech Solar, Serentica, Amplus Solar, Brookfield, Aditya Birla, JSW, Amea Power, etc.

Financial Performance:

Revenue Growth (Positive Signal)

The company generates a gross margin of about 10% on domestic business.

reporting about an 8% gross margin in FY25, a significant improvement from 7% in FY24 and a -50% in FY23.

Share Price Performance:

Despite positive revenue growth, the stock has not performed good and stayed where it was last year.

Stock corrected from levels above 820₹ to around 185₹ for last 3 years.

This divergence between financial growth and stock price raises an important concern.

Why Is the Share Price Falling?(Cons)

~Stock is trading at 9.19 times its book value.

~The company has delivered a poor sales growth of 2.48% over past five years.

~Company has a low return on equity of -76.2% over last 3 years.

~Promoters have pledged 27.6% of their holding.

~Promoter holding has decreased over last 3 years: -27.0%

Key Learnings from This Analysis-

~Revenue growth alone is not enough.

~Cash flow quality and margins matter more than topline numbers.

~Renewable Energy is a structural story with cyclical earnings.

~Valuation resets are common when expectations overshoot reality.

Conclusion-

The renewable energy opportunity remains intact, but:

In execution-driven businesses, sustainable profitability and cash flow discipline decide long-term shareholder returns.

Still:

The company targets 15%-20% revenue growth in FY26.

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