Detailed Narrative
Robust Operational Performance and Order Inflows
Sterling & Wilson Renewable Energy Limited achieved its highest ever Q3 top-line performance since listing, with revenues reaching INR2,092 crores. For the nine-month period, revenue grew 48% year-on-year to INR5,602 crores. The company secured INR3,086 crores of new orders in Q3 from four project wins, contributing to a total of INR6,929 crores in new orders for the fiscal year to date. This strong performance led management to increase its FY26 order inflow guidance to over INR11,000 crores, representing more than 60% year-on-year growth.
Strategic Partnerships and International Expansion
A key highlight of the quarter was the securing of a gigawatt-scale order from Adani Green for INR1,381 crores, coupled with a multiyear strategic partnership framework agreement. This partnership is expected to provide consistent annual orders of at least one gigawatt. Internationally, the company made strong inroads in South Africa, securing a 240-megawatt turnkey project worth USD147 million, marking its fourth project in the region. Management emphasized that international projects are now undertaken with terms that align with their risk appetite and profitability.
Healthy Order Book and Future Pipeline
The unexecuted order book stands at over INR10,000 crores as of December 31, 2025, providing healthy revenue visibility. Approximately 75% of this order book comprises domestic Indian projects. The company also has an additional INR4,000 crores of orders in the final stage of negotiations, which are expected to close in Q4 FY26. Management highlighted a robust bidding pipeline of 6-7 gigawatts in India alone for the current quarter, with the overall market pipeline expected to surpass 30 gigawatts in FY27, driven by multiyear capacity rollouts.
Profitability and One-off Impacts
Gross margin for Q3 FY26 improved sequentially to 9.5% from 8.9% in the previous quarter, with 9M FY26 gross margin at 10%. Operational EBITDA for Q3 was INR105 crores, up from INR90 crores in Q3 FY25. However, the quarter's reported PBT and PAT were impacted by an exceptional charge📎 of INR30 crores related to legal fees for the Conti matter, which management confirmed is now resolved. Additionally, O&M margins temporarily dipped to 18% due to defect liability expenses on an Australian project, but are expected to return to the normal 20-25% range.
Debt Management and Working Capital Efficiency
Net debt decreased by INR4 crores quarter-on-quarter to INR738 crores, and the company continues to operate in a negative working capital cycle. Fresh funds totaling INR2,500 crores were raised this fiscal, including INR500 crores from IREDA and INR100 crores from an NBFC. These new borrowings led to an increase in interest costs for Q3, which are expected to be highest in Q4 FY26 before gradually coming down to an average of INR35-40 crores per quarter from Q1 FY27, as loans are repaid.
Growing O&M Business and BESS Opportunities
The Operations & Maintenance (O&M) business continues to be a steady and growing annuity stream, now managing a 10-gigawatt portfolio. This segment is expected to contribute meaningfully to revenue stability and margin resilience as more large projects transition from construction to operation. The company also highlighted significant opportunities in Battery Energy Storage Systems (BESS), having secured a 790-megawatt hour project from Serentica, and expects India's BESS capacity to grow substantially by FY27 to meet the demand for reliable round-the-clock power.