Summary
Sterling and Wilson Renewable Energy Limited - Q3 FY 2026 Earnings Call Summary Friday, January 16, 2026 10:00 A.M. IST
Event Participants
Executives 3 Ajit Pratap Singh (CFO), C.K. Thakur (Global CEO), Sandeep Thomas Mathew (Senior VP, Investor Relations)
Analysts 11 Amit Agicha, Aniket Madhwani, Anuj Jain, Bajrang Bafna, Bhavik Shah, Danesh Mistry, Kartik Sharma, Puneet, Rabindra Nath Nayak, Sagar Parekh, Sameer Dalal
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹2,092 crores | +48% YoY; highest ever third quarter top line since listing. |
| Order Inflow (9M FY26) | ₹6,929 crores | Strong momentum; management increased full-year inflow guidance to >₹11,000 crores. |
| Unexecuted Order Value | ₹10,413 crores | Up from ₹9,096 crores in March 2025; 75% domestic and 25% international mix. |
| Gross Margin | 9.5% | +60 bps QoQ; improved from 8.9% in Q2 due to better execution mix. |
| Operational EBITDA | ₹105 crores | +16.7% YoY; reflects operational leverage despite non-recurring overhead hits. |
| Net Debt | ₹738 crores | Stable; decreased by ₹4 crores QoQ. |
| Net Working Capital | (₹407 crores) | Improved from (₹279 crores) QoQ; company continues to operate in a negative cycle. |
| O&M Portfolio | 10.0 GW | Reached critical scale; expected to provide stable annuity income and margin resilience. |
Geographic & Segment Commentary
- Domestic EPC (India): Contributes 75% of the order book. Focus is shifting toward long-term framework agreements, such as the multi-year partnership with Adani Green Energy for 1GW+ annual deployments in Khavda.
- International EPC: Focus remains on South Africa (4 projects) and Europe (2 projects near completion). New strategy prioritizes profitable orders with favorable terms; USD-denominated contracts in South Africa mitigate forex risks.
- O&M Segment: Reported lower margins of 18% this quarter due to a one-off defect liability expense in Australia. Management expects a return to the 20-25% steady-state margin range as the portfolio grows past 10 GW.
Company-Specific & Strategic Commentary
- Strategic Framework Agreements: Signed a 5-year agreement with Adani Green Energy to deliver repeatable project scopes. This move shifts the business from episodic bidding to a predictable engagement model with ~10% gross margins.
- BESS Focus: Secured a 790 MWh battery storage project from Serentica, establishing credentials in a market estimated to need 34 GW capacity by FY27. The project excludes battery supply risk, focusing on high-margin integration.
- Conti Legal Matter: Recognized a final ₹30 crore non-recurring expense for legal fees. Management declared the matter closed, stating no further foreseeable material losses from this case impact the financials.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Order Inflow | >₹11,000 crores (FY26) | Increased from initial 15% growth target due to strong pipeline and advanced negotiations. |
| Revenue Growth | 15-20% (FY26) | Driven by domestic execution pace and improved non-fund based limit availability. |
| Gross Margin | 8-10% (Long-term) | Range maintained; variations depend on the mix of Turnkey vs. BOS (Balance of System) projects. |
| Dividend/Cash Flow | FY27 Recovery | Interest costs expected to peak in Q4 FY26 and decline in FY27 as IREDA/NBFC loans are repaid. |
Risks & Constraints
| Risk | Context |
|---|---|
| Module Price Volatility | Recent removal of Chinese export rebates may cause turbulence; mitigated by contracts where module risk stays with clients until NTP (Notice to Proceed). |
| PPA Delays | Approximately 40 GW of domestic capacity faces PPA signing delays; management expects resolution soon to meet government 500 GW targets. |
| Legal/Indemnity | While most legacy cases are covered by promoter indemnity, certain subcontractor disputes like Conti were not, leading to unexpected PBT hits. |
Q&A Highlights
Order Inflow & Pipeline
- Question: What gives confidence in hitting the ₹4,000 crore inflow target for Q4? (Bhavik Shah)
- Answer: The company is L1 in a large PSU project and in advanced stages with private IPPs and international clients (C.K. Thakur).
Adani Framework Agreement
- Question: Does the Adani framework lock in volumes and margins? (Puneet)
- Answer: It is a 5-year arrangement for ~1 GW+ annually at ~10% gross margins. It eliminates land and transmission risks (C.K. Thakur).
Financial Stability & Interest Costs
- Question: When will bottom-line figures stabilize? (Anuj Jain)
- Answer: Stability is expected from Q4 FY26 onwards as non-recurring legal expenses conclude and overheads are rationalized (Ajit Pratap Singh).
- Question: Why did interest costs rise? (Bajrang Bafna)
- Answer: Full-quarter impact of ₹500 crore IREDA loan and a new ₹100 crore NBFC loan (Ajit Pratap Singh).
Reliance Opportunity
- Question: When will the Reliance rollout begin? (Puneet)
- Answer: Infrastructure development is underway; expect more traction by the end of Q4 FY26 or Q1 FY27. These orders are over and above the current guidance (C.K. Thakur).
Key Takeaway
Sterling and Wilson Renewable Energy delivered a strong operational performance in Q3 FY26, marked by its highest ever third-quarter revenue of ₹2,092 crores and a 48% YoY growth in 9M revenue. The company successfully transitioned toward more stable, repeatable business models by signing a landmark 5-year framework agreement with Adani Green Energy. Despite operational EBITDA growth of 115% for the 9-month period, the bottom line was temporarily weighed down by a final ₹30 crore legal charge related to the Conti matter and one-off O&M expenses in Australia. Looking ahead, management has significantly raised order inflow guidance to over ₹11,000 crores for FY26, underpinned by a robust domestic pipeline and upcoming Reliance projects. With debt levels stable and legal uncertainties largely resolved, the company is positioned for margin expansion and normalized profitability starting in FY27.
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