Sterling & Wilson Renewable Energy reports consolidated loss of Rs 417.5 crore in Q4 of FY23

Sterling & Wilson Renewable Energy on Thursday reported a consolidated loss of Rs 417.5 crore for the fourth quarter ended March 31, 2023. The company has reported a net loss of Rs 126.3 crore in the corresponding quarter of the previous financial year.

The company’s revenue from operations also declined by 91.7 percent to Rs 88.4 crore in Q4FY23 against Rs 1,071 crore posted in Q4FY22. Sterling & Wilson Renewable Energy says that its revenue was impacted during the quarter due to cost increase on account of certain cost provisions made. These provisions have impacted the percentage-of-completion and led to a revenue reversal in ongoing EPC projects. For FY23, revenue has decreased by 59.5 percent YoY due to lower contribution from ongoing EPC projects.

The company says that the O&M constituted 8.9 percent of revenue in FY23. O&M margin remain impacted by projects where O&M costs were incurred, however, revenue recognition has not commenced due to delay in final handover.

The solar EPC solutions providing company Sterling & Wilson Renewable Energy has posted a EBITDA loss of Rs 352.1 crore against an EBITDA loss of Rs 124.2 crore posted last year. The company says that its gross margin remain suppressed primarily on account of International EPC project.

India: Major PSUs have indicated a potential pipeline of approx. 13 GW for FY24E in India

Middle-East: 3 large bids with each in excess of 1.5 GW each with a joint EPC partner

Australia: Limited notice to proceed “LNTP” received for 1 project

Africa: Limited notice to proceed “LNTP” received for 1 project in South Africa

US: Limited notice to proceed “LNTP” received for 1 project

Company aims to return to profitability and deleverage balance sheet in FY24.

Target Nigeria agreement closure by Q1/Q2-FY24E

Leverage existing strong order pipeline to target orders worth USD 1bn+ from domestic and international markets (ex-Nigeria)

Capture major share of Group companies’ domestic solar portfolio buildout

Expects to revert to 10-11 percent gross margins aided by nearly 90 percent of current UOV comprising new India orders. It also expect that it will achieve an EBITDA profitability by 2QFY24E.

On the debt part, the company has a target to achieve significant debt reduction by Q4FY24E aided by receivables recovery, indemnity inflows, and negative working capital.

Shares of Sterling & Wilson Renewable Energy closed 0.23 percent higher at Rs 306.30 per share on NSE today, April 20, 2023.