Sterling and Wilson Renewable Energy H1 FY27 Results

Profit After Tax (PAT) reached INR 70 crore for H1 FY27, compared to a loss of INR 439 crore in H1 FY26.
Revenue stood at INR 3,118 crore for the period, representing an 11% decline compared to the previous year.

Reader Takeaway: Turnaround to profitability and debt reduction are positive signs, though project execution delays remain a notable monitorable.

What just happened

Sterling and Wilson Renewable Energy (SWREL) transitioned to profitability in the first half of FY27, reporting a PAT of INR 70 crore. This follows a significant loss of INR 439 crore in the same period last year, which was heavily impacted by a one-time provision related to U.S. arbitration. While revenue declined to INR 3,118 crore due to the tapering of older projects and delays in the start of new ones, the company achieved strong operational performance in domestic EPC and O&M services.

Why this matters

The company’s ability to turn profitable despite a dip in top-line revenue highlights improved operational efficiency and a shift in project mix. The order book reached INR 12,481 crore, a 34% increase, which provides revenue visibility for the coming quarters. Furthermore, a reduction in gross borrowings by INR 244 crore to INR 920 crore strengthens the balance sheet, signaling better capital management.

The backstory

The company previously faced challenges with international project legacy issues. With those largely addressed, the focus has shifted toward higher-margin work and building its O&M portfolio, which now stands at 18.9 GW. Management remains confident in an H2 recovery, projecting that pending international projects will ramp up, contributing to their 10% annual revenue growth guidance.

Risks to watch

Project delays are the primary concern, as several new domestic and international projects are awaiting their 'Notice to Proceed' (NTP). Additionally, working capital has come under pressure, with receivable days rising from 138 to 176. Management is also exercising caution regarding aggressive pricing competition in the domestic solar and BESS sectors, opting to prioritize margins over volume.

What to track next

Investors should closely watch the conversion of the eight projects currently in the pipeline into active execution. Success here is crucial for meeting the FY27 revenue guidance. Additionally, the management's ability to manage its receivable days will be a key indicator of cash flow health in upcoming quarters.