Whalesbook
Record Turnover, Net Loss Driven by Litigation
Sterling and Wilson Renewable Energy Ltd achieved a record annual turnover of ₹7,548 crore in fiscal year 2026, marking a strong 20% increase compared to the prior year. Despite this revenue growth, the company reported a net loss of ₹296 crore for the fiscal year, significantly impacted by an exceptional ₹611 crore write-off related to past litigation.
FY26 Financial Highlights
The company announced its financial results for the full year ended March 31, 2026. Key achievements included the commissioning of 4.5 GW AC (5.9 GW DC) of solar projects during FY26. New orders secured amounted to over ₹10,062 crore, boosting the unexecuted order book to ₹11,813 crore. The Operations & Maintenance (O&M) portfolio also expanded significantly, growing to 13.5 GW from 8.7 GW in the previous year.
Key Financial Takeaways
The results present a mixed picture: strong operational momentum with record turnover and a growing order book, contrasted by a net loss driven by an exceptional item. This highlights the company's operational capacity while also showing the impact of past liabilities.
Significantly, the company noted that the financial impact of the litigation is "largely indemnified by promoters." This suggests that while the write-off impacts the current year's results, the ultimate financial burden may be substantially covered by its promoters, particularly Reliance.
Company Background
Reliance Industries, via Reliance New Energy, acquired a significant 49% stake in Sterling and Wilson Renewable Energy Ltd in late 2022 or early 2023. This strategic investment aimed to align the company with Reliance's broader renewable energy initiatives. Before this, the company had experienced periods of financial strain and margin challenges.
The recent ₹611 crore write-off and the resulting FY26 net loss are directly linked to past litigation, mainly in the US, which the company has now accounted for as an exceptional charge. The indemnity from promoters offers a layer of financial protection against the full impact of these past issues.
Outlook and Growth Prospects
Shareholders can see a company with a strong operational base, demonstrated by record turnover and a substantial order backlog, positioning it for future revenue growth. The company's guidance points toward continued expansion in FY27.
The promoter indemnity offers a key buffer against the financial impact of past litigation, helping to stabilize the balance sheet beyond the recorded write-off. Sterling and Wilson's growing Operations & Maintenance (O&M) business provides a recurring revenue stream, adding stability to its financial profile.
Identified Risks
The company is closely watching commodity inflation for key materials like copper, aluminum, and silver, as these can affect project costs and profitability.
Project progress in Nigeria is slow due to local elections, and significant advancement is unlikely this year. While largely indemnified, managing any residual exposure from past litigation remains a key consideration.
Competitive Landscape
Sterling and Wilson competes with players like Waaree Renewable Technologies, a fast-growing firm in solar EPC and module manufacturing. Larsen & Toubro's diversified EPC arm also targets large renewable projects, while Adani Green Energy, primarily a developer, possesses substantial in-house EPC capabilities and a large market share.
Investor Watchlist
Executing on the 15% revenue growth guidance for FY27 will be a key operational performance indicator. New order inflows in FY27, especially the target contribution of around 20% from Battery Energy Storage Systems (BESS), will be closely watched. Further clarity on stabilizing O&M gross margins around 20% and EPC gross margins between 8% to 10% is expected. Ongoing technical discussions with Reliance New Energy on potential collaborations and progress in third-party O&M services, which have projected 20-25% gross margins, are also points to monitor.