Detailed Narrative
Strong Order Book and Inflow Drive Future Visibility
Sterling & Wilson Renewable Energy Limited reported a robust FY26 with order inflows exceeding INR10,000 crores, a 43% year-on-year increase. This led to a record unexecuted order value (order book) of INR11,813 crores as of March 31, 2026, up from INR9,096 crores last fiscal, providing strong revenue visibility. Domestic orders comprised 78% of the current order book at INR9,250 crores, with turnkey projects accounting for nearly 70% of total orders.
Record Annual Turnover and Q4 PAT Despite Headwinds
The company achieved its highest annual turnover since listing, reaching INR7,548 crores in FY26, a 20% increase over FY25. Q4 FY26 also saw a record quarterly PAT of INR142 crores. However, Q4 revenue declined sequentially and year-on-year to INR1,946 crores, primarily due to commodity price volatility and deferred execution plans.
Impact of Exceptional Items on FY26 Profitability
Despite strong operational performance, the company reported an annual loss of INR296 crores for FY26. This was largely due to INR611 crores in exceptional items📎, primarily related to non-indemnified litigation matters. Management clarified that this specific amount has been paid and cannot be recovered from erstwhile promoters, though other indemnified claims are being pursued.
Growth in O&M and Strategic Focus on BESS
The Operations & Maintenance (O&M) segment showed significant growth, with the portfolio expanding to 13.5 gigawatts from 8.7 gigawatts in the last fiscal, making the company one of the largest third-party O&M players globally. The company is also strategically targeting the Battery Energy Storage Systems (BESS) market, expecting 20% of new orders to come from this segment, with a current BESS order book of INR300 crores.
Improved Financial Health and Credit Access
The company's debt levels declined by INR149 crores quarter-on-quarter, and net working capital improved to negative INR329 crores from negative INR407 crores. Sterling & Wilson also secured INR2,800 crores in fresh credit lines during FY26 and saw its bank rating upgraded by two notches from BBB- to BBB+, reflecting improved financial stability and strong banking support.
Outlook and Guidance for FY27
Management guided for a 15% revenue and order book growth rate for FY27, excluding potential Reliance projects. They anticipate EPC gross margins to be in the 8-10% range and O&M gross margins to stabilize around 20%. The bid pipeline remains robust at 31 gigawatts overall, with over 27 gigawatts in India, and the company maintains a solar market share of over 25%.
Challenges from Commodity Prices and Project Delays
The company faced challenges from rising commodity prices and geopolitical tensions, which muted Q4 order inflows. Additionally, project development in Rajasthan and Gujarat was delayed due to connectivity and GIB (Great Indian Bustard) issues, although GIB decisions have now been received, and substation commissioning is expected by 2028.