SWSOLAR in Spotlight after Q1 FY26 Results with EPC Gains

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SWSOLAR benefits from parentage under Reliance Industries and a global footprint, including a 1,177 MW solar plant in Abu Dhabi

By S JHA

Mumbai, July 17, 2025 – Sterling and Wilson Renewable Energy Ltd. (SWSOLAR-IN), a leading global solar engineering, procurement, and construction (EPC) solutions provider, reported its Q1 FY26 results, showcasing significant year-on-year growth despite a sequential decline. Backed by Reliance Industries, SWSOLAR’s performance reflects its strengthening position in the renewable energy sector.

According to the company’s press release, SWSOLAR reported a consolidated total income of ₹1,761.49 crore for Q1 FY26, a 92.46% increase year-on-year (YoY) from ₹915.09 crore in Q1 FY25, though down 30.09% quarter-on-quarter (QoQ) from ₹2,519.11 crore in Q4 FY25. Profit before tax (PBT) surged to ₹75 crore from ₹15 crore YoY, while profit after tax (PAT) reached ₹39 crore, up from ₹5 crore in Q1 FY25, but lower than ₹55 crore in Q4 FY25 due to higher tax expenses. EBITDA stood at ₹86 crore, reflecting stable gross margins of 11%. The company highlighted a robust order book, providing visibility for the next 6-8 quarters, with H2 (Q3 and Q4) expected to drive the bulk of annual revenues due to seasonality in project execution.

The press release emphasized, “Our Q1 FY26 results reflect strong execution capabilities and a growing order pipeline, positioning us to capitalize on the global energy transition. With a nearly debt-free balance sheet and strategic backing from Reliance Industries, we are well-poised for sustained growth.” SWSOLAR’s financial health is further supported by improved debtor days, dropping from 105 to 72.6 days, indicating better cash flow management. However, working capital requirements have eased from 145 days, suggesting operational efficiency gains. The company’s operating cash flow (OCF) remains a concern, with a negative ₹144 crore in Q1 FY26, compared to ₹-48 crore in Q1 FY25.

Stock Performance and Technical Analysis

As of July 17, 2025, SWSOLAR’s stock closed at ₹327.65 on the NSE, down 1.35% for the day, with a trading volume of 14.08 lakh shares. The stock has experienced significant volatility, with a 52-week high of ₹758.45 and a low of ₹218.45, reflecting a 53.64% decline over the past year. Its market capitalization stands at ₹7,282.69 crore, classifying it as a mid-cap stock. The price-to-earnings (P/E) ratio is 89.41, indicating a premium valuation, while the price-to-book (P/B) ratio of 7.63 suggests the stock trades at 7.63 times its book value. Promoter holding is 45.7%, with Reliance New Energy Ltd. owning a 32.6% stake, signaling strong backing.

Technical analysis from TradingView indicates a recent breakout from a tight consolidation range between ₹307–311, supported by above-average volume (7.4M vs. an average of 3.11M). The stock is moving above its 20-day and 50-day exponential moving averages (EMAs), with the Relative Strength Index (RSI, 14-day) suggesting bullish momentum.

Analysts on TradingView note a potential target of ₹369.8 if the breakout sustains, with support levels at ₹285 and ₹190 and resistance at ₹541, ₹638, and ₹732.

However, a weekly chart shows a long-term bullish rounding bottom pattern, though volumes remain below average, indicating cautious optimism.

Industry Position and Risks

SWSOLAR, a key player in the solar EPC and operations & maintenance (O&M) market, benefits from its parentage under Reliance Industries and a global footprint, including a 1,177 MW solar plant in Abu Dhabi. The company’s focus on solar power projects aligns with global renewable energy demand, bolstered by its recent win of a 225 MW grid-connected solar PV project in Gujarat. However, risks include project execution delays, high valuation, and negative operating cash flow, which could impact liquidity, said IndMoney in a recent report.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Investors should conduct independent research or consult a financial advisor before making investment decisions.

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