Sterling & Wilson Renewable Reports Rs 421 Cr Loss in March Qtr

Renewable engineering, procurement and construction (EPC) solutions provider Sterling and Wilson Renewable Energy has released its financial results for the quarter ended March.  The company clearly continues to ‘clean up’ after Reliance joined as a promoter group, with  consolidated revenue having dipped 92% Y-O-Y, pegged at Rs 421.11 cr. The firm has exited businesses, contracts and more in the past year as it focused harder on India and the solar EPC business over other diversifications. The current unexecuted order book stands at Rs 4913 crores.

The company reported total income of Rs. 86.36 crores during the period ended March 31, 2023 as compared to Rs. 417.65 crores during the period ended December 31, 2022. Compared to the corrsponding quarter last year, the company has reported total income of Rs.86.36 crores during the period ended March 31, 2023 as compared to Rs.1094.47 crores during the period ended March 31, 2022.

The company has posted net profit / (loss) of Rs. -417.45 crores for the period ended March 31, 2023 as against net profit / (loss) of Rs. -101.24 crores for the period ended December 31, 2022.

For the full year, the company has reported total income of Rs.2125.87 crores during the Financial Year ended March 31, 2023 as compared to Rs.5293.64 crores during the Financial Year ended March 31, 2022.
The company has posted net profit / (loss) of Rs.-1169.55 crores for the Financial Year ended March 31, 2023 as against net profit / (loss) of Rs.-909.46 crores for the Financial Year ended March 31, 2022.

The revenue tanked owing to the escalation of cost on some provisions that have been made. This has had a bearing on the percentage-of-completion, leading to revenue reversal in current EPC projects, as per the investor presentation.

Presenting what is meant to be start of a turnaround from the fourth quarter of FY23, S&W Renewable Energy claimed the highest quarterly order inflows since Q1 of FY21.

The company has set sights on achieving debt reduction by the fourth quarter of FY24 with receivables recovery, indemnity inflows, and negative working capital. As of March 31, 2023, its net debt was pegged at Rs 1,967crores.

The O&M profits have also been impacted by projects that saw O&M costs being incurred. The firm added that revenue recognition has not started owing to final handover delay.

Some of the large scale orders that S&W RE won recently include a renewable energy project of NTPC REL of 1500 MW worth Rs 2,100 crore, where it emerged as a successful bidder. It is also awaiting final financing to proceed on its big Nigerian order for 961 MW of solar plants  worth $1.5 billion.

The market is awaiting news on possible large orders from Reliance industries linked to their internal energy requirements, as well as plans for green hydrogen production in the future, where Sterling and Wilson Renewable should be well placed to handle the massive solar projects that will be needed.