Sterling and Wilson Renewable Q1 Results- Losses Up To Rs 353 crores

Leading Solar EPC Sterling And Wilson Renewable Energy Limited has (SWREL) reported its financial results for the period ended June 30, 2022, or Q1 for the firm. The quarter also marked the completion of one year with Amit Jain as CEO at the firm.

In the June quarter, the company has reported an over 10% QoQ growth in total income at Rs. 1211.06 crores  as compared to Rs. 1094.47 crores during the period ended March 31, 2022.

SWREL’s loss for the period came in at Rs.353.91 crores for the period ended June 30, 2022 as against net profit / (loss) of Rs. -126.30 crores for the period ended March 31, 2022.

On a year on year comparison, the company has reported flat numbers at a total income of Rs. 1211.06 crores during the period ended June 30, 2022 as compared to Rs.1227.20 crores during the period ended June 30, 2021.

The loss of Rs.353.91 crores for the period ended June 30, 2022 is also 3.5x the loss of Rs.76.12 crores for the period ended June 30, 2021.

The poor numbers for Q1 from SWREL reflect the clean up that has been in progress for the past 3 quarters at the firm, including post the entry of the Reliance group as promoter group, a transaction that was completed during the March Q4 quarter this year. Key moves have included the firm moving out of the waste to energy projects business where it had a big UK project in hand, besides multiple overseas projects that were no longer viable due to the rise in input costs. Since then, the firm has sought to move to a more flexible pricing structure to account for volatility in new projects. A significant part of the international project pipeline is still open due to the uncertainty seen in solar prices for the past few months globally and other supply side issues.

Even the higher margin O&M business saw shrinkage as some large projects managed by the firm were sold to buyers who had their own O&M teams. However, the firm has committed to remain focused on the O&M business.

Going ahead, with most of the past losses almost cleaned up it seems, we see SWREL pushing harder once again in international markets, besides the expanded solar opportunity in India. Some large internal projects for the Reliance group itself cannot be ruled out soon, considering the significant commitments Reliance has made on its own net zero transition, a significant part of which includes sourcing higher renewable energy.

The firm has a storage and solar pipeline both, with the latter at much lower levels as compared to the previous year, thanks to the disruptions highlighted above.