Sterling and Wilson Renewable Energy (SWSOLAR) Q4 19/20 earnings summary

Executive summary

• FY20 consolidated revenue fell 32.3% YoY to ₹5,575.3 crore; net profit declined to ₹304.3 crore from ₹638.2 crore, while gross margin improved to 12.8% from 11.9%.

• Unexecuted order value reached ₹11,395.9 crore, up 47.3% YoY; 27 projects totaling 1,528.18 MWp were commissioned across 9 countries.

• O&M expanded rapidly, with revenue up 96.1% to ₹183.5 crore and contracted portfolio up 35% to 7,467.97 MWp.

Financial highlights

• Consolidated operating revenue was ₹5,575.3 crore versus ₹8,240.4 crore in FY19; EPC provided 96.7% of FY20 revenue and O&M 3.3%.

• Operating EBITDA was ₹383.6 crore, with a 6.9% margin versus ₹688.2 crore and 8.3% in FY19; EBIT was ₹369.4 crore versus ₹680.4 crore.

• Net profit was ₹304.3 crore versus ₹638.2 crore; net margin was 5.5% versus 7.8%, and EPS was ₹19.3 versus ₹39.9.

• Gross margin improved to 12.8% from 11.9% on execution efficiencies and procurement cost control; other income included a ₹34.8 crore liability write-back for closed projects.

• Cash generated from operating activities was ₹337.7 crore versus negative ₹723.3 crore in FY19; working capital requirements remained consistent during FY20.

Outlook and guidance

• Management expected better turnover and profits in FY21, supported by the order book, geographic expansion and stronger presence in existing markets.

• Strategy prioritizes the US and Australia over the more competitive MENA region; expansion plans also target Europe, Mexico and South Korea.

• Growth priorities include expanding O&M, third-party O&M, floating solar and solar-plus-storage; O&M offers recurring revenue visibility and life-cycle gross margins of 35–40%.

• The long-term outlook was supported by solar demand; global annual PV additions were forecast to recover to 130 GW beyond 2021 and reach 143.2 GW by 2025.