Sterling and Wilson Renewable Energy (SWSOLAR) Q2 24/25 earnings summary

Executive summary

• Achieved record unexecuted order book exceeding INR 10,500 crore as of October 2024, driven by strong domestic and international EPC inflows.

• Q2 FY25 revenue grew 36% year-on-year, with three consecutive quarters of positive EBITDA, PBT, and PAT.

• Major wins include India's largest BESS project (2x250 MW AC/1 GWh), a 20 MW floating solar project, and a 633 MW DC project.

• Credit rating upgraded to investment grade (BBB-) by Acuité in October 2024, unlocking new funding and supporting execution.

• Board approved unaudited standalone and consolidated results for the quarter and half year ended September 30, 2024.

Financial highlights

• Q2 FY25 consolidated revenue at INR 1,131 crore, up from INR 759 crore in Q2 FY24; standalone revenue at INR 995.97 crore.

• Gross margin at ~10% in Q2 FY25; O&M gross margin at 28%, expected to normalize to 25%.

• Q2 FY25 EBITDA at INR 51 crore (4.9%-5% margin); PAT at INR 9 crore, higher year-on-year and sequentially.

• Standalone net profit for Q2 FY25 was INR 75.02 crore; consolidated net profit was INR 8.57 crore.

• Net debt at INR 326 crore as of September 2024, up from INR 116 crore in March 2024, due to new IREDA loan.

Outlook and guidance

• Confident of meeting INR 8,000 crore revenue guidance for FY25, with INR 6,000 crore targeted for H2.

• Strong bid pipeline in India, with 23 GW of projects expected to be awarded in the next 6-12 months.

• FY26 expected to see 15%-20% CAGR growth, excluding potential large orders from Reliance and Nigeria.

• Management confident in recoverability of large receivables and investments, supported by indemnity agreements.

• No impairment considered necessary for investments in subsidiaries or large disputed receivables.