Sterling & Wilson Renewable Q4- Profit Jumps To Rs 55 Crores, Topline Grows 103%

Strong show by Sterling and Wilson Renewable In Fy25

Reliance backed Sterling and Wilson Renewable Energy Ltd (SWREL) continued on its strong comeback in FY 25 as net profit for the quarter rose to Rs 55 crores, versus just Rs 1.40 crores last year. Income during the quarter rose to Rs 2,506.45 crore from Rs 1,211.40 crore in the same period a year ago.

Expenses rose to Rs 2,419.73 crore as against Rs 1,177.66 crore in the fourth quarter last fiscal.
The firm, which had reported a loss of Rs 210.79 crore in FY24 due to cancellations, litigations and other issues, seems to have made a complete turnround from its troubles, even as the issue of recoveries from erstwhile promoters, the Shapoorji Pallonji Group and others, remains, despite the indemnity from them on covering for losses on pending issues.

Total income rose to Rs 6,341.46 crore in the full fiscal FY25, up from Rs 3,120.79 crore a year ago. An over 100% jump.

On a sequential basis, Q4 numbers were higher by Q3 by over 36%, as the firm had done Rs 1842 crores in Q3. Profits in Q4 rose by over  220%, as the firm had clocked just over RS 17 crores in profits in Q3.

The rising numbers indicate the scale of the turnaround for the firm, but many will see a tempering of growth from here on, unless the firm cracks some large deals .

An overhang over the firm’s financials continue to be the status of almost Rs 500 crores of bank guarantees that the management claims have been wrongfully invoked by a customer in the US, and in Australia. It remains confident of recovering these amounts on the basis of its belief that it has been invoked wrongfully.

Similarly, the auditors have pointed to the Indemnity Agreement dated December 29, 2021, entered into by the Parent Company with Shapoorji Pallonji and Company Private Limited, Khurshed Yazdi Daruvala (jointly the “Promoter Selling Shareholders”) and Reliance New Energy Limited (formerly known as Reliance New Energy Solar Limited) pursuant to which, the Promoter Selling Shareholders would indemnify and re-imburse the Parent Company and its subsidiaries / branches for a net amount, on settlement of liquidated damages pertaining to certain identified past and existing projects (as on the date of signing the aforementioned agreement), old receivables, direct and indirect tax litigations as well as certain legal and regulatory matters, if such claims (net of receivables) exceeds Rs. 300.00 crores. Consequently, trade receivables from the customer undergoing a resolution process under the supervision of the National Company Law Tribunal (‘NCLT’) besides the bank guarantees mentioned above would also be recoverable from the Promoter Selling Shareholders once crystallized, if not recovered from the customers. Since all future crystallized claims beyond Rs. 300.00 crores will be fully charged back and recovered from the Promoter Selling Shareholders, there will be no further impact on the results of the Parent Company and its subsidiaries.

While that clears up the air somewhat as far as future operations go, it will certainly help to close the chapter on these dispites once and for all as per the agreement.